After 12 years of a liquidity-fueled, Fed-induced bull market, are the markets set to start another “secular” bear market? In an interview with the Financial Times, Boaz Weinstein, founder of Saba Capital Management, suggested such. “There isn’t a rainbow at the end of all this. There’s no reason that this difficult economic period will only […]
The Fed’s next crisis is already brewing. Unlike 2008, where “subprime mortgages” froze counter-party trading in the credit markets as Lehman Brothers failed, in 2022, it might just be the $27 Trillion Treasury market. When historians review 2022, many will remember it as a year when nothing worked. Such is far different than what people […]
“The ‘Buffett Indicator’ says the stock market will crash.“ Such was an email I received recently, and it warranted a more detailed discussion. Let me begin with my favorite line from “The Princess Bride.” “I do not think it means what you think it means.” The Buffett Indicator is a valuation measure that compares the […]
Asset bubbles have been prevalent throughout history. Whether it was the “Tulip bubble” in the 1600s, the South Sea bubble of the 1700s, or the Dot.com bubble of 2000, they were all a result of excessive investor speculation. Of course, the other side of the inflation was the long unwinding of those bubbles as valuations […]
MMT Policy (Modern Monetary Theory), the grand experiment, was tried following the pandemic-driven shutdown of the economy. It failed miserably. However, before we get to its failure, we need to review the policy to understand why it failed to work as anticipated. According to Investopedia: The central idea of MMT is that governments with a fiat […]
The “Fear Of Missing Out,” or “F.O.M.O.” is a centuries-old behavioral trait that began to get studied in 1996 by marketing strategist Dr. Dan Herman. “Fear of missing out (FOMO) is the feeling of apprehension that one is either not in the know or missing out on information, events, experiences, or life decisions that could make […]
Investor sentiment has become so bearish that it’s bullish. One of the hardest things to do is go “against” the prevailing bias regarding investing. Such is known as contrarian investing. One of the most famous contrarian investors is Howard Marks, who once stated: “Resisting – and thereby achieving success as a contrarian – isn’t easy. Things combine […]
Bailouts are the root cause of the dysfunction of capitalism and the demise of free markets. Over the last decade, the rise of wealth inequality and the failure of markets to function in a “fair manner” is apparent. We can directly attribute it to the influence of Central Banks and Governments. We talk much about […]
The surge in bond yields suggests that we are nearing the ideal entry point to buy longer-duration bonds for capital appreciation and portfolio protection. Such isn’t the first time we have made this call. In December 2018, we wrote why Jeff Gundlach was likely incorrect about bond yields topping 6%. Here is the conclusion to […]