Posts Tagged ‘Federal Reserve’
Policy Driven Markets are Treacherous
Volatility in the stock market is rising, intraday swings more violent, and high-to-low ranges increasing. The lurching action of the market is not driven by fundamentals, it’s difficult to profit from, and disconcerting. There isn’t a single item to pinpoint with respect to market angst, rather, a combination of factors, leading to manic sentiment changes.…
Read MoreISM sinks to post-2009 lows; Industrial Economy Recession a Catch 22 for Fed
November ISM sank to the lowest level since 2009. Stunning, that the ISM (Institute for Supply Chain Management) survey, formerly known as NAPM (National Association of Purchasing Managers), printed 48.6, the lowest level since the throes of the financial crisis. For perspective, the last time the ISM printed sub-48, in June 2009, the S&P was 900. Today,…
Read MoreFirst the Japanese Yen and then Gold – There is No Safe Haven Currency Panacea
Beware of the one-way, one-speed runaway train! Usually in the normal chain of events the train stops, lets the passengers off, turns around, and starts going the other way. In a rare circumstance, all hell breaks loose and the train can’t be turned around and runs off the track and over the cliff. In the…
Read MoreThe Economic Process of Deleveraging Part Two – Why the US is Well Positioned
The differences between the US situation post-financial crisis and Japan in 1990 are stark. The previous post outlined how extreme things got in Japan and how ahead of itself the Japanese stock market, real estate market and economy got. While Japan was exposed to “extreme extremes” the US economy experienced imbalances that could be worked…
Read MoreOperation Twist – What the Fed May Announce Today and the Implications
The Federal Reserve is likely to announce additional easing measures at the conclusion of the two-day Fed meeting today. Additional easing is anticipated by the market but there are a number of uncertainties related to the scope of what the Fed will implement. The most focused on initiative is called “Operation Twist” which is jargon…
Read MoreFlow of Funds Household Net Worth – US Making Progress
On Friday, the Federal Reserve Board released the quarterly Flow of Funds data which measure the US household sector’s assets, liabilities, and net worth. The data are released with a lag as we just received Q2 measurements, two and a half months after the calendar quarter came to a close. While the level of net…
Read MoreCharles Evans Dual Mandate Responsibilities Speech – Goes Too Far
Yesterday, Charles Evans who is the ninth president of the Federal Reserve Bank of Chicago and a voting member on the FOMC, gave a speech at the European Economics and Financial Center in London. This speech goes too far with starting to push the Fed towards more stimulus as the returns from additional stimulus diminish.…
Read MoreIs yesterday’s 5% rally sustainable?
Why was the market up 5% yesterday after the Fed meeting? At first the market sold off 2%. Subsequently, the market came back to unchanged and rallied another 5%. Whoa. Our “green light” to buy worked out, if just for a day. Of course what everyone cares about is what to do going forward. We…
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