Monthly Archives: August 2013

We’re Back at THE Line For Stocks

The stock market is on the line for the whole QE forever rally. This is an extremely dangerous situation. We are heading into a holiday weekend when any number of the current geopolitical situations could get very ugly. Moreover, it’s … Continue reading

Posted in Crisis | Comments Off on We’re Back at THE Line For Stocks

The Real Reason the Markets Are Moving Up Today

The market is rallying today on August performance gaming. The talking heads will claim this move has something to do with fundamentals, but the reality is that the move up yesterday and today consists of fund managers doing whatever they … Continue reading

Posted in Crisis | Comments Off on The Real Reason the Markets Are Moving Up Today

Without Fraud and Accounting Gimmicks, Earnings Are Falling…

Based simply on CAPE (cyclical adjusted price to earnings) the market is significantly overvalued with a reading of 23. However, even this measurement understates the true nature of the bubble because one of the biggest drivers of corporate earnings in … Continue reading

Posted in Crisis | Comments Off on Without Fraud and Accounting Gimmicks, Earnings Are Falling…

What’s Next For the Markets?

After this weekend, the summer session for the markets will be winding down. August historically is a listless time for the markets. In the US, Congress is closed so there are fewer major announcements regarding public policy. In Europe entire … Continue reading

Posted in Crisis | Comments Off on What’s Next For the Markets?

Two Ways Investors Can Beat the Market Long-Term

Our new value focused investing newsletter is officially live. Why did we create this newsletter? First and foremost, you need to know that few if any investors actually beat the market in the long-term. The reason for this is that … Continue reading

Posted in Crisis | Comments Off on Two Ways Investors Can Beat the Market Long-Term

Ignoring Reality Doesn’t Help Anyone… Least of All Our Portfolios

The latest policy being implemented by Governments around the world consists of simply making data points up when reality doesn’t conform to their wishes. The best example of this is China where the PMI measure erupted from the lowest level … Continue reading

Posted in Crisis | Comments Off on Ignoring Reality Doesn’t Help Anyone… Least of All Our Portfolios

The Fed Is Insolvent… Do You Still Think the Crisis is Over?

The single dominant belief for investors since 2008 has been that the world’s Central banks will not permit the markets to fall to pieces. There are primary two primary reasons for this: 1)   The Fed and other Central Banks managed … Continue reading

Posted in Crisis | Comments Off on The Fed Is Insolvent… Do You Still Think the Crisis is Over?

The One Line Bernanke is Praying Doesn’t Break

The QE party is ending. And the following hangover is going to be brutal. Since 2007 the Central Bankers of the world have operated under the belief that they can hold the financial system together by engaging in round after … Continue reading

Posted in Crisis | Comments Off on The One Line Bernanke is Praying Doesn’t Break

Asia’s Economic Engine is Breaking Down…

Asia has become the most important issue for the markets today. The Central Bankers’ dream of endless QE has become a nightmare for Japan while China’s “growth miracle” is rapidly falling to pieces. Let’s start with Japan. Japan launched its … Continue reading

Posted in Crisis | Comments Off on Asia’s Economic Engine is Breaking Down…

The Smart Money Is Leaving the Building

Japan continues to dominate the economic news. The latest move concerns Prime Minister Abe’s new economic policies to cut corporate taxes. He also announced plans to run a shakeup at Japan’s political ministries. This is “Plan B” for Abe who … Continue reading

Posted in Crisis | Comments Off on The Smart Money Is Leaving the Building

Bernanke Just Felt a Chill Down His Spine

In April 2013, Japan announced a QE program of $1.4 trillion, an amount equal to roughly 25% of the Japanese GDP. To put this into perspective, the US’s QE1, QE 2, QE 3, and QE 4 programs which were spaced … Continue reading

Posted in Crisis | Comments Off on Bernanke Just Felt a Chill Down His Spine

The EU Crisis Will Be Back Very Shortly

The financial media continues to talk about how Europe is saved. It’s odd that somehow everything is starting to look so much better now than Angela Merkel is up for re-election in Germany. Could it be coincidence that the worst … Continue reading

Posted in Crisis | Comments Off on The EU Crisis Will Be Back Very Shortly

The Fed Will Bankrupt the US Trying to “Create” Jobs

The primary myth being perpetuated by the Central Banks of the world is the belief that loose monetary policy and money printing will lead to economic growth. This is the reason why Central banks have cut interest rates more than … Continue reading

Posted in Crisis | Comments Off on The Fed Will Bankrupt the US Trying to “Create” Jobs

Japan Is Flashing a Warning For What is Coming Our Way

The markets fell yesterday despite the Fed pumping over $5 billion into the system. The primary reason is that the Fed is once again talking about tapering QE. There’s also the uncertainty of who the next Fed Chairman will be … Continue reading

Posted in Crisis | Comments Off on Japan Is Flashing a Warning For What is Coming Our Way

Is the Market Top In?

I keep hearing that whenever “stocks are rising” it’s a good thing. I completely disagree. If a market move is warranted by earnings and fundamentals, then yes, a sharp move higher is great. But if the market is rallying based … Continue reading

Posted in Crisis | Comments Off on Is the Market Top In?

If the Economy is Recovering… Why Is Nominal GDP in a Recession?

The financial world is abuzz with the unexpected jump higher in our manufacturing and non-ISM(s). The world seems to think these two jumps are the result of the US economy suddenly getting back on track. The whole thing smacks of … Continue reading

Posted in Crisis | Comments Off on If the Economy is Recovering… Why Is Nominal GDP in a Recession?

The Trader Games Are Ending

Traders shot for and managed to hit 1,700 on the S&P 500. At this point, there is no real reason for this other than trader games (start of the month buying). The rising wedge pattern we’ve been tracking is essentially … Continue reading

Posted in Crisis | Comments Off on The Trader Games Are Ending

The Great Central Bank Dream Crashes Into the Wall

The markets moved up sharply today, with the S&P 500 briefly touching 1,700. This is classic start of the month buying abetted by the ECB and Fed not doing anything, which in this environment of ongoing monetization is equated with … Continue reading

Posted in Crisis | Comments Off on The Great Central Bank Dream Crashes Into the Wall