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Michael Pettis: “This is the big one”
Buckle your seat belt Dorothy, cause Kansas? It’s goin’ bye-bye. – The Matrix Michael Pettis, the Beijing-based deep thinker over at China Financial Markets, has an excellent piece up titled What might...
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Psychology of a Market Cycle
This is pretty cool, from Wall Street Cheat Sheet via TBP. Click the image for larger view. I also have a comment posted on TBP relating to emotional extremes and market sentiment, which you can find...
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JS Market Notes: The Line of Least Resistance
I was not pitting my tape-reading knack or my hunches against chance. The inexorable logic of events was making money for me. - Reminiscences of a Stock Operator In Reminiscences of a Stock Operator —...
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Cheap Money (Them That Has Gets)
McDonald’s this week raised $450 million in 10-year debt at 3.5%, a record low yield for a large batch of debt issued by a U.S. corporate borrower. — WSJ, Global Corporate-Bond Boom Gains Pace As the...
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Evidence of Systemic Credit Breakdown
Sobering stuff… PHOENIX — During the great housing boom, homeowners nationwide borrowed a trillion dollars from banks, using the soaring value of their houses as security. Now the money has been spent...
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Why Investors Should Be Terrified of Deflation
In recent months, some investors and traders have openly wondered “Why would deflation be so bad.” Well, that’s a pretty involved topic. But from a simple market standpoint, we can look to the Japan...
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Integrated Macro Analysis, Part I: 3-D Structures and General Conditions
Note: This article is the first in a series. Also available: IMA Part II: The Market Tower IMA Part III: Horizontal & Vertical Exposure Legendary poker player David “Chip” Reese, who routinely...
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Paul McCulley of PIMCO: Print or the Dow Gets Whacked
Paul McCulley, a managing director at bond giant PIMCO, just recently posted his latest Global Central Bank Focus. (You can read it in full here.) I’ve been reading McCulley’s monthly missives for...
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Is the Bond Bubble Comparable to the Dot Com Bubble?
Barry Ritholtz has an intriguing post up,”Do US Bonds Resemble Dot Com Stocks?” His basic thesis, as backed up by observations from Tobias Levkovich and Dave Wilson, is that USTs are acting like dot...
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The High Tech Trifecta (My Favorite Wired Article of All Time)
Markets are rocking and rolling today, and my planned piece is taking a little more elbow grease than expected… so in lieu of that, I offer you my favorite Wired article of all time. The High Tech...
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Is Protectionism China’s Achilles’ Heel?
In The Hobbit by J.R.R. Tolkien, there is a mighty dragon named Smaug — one of the last dragons of Middle Earth. Smaug, hundreds of years old, sits on a vast pile of golden treasure in the bowels of...
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Thoughts on the P/E Ratio
TBP has a good post up on P/E Expansion & Contraction featuring a helpful chart from Crestmont Research. My discussion comment is below — you can also click on the chart thumbnail for the...
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Is QE Inflation a Self-Fulfilling Prophecy?
Is QE inflationary? Those who subscribe to Modern Monetary Theory (MMT) say no. In that vein, few have been as vocal, or as convincing, in defending and explaining MMT as Cullen Roche over at The...
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A Public Service Announcement: Soros on False Trends
Things are getting nutty right now… and tempers are starting to fray. On one side of the coin, you have long-only types trumpeting thinly veiled versions of “I told you so” and “You were dumb not to...
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Weekender: Swan Spotting
My favorite piece of research this week: A power-point presentation called China — The Mother of All Grey Swans by Vitaliy Katsenelson. Over the course of 50+ well-researched slides, Katsenelson makes...
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Rant: The Fed Should Buy Stocks? Seriously?
Help me understand this. How can smart people be so dumb? I’ve never met Roger Farmer, but he is almost certainly a smart guy: Chair of the UCLA economics department, author of two books on the global...
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The Mathematics of Persistence
Many years ago (circa 2005), I came across the below food-for-thought piece from a musical theorist named Lee Humphries. The ideas presented intrigue to this day. Investment assumptions aside — An 8.5%...
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Weekender: Stores of Value, Feedback Loops, and Gresham’s Law
In between family, presents, and the eating of Christmas cookies, the holidays gave time to revisit a book or two. One such book was Paper Money by Adam Smith (aka George Goodman). Paper Money is a...
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Upgrade Your Cognitive Toolkit
In the eyes of the curious, the world is an endlessly fascinating place. There is a well-nigh inexhaustible stream of ideas, events and phenomena worth pondering — and profiting from. It is in this...
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A Casual Introduction to the Theory of Constraints
Some off-the-cuff thoughts from 30,000 feet (both literally and figuratively, via coast-to-coast plane trip)… There is a guy named Eli Goldratt whose ideas I like a lot. Goldratt is a sort of...
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Inflationary Boom-Bust Cycle Redux
In December of last year, via The Trouble With MMT, we laid out an explanation of the inflationary boom-bust cycle, as driven by unproductive spending and excess debt. Given the “busts” in various...
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Insight from “The Philosopher”
Invisible Hands by Steven Drobny is one of the best trading books I’ve read in years. (It was first inhaled a while ago, but the material is so deep it is still sinking in.) If there is an intellectual...
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Swing Trading in Two Sentences
Want the essence of swing trading in two sentences? Here goes: In uptrending markets, buy weakness as it returns to strength. In downtrending markets, sell strength as it returns to weakness. There is...
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Quick Thoughts on SQE (More Fed Easing)
In response to a message board discussion on upcoming SQE, aka “sterilized quantitative easing” prospects: I can’t help but wonder if QE (and the coming prospect of SQE) are both more placebos than...
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A Clear Example of “Buy the Rumor, Sell the News” (or Vice Versa)
You’ve probably heard the old expression, “Buy the rumor, sell the news.” Wednesday’s action gives a clear example of exactly what that means. XHB, the popular homebuilders ETF, has been in a...
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