Wednesday , February 19 2020
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Tag Archives: Bond

Kass: Bull Market Complacency Is Back

The Bull Market in complacency has reappeared as the markets (again) disassociate from the real economy. An earnings recession appears increasingly likely (Always) listen to Warren Buffett “I didn’t come this far to only come this far, so we’ve still got further to go.”- Tom Brady “You sure that’s the question you want to ask?”- Bill Belichick Like the dynastic rule of the New England Patriots football team, Mr. Market continued its assault higher yesterday – making it six weeks of...

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Kass: The Death Of Supply-Side Economics

It Now Appears the Trump Tax Cut Is Having Little Impact on Business Fixed Investment and on Domestic GDP The Tax Cut Has Had A Negative Impact on the U.S. Deficit and on Our National Debt The Likely Failure of Supply-Side Economics Will Likely Weigh on 2019-20 Economic and Profit Growth and on the 2020 Elections “The Trump administration’s $1.5 trillion cut tax package appeared to have no major impact on businesses’ capital investment or hiring plans, according to a survey released a year...

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Kass – You Should Listen Closely To The “Oracle Of Boston”

“Civilization is hideously fragile . . . there’s not much between us and the horrors underneath, just about a coat of varnish.” – Charles Percy Snow, British Novelist and Chemist “All models are wrong, but some are useful.” – George E.P. Box, British Statistician “To be absolutely certain about something, one must know everything or nothing about it.” -Henry Kissinger, Former U.S. Secretary of State “But who shall dare to measure loss and gain in this wise? Defeat may be victory in disguise;...

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Kass – Market Continues To Underprice Risk

“The world’s economy is growing more slowly than expected and risks are rising.” – – Christine Lagarde, IMF Managing Director The recent market rally, which I had expected, has not surprisingly overshot many observers’ upside expectations. A possible explanation for the market’s extreme moves in the last two months or so is likely market structure in which the dominant force in the market (passive investors) worship at the altar of price momentum and are increasingly agnostic to balance...

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Kass: Follow The Money

The Tremor Before the Quake and the Fed’s $450 Billion Balance Sheet Reduction “The combination of rate hikes and balance sheet reductions from the Federal Reserve in 2018 sucked up global U.S. dollar liquidity and put emerging markets under immense pressure in 2018. Emerging market equities were 20-30% lower from February through October, then the S&P played catch-up to the downside. This, combined with tariffs from the White House, has placed global manufacturing in a significant...

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Kass: 10-Surprises Which Could Spike The Market 5% In One Day

“Look up and not down; look out and not in; look forward and not back, and lend a hand.” – Edward Everett Hale Make no mistake about it, the stock market panic and Bear Market of November-December 2018 is serious and profoundly threatens the economic and profit pictures. As mentioned on Friday, a fragile domestic economy may be undermined by the negative wealth effect of lower equity prices: “The wealth effect is a theory suggesting that when the value of equity portfolios are on the rise...

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Kass: Nowhere To Run, Nowhere To Hide?

“Nowhere to run, baby, nowhere to hideGot nowhere to run to, baby, nowhere to hideIt’s not love I’m running fromIt’s the heartbreak I know will comeCause I know you’re no good for meBut you’ve become a part of meEverywhere I go, your face I seeEvery step I take you take with me…” – Martha Reeves and the Vandellas, Nowhere to Run For the past year I have concluded that the market was vulnerable to a number of factors and was likely making an important top and likely setting up for a Bear...

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Kass: Top 10 Reasons Why We May Be Entering A Bear Market

“It’s okay to be wrong; it’s unforgivable to stay wrong.” – Marty Zweig, (October 16, 1987 Wall Street Week – at six minute and 40 second mark!) As observed on Wall Street Week 31 years ago by Lou Rukeyser, the Dow Jones Industrial Average “crashed” by more than 230 points in the week ending October 16, 1987 – knocking out all previous records. In the aforementioned video (above) Lou cited a tumbling in Treasury bonds, jitters in the Persian Gulf, an discouraging political situation, scary...

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Kass: China’s “Trump & Dump” or “He Said, Xi Said”

“I will eat my hat if this means anything substantive”… as “neither side is fully ready for war, but neither side will budge.” – Michael Every, Rabobank’s Head of Asia financial markets Xi is the “Wolf of Wall Street” The weekend agreement may backfire We may have three months of uncertainty that freezes business decision making – U.S. economic growth may slow and not reaccelerate An explosive market advance based on this weekend’s U.S./China trade news may provide one of the best shorting...

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Kass: The Is Nothing Like Price To Change Sentiment

“Tops are a process, bottoms are an event.” – Wall Street adage It is remarkable to me how, as Divine Ms. M puts it, “There is nothing like price to change sentiment.” Some of the same people in the business media who were Bearish last Thursday (well, even Tuesday), are now Bullish based on a Federal Reserve who said (and always has been) data dependent. It is amazing to me how so many investors mark-to-market their market views on an increasingly short term basis. However, to this analyst, a...

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