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10yr Treasury Sept16

US 10-Year interest rates suggest Great Reckoning may be near

 ”History doesn’t repeat itself, but it often rhymes“, Mark Twain Bob Farrell of Merrill Lynch was rightly considered one of the leading Wall Street analysts in his day.  His 10 Rules are still an excellent guide for any investor.  Equally helpful is the simple checklist he developed, echoing Mark Twain’s insight, to help investors avoid […]

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6 impossible things not to believe about oil before breakfast

 ”Sometimes I’ve believed as many as six impossible things before breakfast.” Oil traders know how the Queen felt in Lewis Carroll’s famous book, Alice Through the Looking-Glass.  The list of impossible things that they are being asked to believe grows almost by the day:   Last week, prices jumped 4% on the basis that strong […]

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Stocks Sept16

Investors panic in “search for yield” as interest rates go negative

Its been a great few months for financial markets.  All the major markets have seen gains, as the chart shows – something that has happened only once before, since my half-yearly reviews began in March 2009: □   Long-term US Treasury bonds have gained, as long-term interest rates have been falling □   The 30-year bond […]

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Pensions crisis finally becomes a mainstream issue

It has been 5 years since we first warned of a looming pensions crisis in Boom, Gloom and the New Normal.  Now, finally, it is becoming a mainstream issue.  The latest round of central bank stimulus policies has clearly been the proverbial “straw that breaks the camel’s back” for anyone connected with pension funding. The […]

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Suspense rises as Great Unwinding becomes the Great Reckoning

“There is a distinct difference between “suspense” and “surprise.”  Alfred Hitchcock It is now 2 years since the start of the Great Unwinding of policymaker stimulus.  On 15 August 2014, Brent was at $105/bbl, and the US$ Index was at 81. Since then, as the chart shows, Brent oil prices have fallen 53%, whilst the […]

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US jobs Aug16a

US pensioners pay the price for Fed’s monetary policy failure

There was one bit of good news this week.  For the first time since the financial crisis began, a Governor of the US Federal Reserve acknowledged that today’s demographic changes are having a major impact on the US economy. John Williams, of the San Francisco Fed, argued that: “Shifting demographics….(mean that) interest rates are going […]

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Boom/Gloom Index suggests volatile August may lie ahead

It may be an idea to keep your smartphone charged and within reach, if you are planning a trip to the beach this month.  Certainly market behaviour since June has been more and more skittish.  The experts, after all, were telling us that central banks were certain to do more major stimulus efforts to boost […]

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GU 9Jul16

Europe’s oil product glut halves gasoline margins in 2 weeks

We are approaching the 2nd anniversary of the Great Unwinding of policymaker stimulus, which began in August 2014: The initial movement was very sharp, with Brent falling 53% by January and the US$ rising 23% by March Oil then saw an initial correction – with Brent recovering to being 37% down by May during the “oil […]

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Ring of fire Feb15

Brexit a disaster for the UK, Europe and the world

First, the good news.  It has long been recognised that the UK economy is over-dependent on financial services, and that its housing market – particularly in London – is wildly over-priced in relation to earnings.  The Brexit vote should ensure that both these problems are solved: Many banks and financial institutions are already planning to […]

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Investors fear Fed’s outdated theories have hit sell-by date

These are difficult times for companies and investors.  It is becoming more and more apparent that central bank stimulus policies have failed to counter today’s demand deficit, caused by ageing populations.  It is also clear that central bankers themselves have little idea of what is happening in the real economy. They have based their programmes […]

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