As we have learned repeatedly, the Fed will take extensive emergency measures if it perceives liquidity problems. Even above their congressional mandated objective of managing employment and prices, the Fed's top priority is preserving the banks.
If Trump is successful in ending — or at least significantly changing — the current global economic structure, the economy and geopolitics will change dramatically. Initially, this will be highly challenging from an investment perspective.
Like a crossword puzzle, President Trump has been bombarding the media with clues about his economic policy. Given the importance of inflation and interest rates to the economy and the financial markets, it's worth assessing his clues and formulating some answers about what Trump may be up to.
This article explores the GDPNow and Nowcast models to understand the recent forecast divergences. A better understanding of the two models helps us appreciate the current state of the economy and, therefore, better estimate the first quarter GDP.
This article highlights several SimpleVisor tools we use to track sector and factor rotations. These models help us better forecast tomorrow’s possible rotations and try to stay a step ahead of the market.
Digital tokenization of assets, made possible by the crypto-blockchain construct, can boost efficiency in the capital markets, thus greasing the wheels that drive the economy.
On February 19, 2025, the Fed made a confounding statement about QT, aka balance sheet reduction. Per its latest FOMC minutes: “several participants suggest halting or slowing balance sheet reduction pending debt ceiling resolution.” Might the Fed be offering investors a liquidity warning cloaked as a reaction to a fiscal crisis?
By acknowledging that we are not always rational and are subject to cognitive biases, we can better understand market anomalies and develop strategies to mitigate – and even take advantage of – their impact.
Despite what many of my critics think, I am agnostic about cryptocurrency. However, I am willing to shed light on details that most crypto supporters refuse to discuss or even acknowledge.
This article introduces GARP – growth at a reasonable price. As we will detail, by introducing earnings growth expectations into traditional valuation equations, some value stocks may not be quite the gems investors think. Likewise, some growth stocks may be value stocks.
Meme coins are just the tip of the iceberg representing unproductive uses of capital. I could write volumes on other examples. But given its current popularity, I use it to help spread the productivity gospel once again.
Let's discuss the recent strong correlation between the appreciating dollar and rising yields, and the reasons for the relationship.
Technical analysis is one of many tools we use to manage clients' wealth. While inconsistent, as with every forecasting model, it is the best means for quantifying investors' collective behaviors. Simply put, historical price and volume data provide a critical context for price levels likely to motivate buyers and sellers.
The question asked of me most often recently: "Why are bond yields rising?" After verbally answering it plenty of times, it's time to put my answer in writing for everyone else to see.
Has the U.S. economy diverged from the global economy, or are a lot of economic canaries in coalmines keeling over and warning the U.S. is soon to catch down?
While bitcoin may continue higher, proving MicroStrategy's CEO Michael Saylor a genius, investors should at least appreciate what may happen if things do not go according to plan. We now present the other side of the story.
Might another market liquidity event be on the horizon? While there is generally good liquidity in the financial system, there are some nascent signs that problems could arise.
The headlines regarding Trump's proposed tariffs and their inflationary consequences are undoubtedly worrying, but will they prove correct?
The MACD is one of my favored technical indicators to help forecast prices and manage risk. Accordingly, let's learn more about the MACD to see how it detects trends and potential trend changes, and assesses momentum.
In addition to better appreciating why gold is surging, our analysis will help you recognize that market narratives explaining asset price movements can be wrong, no matter how reasonable they may seem at first blush.
Legendary investors Paul Tudor Jones and Stan Druckenmiller are short bonds. You might want to carefully consider the data before you follow their lead.
Memory inflation of past events amplifies one's emotions and behaviors. As I will discuss, I believe that distress from recent price inflation is causing many investors to overly fear that a similar situation will reoccur.
We take this opportunity to help you better understand implied volatility. Furthermore, we discuss other lesser-followed measures of implied volatility that help better assess whether implied VIX readings infer bullish or bearish sentiment.
Agency REITs are not for buy-and-hold investors. They tend to perform well in specific economic and interest rate environments and poorly in others. I believe the current bullish steepening shift in the yield curve could offer investors opportunities with the agency REIT sector.
A crystal ball enlightening a trader about the rate cut headlines would have been costly. However, a trader with the crystal ball and proper context may have been more successful.
Despite double-digit dividend yields in many cases and the cushion such high dividends provide, buying agency REITs is not a guaranteed home run in a bull steepener.
Not surprisingly, Donald Trump and Kamala Harris are floating opposite approaches to modifying the corporate tax code. If enacted, both proposals would significantly impact corporate profits and, thus, share prices. Currently, the plans are only campaign promises
I have looked at market data on inflation expectations, Fed Funds futures, and other factors that influence interest rates. Today, I add an unorthodox factor to the list: cash cows.
Part one of this series described the burgeoning bull steepening yield curve environment and what it implies about economic growth and Fed policy. It also discussed the three other predominant types of yield curve shifts and what they suggest for the economy and Fed policy.
The level of U.S. Treasury yields and the changing shape of the Treasury yield curve provide investors with critical feedback regarding the market’s expectations for economic growth, inflation, and monetary policy
Profitable bond trading opportunities arise when your expectations about Fed policy differ from those of the market. Therefore, with the Fed seemingly embarking on a series of interest rate cuts, it behooves us to appreciate how many interest rate cuts the Fed Funds futures market expects and over what period.
A recent article co-authored by Stephen Miran and Dr. Nouriel Roubini, aka Dr. Doom, accuses the U.S. Treasury Department of using its debt-issuance powers to manipulate financial conditions.
One of the most critical factors explaining the performance differences between small-cap value and large-cap growth stocks is the sector in which the companies operate, and the earnings growth associated with each industry.
In my opinion, the primary reason that yields are too high is a pronounced fear from the Fed and bond investors of another round of inflation. The Fed runs an extraordinarily tight monetary policy to ensure it doesn’t reoccur.
Fed speakers will deny any notion that its monetary policy aims in part to help the government fund her debts. Regardless of what they say, we are already in an age of fiscal dominance. Monetary policy must consider the nation’s debt situation.
Notwithstanding whether there was a formal agreement, the petrodollar is not going anywhere. Even if Saudi Arabia accepts rubles, yuan, pesos, or gold for its oil, it will need to convert those currencies into dollars in almost all instances.
Despite the Fed’s “significant progress” in lowering inflation, most citizens are outraged and confused by economists’ relatively rosy inflation observations. Most citizens believe inflation is still rampant.
A well-thought-out long-game thesis can stay intact for long periods with slight adjustments when needed. Like a long and straight drive in golf, when your macroeconomic thesis proves correct, a good portion of your investing job is done.
This third and final part of this series focuses on alternative energy sources, utility companies, and other companies related to the power grid infrastructure.
Part Two focuses on the traditional energy suppliers that will fuel the power grid. The industries and companies are not presented in any particular order.
AI and EVs can potentially increase the nation’s productivity growth, which would go a long way toward boosting economic growth. However, with the potential benefits come significant investments. Some companies have already made massive investments in those industries. Others, like those involving the power grid, are just getting started.
Since the pandemic-related fiscal stimulus, the outstanding Federal debt has risen appreciably. In nominal dollar terms, the recent debt surge is mindboggling. However, the increase is on par with the government’s negligence over the last fifty years.
On the heels of Apple’s latest earnings report, the Wall Street Journal published an article titled “Apple is Buffett’s Best Investment,” which discusses how Apple became an oversized investment of Warren Buffett’s company, Berkshire Hathaway.
In an op-ed for the Washington Post on November 5, 2010, Ben Bernanke did a victory lap, praising the Fed’s efforts in stemming the financial crisis. In the article, he discusses how QE and other Fed policies eased financial conditions, bolstering investor confidence.
In my recent piece, “Japan's Lost Decades,” I examined why Japan's GDP is smaller than it was in 1995 and why it took 35 years for its stock market to set its recent record high.
Given that many people consider gold prices to be a macro barometer, reflecting trends in the economy, inflation, currency, and geopolitics, let’s identify the driving force behind the recent surge in the price of gold.
Continuing down our path will lead to Japan circa 1989.
Easy financial conditions and tight borrowing conditions make monetary policy difficult for the Fed to balance.
Rumors are floating that a new variation of QE will help bridge the Treasury’s liquidity shortfalls.
