The “everything” rally

The equity market rally picked up steam in the final quarter of the year as investors cheered a deescalation of trade tensions with China, signs of bottoming economic data, corporate earnings results that were better than feared, and the Federal Reserve’s third interest rate cut in 2019. The S&P 500…

Expect the unexpected

Calendar 2019 was an interesting and unexpected year in the fixed income market. After four interest rate increases in 2018, it was widely expected that the Federal Reserve would continue to tighten the money supply in order to regain a “normal” interest rate yield curve. Entering the year with the…

Our 2020 vision

Given that the stock market generally discounts events at least 6 months in advance, summer is the time for judging the upcoming market year. Investors are turning their focus to 2020 - particularly prospects for world economies, corporate earnings and interest rates. There are four major economic factors driving market…

The Fault is ours, Ray

According to Forbes Magazine, Ray Dalio, founder of Bridgewater Associates, is America’s second richest money manager. He trails only George Soros in the pantheon of hedge fund “masters of the universe”. Dalio appeared last month on CBS “60 Minutes” to lament the demise of the American dream. He called inequality…

The Fed’s in waiting mode

With a third of the year over already, much of the market volatility encountered in late 2018 is fading in the rear-view mirror. While the China trade dispute has reemerged recently as a top risk for investors, markets are still generally positive for 2019. Brexit and uncertainty about future Fed…

Vladimir Ilyich Trump

“The issue of paper money is the worst kind of compulsory loan… It worsens the conditions principally of the workers, of the poorest section of the population.. It is the chief evil in the financial confusion.” —Vladimir Lenin No stranger to institutional thievery, Lenin would have no trouble recognizing the…

The Inversion Aversion

Most of 2018 played out according to plan in the bond market. Early in the year market strategist expected faster U.S. economic growth, higher inflation and a Federal Reserve that might be “behind the curve” in its efforts to head off inflation via higher interest rates. Tax cuts, healthy job…

Train Spotting

My first boss told me something years ago about the bond market that I’ll never forget. He said, “never stand in front of a moving train.” I think about it every time I trade. He meant that if interest rates (the train) start to move quickly in one direction and…

The Pottery Barn Economy

Back in 2002, then U.S. Secretary of State Colin Powell had a very blunt and direct way of framing the dilemma over invading Iraq. He called it the Pottery Barn rule: “You break it, you bought it,” he said. Powell’s phraseology ultimately proved prophetic - presaging a painful chapter in American…