Wall Street Narratives Distort Reality

A Deep Recession Is Rapidly Approaching Volatility remains the major feature of financial markets.  You are correct if you interpret the word “volatility” to include a downtrend in equity prices.  This is the kind of action one normally sees in a “Bear” market.  The table below shows the changes in the major U.S. indexes from […]

Increasing Market Volatility

Why It’s The Fed’s Fault Equity markets ended Q1/22 (Thursday, March 31) with the first quarterly loss in two years (since Q1/2020, i.e., when the pandemic began).  Of interest was the rush to sell in the last hour of trading, as if mutual funds and equity ETFs did not want to show too many equity […]

Employment Data –Turning a Sow’s Ear into a Silk Purse

Employment Data –Turning a Sow’s Ear into a Silk Purse The financial markets were stunned by the huge rise in net new jobs in both the Establishment (Payroll) Survey (+467K; consensus forecast +125K), a monthly survey of businesses, and the Household Survey (+1.2 million), a similar survey of individual households. This was especially surprising given […]

The Economy Has ‘Recovered’ – Anemic Growth To Follow

The September jobs report was filled with cross-currents, some showing possible economic weakness, some showing strength. This makes the Fed’s job exceedingly difficult. Is the economy strengthening or weakening? What’s the correct monetary policy prescription? “Taper” asset purchases? Raise interest rates? Since September payrolls were so ambiguous, perhaps October’s (which will be available to the Fed prior to its November meeting) […]

Why Interest Rates Are Falling

#*!? CRASH BAM @#$ Suddenly, markets (well, at least the bond market) now see falling interest rates in the short and intermediate term. The 10-Year U.S. T-Note fell from 1.47% on June 30 to close at 1.29% on Thursday July 7 (a big move in just four market sessions). Some of the rapid fall was due to […]

The Implications Of Softening Economic Data

After a week of heightened financial market volatility caused by the Fed’s “Dots,” (week ended June 19), the past week was like a walk in the park with much lower market volatility and the equity markets resuming an upward bias. What we have observed, however, is that much of the newly released data, including employment, housing, […]