Thursday , August 22 2019
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Tag Archives: FED

5-Things Your Broker Wont Tell You – Part 2

Valuations Matter. As I mentioned briefly in Part 1 of the series,  investors about to the enter the retirement distribution phase of their lives or seeking to extract money from a basket of variable assets like stocks and bonds to re-create a retirement paycheck, must be keenly aware of portfolio risk and prepare for a cycle of muted portfolio returns. Newbies to the retirement experience and those who aspire to retire within the next 3-5 years must seriously consider comprehensive financial...

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The Perversion Of The Yield Curve Inversion

We should be on vacation but it never fails that volatility spikes as soon as we leave our desk.   It must be the Ides Of August. Wait, it is.  Et tu Brutal! Nevertheless, we can’t help ourselves and have to throw in our two cents on the yield curve noise whipping around the market today. I had a conversation with a friend this afternoon that went something like this: Friend:   What is the yield curve telling us?  Me:  The Patriots and the Rams are going back to the Super Bowl for a...

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UNLOCKED RIA PRO: S&P 500 Plunges On Yield Curve Inversion

We have unlocked yesterday’s report that went out to our RIA PRO subscribers following the crash. You can subscribe at RIAPRO.NET and get 30-DAYS FREE to gain access to our portfolio models, analysis, and research. Yesterday, the financial media burst into flames as the yield on the 10-year Treasury fell below that of the 2-Year Treasury. In other words, the yield curve became negative, or “inverted.” “Stocks plunged on Wednesday, giving back Tuesday’s solid gains, after the U.S. bond...

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5-Things Your Broker Will Ignore – Part 1

Investors mistakenly believe their financial partners are students of holistic financial planning. Outside of sell-side biased market information pumped out daily by an employer’s research department, there are several areas of study that many brokers would prefer to avoid. Worse are the practitioners who confidently communicate erroneous Medicare and Social Security advice which results in consumers leaving thousands of lifetime income dollars on the table. Then, there are the brokers who...

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The Fed Continues To Make Policy Mistakes

“During the last year, the Federal Reserve has hinted that the period of ‘ultra-accommodative monetary policy’ was coming to an end. The Fed started that process last October by terminating the latest ‘Quantitative Easing’ program, which induced massive amounts of liquidity into the financial markets. Subsequently, the Fed has turned its focus towards the near ZERO level of the ‘Fed Funds’ rate.” – July 6, 2015 It seems like an eternity ago now, but I warned then the Fed was too late in the...

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The Prospects of a Weaker Dollar Policy

“Let me be clear, what I said was, it’s not the beginning of a long series of rate cuts.”- Fed Chairman Jerome Powell -7/31/2019 “What the Market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle which would keep pace with China, The European Union and other countries around the world….” – President Donald Trump – Twitter 7/31/2019 With the July 31, 2019, Fed meeting in the books, President Trump is up...

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A Short Stay At The Bear Trap Inn

As we suspected in last night’s post, A break of today’s low at 2945.23 cinches a beeline move to the 50-day, where algos will likely set their bear trap and try and bounce the market.  We expect a feeble bounce at best, which should be spanked. — GMM, August 1st Right on schedule, the 50-day breaks this morning, human emotions run amok, shorts pile in, and the Bear Trap Inn Algo comes in and puts the big hurt on short selling day traders.   If you have been watching the markets over...

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Strongest Economy Ever? I Warned You About Negative Revisions

Over the last 18-months, there has been a continual drone of political punditry touting the success of “Trumponomics” as measured by various economic data points. Even the President himself has several times taken the opportunity to tweet about the “strongest economy ever.” But if it is the “strongest economy ever,” then why the need for aggressive rate cuts which are “emergency measures” to be utilized to offset recessionary conditions? What the Market wanted to hear from Jay Powell and...

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Why Did Stocks Fall After Rate Cut?

Gravity.  Stock prices are waaay too high. Stocks went down not because the Fed messed up.  If they needed to cut 50 bps and signal more to come because of coming economic weakness, what in heavens name were stocks doing at record highs and extreme valuations?   Nobody knows the future. Expecting the Fed to see all, know all and precisely fine-tune the economy and markets is tantamount to having someone thread a needle with boxing gloves on and blindfolded during a rollercoaster ride. ...

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The Fed’s Massive Debt for Equity Swap

“All assets are priced where they are today because of central banks. That’s modern finance — it’s not about psychology or flows anymore, it’s about what the central banks are going to do next.” – Mark Spitznagel Cause and Effect Rene Descartes, a 17th-century mathematician, asked the fundamental question of how causal power functions. He was interested in how things relate to each other in terms of causality and how the thought of an action gets translated into a physical action. The...

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