Dodd/Frank Bill’s unintended consequences – liquidity mispricing
Market volatility has increased since the Federal Reserve ended quantitative easing, but the unintended consequences of the Dodd/Frank bill have heightened the risk in the bond market. Many people have forgotten that the 2008 financial crisis started in the bond market, not the stock market. Most of us have heard of certain financial firms referred […]
It all depends on the price you pay!
Over the course of the next two days, the financial news stories will be replete with opinions about whether the Federal Reserve (“Fed”) will raise rates tomorrow. Its decision will have implications for the markets – especially if it increases interest rates. What is interesting to watch is the Fed has tried to be as […]
“Our greatest glory is not in never falling, but in rising every time we fall.” – Confucius
The turmoil in stock markets around the world is being blamed on the crash of the Chinese stock market. This is partially true, but it really doesn’t tell the whole story. Let’s take a minute to look a little deeper into the issue. To start, one has to understand what is considered the “Chinese stock […]
The Bloom is off the Rose – Panic in the stock market
At the start of the market today, the Dow was down more than 1,000 points and was down just over 500 points at 10:15. At 10:15, there were only 89 stocks up and a staggering 3,085 down on the NYSE. There are now only 4 stocks at 52 week highs compared to 1,260 at new […]
The stock market has a fever – Is it just a cold or is it the flu?
Since the end of June, the market internals, the number of new highs and new lows of individual stocks, have come under pressure. The U.S. is not alone as we are seeing the same action abroad as well. It started with the “Greek Tragedy”, continued when Chinese stocks crashed, and now we are seeing a […]
Party like its 1999?
Every market is different but there are still lessons to be learned from past markets that can be applied to the current situation. Some parts of today’s market appear quite similar to the 1999 market as told in the song by the artist formally known as Prince. In 1999, technology stocks were being bid up […]
Greece – The problem is now more social than economic
It was just 3 years ago that bond holders took a “haircut” in order to reduce the debt burden in Greece. As you can see in the chart below, the relief was short lived. So here we are again, at the precipice of another Greek tragedy. Today, the problem has both economic and social aspects […]
Pain is being felt in the bond market
The average investor doesn’t understand that they can lose money investing in the bond market. Much of that has to do with the fact that there has been a 30 year bull market in bonds so many investors have never experienced significant losses in fixed income. There is an inverse relationship between bond prices and […]
What is the price of lumber telling us about the housing market?
Housing is very important to the overall economy and a robust housing market is a huge driver of growth. Last week’s housing report was better than expected. Housing starts in the U.S. jumped 20.2% in April and building permits were up 10%. Additionally, single-family housing starts rose 16.7% from March, and 15% when compared to […]
Why Investing in Fixed Income is Difficult in Today’s Market
Two weeks ago, there was over $5 trillion invested globally in bonds priced with negative interest rates. Stated another way, people who bought these bonds are paying someone to use their money! At the same time, money market funds are yielding close to zero. Mexico recently issued an interesting bond. The bond was denominated in […]