The U.S. Federal Reserve will adjourn its two-day Fed meeting today (Wednesday) as the Fed mulls over rate hikes.
What's spooked markets over a potential rate hike is the possibility that with so much global stimulus, the United States will sink into deflation should it raise rates.
The U.S. Federal Reserve will adjourn its two-day Fed meeting today (Wednesday) as the Fed mulls over rate hikes.
What's spooked markets over a potential rate hike is the possibility that with so much global stimulus, the United States will sink into deflation should it raise rates.
The tide is turning for crude oil prices. Following some nice recent gains and despite a dip on Tuesday, the market currently remains at just below $60 a barrel for West Texas Intermediate (WTI) crude oil futures in New York. The recent rise in prices would seem to be just what the smaller operators in the U.S. need to avoid a sector meltdown. A few months back, when prices were pushing lows of $40 a barrel, there was widespread talk of a wave of bankruptcies coming in the oil patch. The picture is now better, given a recovery in crude prices.
The tide is turning for crude oil prices.
Following some nice recent gains and despite a dip on Tuesday, the market currently remains at just below $60 a barrel for West Texas Intermediate (WTI) crude oil futures in New York.
The recent rise in prices would seem to be just what the smaller operators in the U.S. need to avoid a sector meltdown.
A few months back, when prices were pushing lows of $40 a barrel, there was widespread talk of a wave of bankruptcies coming in the oil patch. The picture is now better, given a recovery in crude prices.
A few weeks ago, the man formerly known as the Bond King, Bill Gross, tweeted that shorting German bunds would be the trade of the century.
I was gratified to see that he was reading my mind, as readers of my Credit Strategist newsletter already know.
As a result of a massive bond-buying program by the European Central Bank (ECB), the yields not only on German bunds but on all European debt had plunged to ridiculously low levels.
Here's what you need to know...
Central bankers disguise themselves as friendly shepherds. But really it's more of a "wolf guarding the henhouse" situation...
You see, we've been experiencing deflation, not inflation...on a global scale. Why aren't prices rising? Why aren't wages rising? Why is global demand so lackluster?
Well, the answer has to do with central bankers' and how they treat your money...
Last week, the European Central Bank's turn finally came to announce large scale quantitative easing.
As the continent witnesses a battle between deflation and attempts at inflation, will it finally be enough?
Europe is following in the footsteps of the United States, hoping for similar "successful" results.
Instead, it's likely to fall somewhere between the U.S. and Japan.
From the Land of the Rising Sun there is precedent, but it's a forewarning.
ECB QE and EU LTRO for Dummies: As soon as you read this explanation, comprehensible to even the dumbest of the dumb, you'll be set to trade initials.
We made 382% gains trading these initials. And there's more: Once we closed out, we re-entered.. and now we're up 180%.
Here's how to make real, easy money from the world's biggest economic experiment...
While this week's announcement of a massive new QE program by the European Central Bank (ECB) was the worst kept secret in the world, it may not produce the results that everyone expects.
For one thing, while the immediate reaction was to push European interest rates lower, recent experience in the US shows that QE results in higher rates.
And while everyone is talking about deflation - and Europe is definitely experiencing deflation - the US is still experiencing inflation that could lead the Fed to start raising rates by summertime.
Start the conversation
Leave a Reply
Quantitative easing doesn't work.
And that can be a tough pill to swallow. Especially for the world's central bankers who are only more aggressively employing QE strategies to bring an end to their economic woes.
Here's why they're doing it anyway, and why it won't bear fruit...
Start the conversation
Leave a Reply
There is a lot of lip service being paid to the upcoming stock market crash that we're supposed to expect once the Federal Reserve starts raising rates.
Every time we get close to a regularly scheduled Federal Reserve statement, financial pundits pontificate about the nuances of what the Fed Chair might say, not say, or imply.
It's like clockwork.
But one theme remains constant: any tightening of the Fed's easy monetary policies will spell impending doom for the easy-money-addicted stock market.
The only problem, though, is that historical facts just don't support the fear. In fact, there are opportunities for investment out there no matter what rates do... Full Story
Start the conversation
Leave a Reply
Despite billions in bond-buying "quantitative easing" and near-zero interest rates courtesy of recent Fed policy, Americans have stashed $1.8 trillion in low-yield accounts since the QE program started in 2008.
It's a failed stimulative policy that has left a shocking $10.8 trillion on the sidelines. But when it comes to investing in stocks in particular, the news gets even worse.
Start the conversation
Leave a Reply
In my last column, I explained why you should always keep the bond market in mind, because stocks and bonds are inextricably interconnected.
They're inextricably interconnected because interest rates matter.
When expected relationships between stocks and bonds (interest rates) diverge, it's important to take notice and consider what it could portend for both stocks and bonds.
Here’s why the current market divergence has a lot of analysts worried…
Start the conversation
Leave a Reply
Janet Yellen made her debut before Congress Tuesday as the new head of the Fed...
And just like they did for her predecessors, the markets hung on every single word.
Except in this case, nobody (and I mean nobody) expected any major fireworks. What they were looking for instead was a confirmation that it would be "business as usual."
To continue reading, please click here...
Start the conversation
Leave a Reply
I didn't think it would happen, but Fed Chairman Ben Bernanke up and did "it" a few minutes ago.
He announced the "Fed taper" - the Fed will cut its bond buying by $10 billion a month (to $75 billion) beginning in January.
I think there are a few points to consider about Bernanke's move. I want talk briefly about those, and then highlight what this news of a Fed taper means for your money.
To continue reading, please click here...
When Janet Yellen testified before the Senate last week, she inadvertently let slip a major clue as to where the real money will be made over the next year or so. And we're not talking about the record stock market highs, either. Knowing how to interpret this single phrase is the key to unlocking a $2.5 trillion market.
Here's what Janet Yellen said...
Be careful out there.
The stock market rally that started in March 2009... The one that's taken us out of the Great Recession and to new highs... The rally that's driving sentiment indicators of people who benefit from rising financial assets directly, peripherally, or because they hope all boats rise with the market...
The rally has never been loved.
The thing is, equity markets don't need love to go twice as high from here, or three times as high in the next 20 years. If they get what else they need, they'll keep going higher.
We could be on the verge of a generational bull market. That's if deficit-plagued, interconnected global sovereigns deleverage and, at the same time, re-capitalize middle and rising classes by making "recourse-sound" capital available and simultaneously reconstituting entirely the notion of taxation.
Too bad the likelihood of that happening is somewhere between slim and none.
That's one reason why I'm an increasingly reluctant bull.
But there's another reason too.
And it has to do with deflation...
Start the conversation