Why Helicopter Money and Unconventional Monetary Policies Won’t Help the Economy
The equity markets continue to flirt with record highs while the yields on fixed income instruments are at or near all-time historic lows. Generally, those two market movements are not compatible. Everyone feels a high level of anxiety about the economic future. Ben Bernanke visited the Bank of Japan in early July to help them […]
Quarterly Economic Outlook: Q3/2016
The “Brexit” caused market swoon on Wall Street turned out to be a nasty 5.3% two day dive (S&P 500) that was all but reversed in the next 4 trading sessions. The reason was clear early on – despite forecasts of immediate worldwide economic doom and gloom, the non-binding referendum was mostly a political statement […]
When policies are anti-growth, sell the rallies and buy the dips
The equity markets are generally forward-looking. That’s why you have price movements that seem incompatible with the latest economic (backward-looking) data. The equity market today, as seen through the eyes of the S&P 500, has been flirting with all-time highs while the economic data indicate that the economy continues on feeble legs. So, just as […]
Investing in a slow-growth world
The first quarter provided quite a ride, featuring a rapid equity downdraft and chaos in the high-yield bond market accompanied by irrational fear about another implosion in the financial system and a resulting recession. All of this was brought on by the rapid fall in the price of oil, something that ordinarily would be a […]
Assessing the market now that recession fears have disappeared
With recession fears now nowhere to be found, the market averages have raced their way back to a positive return for the year, a much-welcomed development considering where they were on Feb. 11. The bears have retired to their caves, and the negativism in the media has all but disappeared. The rising price of oil […]
The imagined recession disappears
And POOF, just like that, the imagined recession disappeared! The equity market rallied from its Feb. 11 low (S&P 500 1829.08, down 10.5 percent for the year) to 1893.40 (March 3) and rising as I write. Amazingly, the markets are now only down about 2.0 percent for the year. This bounce is a relief. And […]