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What is Going on With Bonds?!?

Earlier this month long-term Treasury bonds were on the cusp of a major breakout which would have sent prices shooting higher into their final leg of the Bull market in bonds that began back in 2016. Treasury Bears, who are betting on higher interest rates and inflation, had other ideas and have been aggressively selling … Read more

It is a Crowded Market

Investors love index funds, yet they have no idea how over-concentrated the major equity indices are in a handful of stocks. When major equity indices are overweight a small number of stocks, it usually signals the end of a Bull market. Today, the major equity indices are more concentrated in a small number of stocks … Read more

The Mechanics of Quantitative Easing

Investors continue to believe monetary policy can raise asset prices and create inflation when there is no evidence to support it can do either. One of the most important aspects of monetary policy is belief. As long as investors believe monetary policy can raise asset prices and create inflation, they will invest accordingly, which in … Read more

Why QE Does Not Work

Even though the Federal Reserve does not have the power to raise asset prices, investors continue to cram into stocks since they believe the Fed has some mythical power to raise stock prices. The psychological effects of Quantitative Easing (QE) are all the Fed needs since it has brought investors back into the market who … Read more

The Banks Have Started Tightening

Two weeks ago, JPMorgan Chase bank announced it was tightening residential lending standards and a couple of days later that it was also temporarily halting new home equity loans. JPMorgan Chase stated both measures were to mitigate risks out of concerns housing prices may fall due to the pandemic, which is highly probable. While other … Read more

It’s Not the Bottom, Not Even Close

In the past four weeks, more than 16 million Americans have filed for unemployment benefits and the number continues to rise with each passing week. Yet, Wall Street and most investors are more concerned that they just missed out on the bottom of what may be the shortest Bear market in the history of the … Read more

When Will We Sell?

The most common question I get is, when will we sell the Treasury bonds? The real question may be, when will equities be cheap enough to buy? In Bear markets, when stock prices are falling, Treasury bonds are the easiest trade to make. When the Federal Reserve attempts to ease financial conditions, they do so … Read more

Just Don’t Call It Stimulus

Congress has passed and President Trump has signed the largest Federal stimulus package in history to help American consumers and corporations hurt by the Coronavirus. Fiscal stimulus is designed to invoke a reaction or the desired outcome, in this case, it is a bailout to keep the American economy from massively contracting. The notion that … Read more

The Economic Event of Our Lifetimes

It is hard to believe that over a month ago investors were celebrating stock prices making new all-time highs, and at the time of writing, the Dow Jones Industrial Average has shed ten thousand points or 35% in five weeks. The fastest stock market decline in history. Sadly, most investors and professionals did not believe … Read more

Treasury Yields Are Going to Zero

Every Bear market in stocks has a catalyst, with the most recent one being the Coronavirus. Many people believe the Coronavirus has caused stock prices to crash, but the virus merely tipped an already wobbling global economy into what will likely be a global recession or depression, unless the Federal Reserve acts quickly enough. While … Read more