Policy makers declare the debt crisis is fixed and an imploding housing market is “contained,” central banks flood the market with liquidity—wait a minute… does this remind anyone else of 2008? We all know that central banks and governments have been actively intervening in markets since the 2007 subprime mortgage meltdown destabilized the leveraged-debt-dependent global [...]
Are You Optimistic or Pessimistic About The Future?
April 10, 2012 By Leave a Comment
Here are the key points of disagreement in the never-ending debate between optimists and pessimists, bulls and bears. Based on these observations, and on our evaluation of the leading economic indicators, we believe that the momentum in the economy is still positive. The recent decline in the volatility of the stock market clearly shows a [...]
Does the market predict the future?
April 7, 2012 By Leave a Comment
One of the oldest axioms of stock market investing is that the market is efficient when it comes to predicting the future. The market is forward-looking, and it tells investors what to expect roughly 6 months in the future. But is the market really an efficient pricing mechanism, or is it simply a reflection of [...]
Take our Market Volatility poll
April 2, 2012 By Leave a Comment
Volatility has been declining steadily since the market found a bottom in early October of last year. As measured by VIX – the so-called ‘fear gauge’ – volatility has declined from 45 to 19 in just 6 months. This means that investors are less fearful of a new financial meltdown than they were back then. [...]
Outlook for 2nd Quarter
April 2, 2012 By Leave a Comment
The following is an excerpt from the latest UBS Global Strategy report. “While markets could go higher still, gains are likely to be more modest and performance across regions less uniform going forward. Keep the following in mind: • Economic surprises to wane: With expectations now being reset higher, the scope for economic surprises [...]
How Accurate Are Predictions By Experts?
March 11, 2012 By Leave a Comment
In his 2005 book “Expert Political Judgment: How Good Is It? How Can We Know?” Philip Tetlock painstakingly tracked the predictions of 284 so-called experts in the fields of politics and economics in order to determine how accurate they were. His study lasted 20 years and included more than 82,000 predictions from this distinguished group of [...]
Equity Market Outlook – March 2012
March 4, 2012 By Leave a Comment
Overview. Global equity markets are reflecting more confidence in the ability of the policy makers in Europe to avoid a catastrophic failure of Greek sovereign debt, and a possible meltdown of the European financial system in general. While the risk of that happening has certainly decreased, we don’t believe it’s a sure thing that we [...]
Volatility Will Continue To Spike
December 22, 2011 By Leave a Comment
The equity markets have been stuck in a wide trading range for almost eleven years now, and there’s no end in sight. The last time this happened was the period from 1966 to 1982, when the stock markets essentially went nowhere for 16 years. It’s very possible that we could continue this volatile, sideways move [...]
Not Out Of The Woods Yet
December 10, 2011 By Leave a Comment
Investors in the stock market liked what they heard out of Europe last week. Some progress was made, for sure, but we remain cautious and more than a little skeptical about what the news really means in terms of actual progress. The situation in Europe is a holy mess, and political posturing will only take [...]
Can the spending of the richest 1% make up for the non-spending of the 99%?
One of the burning questions on the minds of economists these days is whether or not the top 1% of wealth owners can carry the economy solely on their backs, or do we need participation from the cash-strapped and debt-burdened 99%. In his article titled “Art for Art’s Sake? Or To Protect Wealth?” Randall Forsyth [...]