Tag Archives: On Economy

  Financialization Genius BALTIMORE – When we left you last time, we were in the middle of describing the crooked hind leg of crony capitalism. We used billionaire businessman Wilbur Ross – Donald Trump’s pick for the Department of Commerce – for illustration purposes. Not that there is anything wrong with Mr. Ross. He plays the game, just as everyone else does. He’s particularly good at it. But today, we’ll look at...

A Quick Chart Overview Below is an overview of charts we picked to illustrate the current market situation. The selection is a bit random, but not entirely so. The first set of charts concerns positioning and sentiment. As one would expect, these look fairly stretched at the moment, but there are always ways in which they could become even more stretched. First a look at the NAAIM exposure index: NAAIM Exposure Index,...

A Market Gripped by Fear The Indian Prime Minister announced on 8th November 2016 that Rs 500 and Rs 1,000 banknotes would no longer be legal tender. Linked are Part-I, Part-II and Part-III updates on the rapidly encroaching police state. The economic and social mess that Modi has created is unprecedented. It will go down in history as an epitome of naivety and arrogance due to Modi’s self-centered desire to increase...

Bad Monday Some Monday mornings are better than others.  Others are worse than some.  For one Amazon employee, this past Monday morning was particularly bad. No doubt, the poor fellow would have been better off he’d called in sick to work.  Such a simple decision would have saved him from extreme agony.  But, unfortunately, he showed up at Amazon’s Seattle headquarters and put on a public and painful display of...

Hidden Motives It is well-known that India’s government wants to coerce its population into “modernizing” its financial behavior and abandoning its traditions. The recent ban on large-denomination banknotes was not only meant to fight corruption. In fact, as our friend Jayant Bhandari has pointed out, fresh avenues for corruption  immediately opened up upon enactment of the ban (see “Gold Price Skyrockets in India...

When Money Dies In part-I of the dispatch we talked about what happened during the first two days after Indian Prime Minister, Narendra Modi banned Rs 500 and Rs 1000 banknotes, comprising of 88% of the monetary value of cash in circulation. In part-II, we talked about the scenes, chaos, desperation, and massive loss of productive capacity that this ban had led to over the next few days. Indian prime minister...

Taking Off Like a Rocket There are actually two problems with corporate debt. One is that there is too much of it… the other is that a lot of it appears to be going sour. As a brief report at Marketwatch last week (widely ignored as far as we are aware) informs us: “Businesses racked up debt in the January-to-March period at the fastest pace in three quarters, according to data released Thursday. Business debt grew at...

  Confidence Gets a Boost Payrolls figures are rising. Stocks rose to new records. As we laid out recently, a better jobs picture should lead the Fed to raise rates. This should cause canny investors to dump stocks. Canny investors at work (an old, but good one…) Cartoon via Pension Pulse - Click to enlarge But the stock market paid no attention. It follows logic of its own. Headlines told us that last...

The Trump Trade After 35 years of waiting… so many false signals… so often deceived… so often disappointed… bond bears gathered on rooftops as though awaiting the Second Coming. Many times, investors have said to themselves, “This is it! This is the end of the Great Bull Market in Bonds!” And then, at the appointed hour, expecting the rapture… they took the leap of faith only to come crashing down on the rocks below....

  A Strong First Half of the Year, Followed by Another Retreat In early 2016 gold had a big bull run. The precious metal rose close to 25% this year, pushed higher in a summer rally that peaked on July 10th. Gold experienced a bumpy ride over the remainder of the summer though, as investors became increasingly concerned about a potential rate hike by the Federal Reserve. Uncertainty returned to gold market and has...