Christmas Price Inflation
Inflation risks are greatly overstated, says Ben Bernanke. We should be worried about debilitating deflation, not inflation. Ben B., of course, focuses on core inflation as his guide to price stability. Core inflation excludes food and energy. So as long as you don’t mind starving in the freezing cold... Read the full story
The Phony Stock Market Rally
The S&P 500 has been on a tear since the Fed first started floating the idea of quantitative easing 2.0. Since August 31, the S&P is up more than 11%. The gains are of course nice to see, but the rally is a phony. Stock prices are not rising on improving fundamentals or cheap valuations. Stocks... Read the full story
Vital Intelligence for Investment Success
If you read The Wall Street Journal or the Financial Times, you have likely heard about the “risk trade.” It’s a term journalists have been using with increasing frequency to explain the behavior of financial markets. You see, since the financial crisis struck, risky assets have either been rising... Read the full story
The Record High Price of Gold: A Currency Story
Gold reached a record high on Tuesday, closing at $1,271.70 per troy ounce. It is up over 15% this year. That’s great for gold investors, but what does it mean for the currency in which it’s being quoted, the U.S. dollar? Relative to gold, the dollar, as shown in the chart below, is worth only two-thirds... Read the full story
Swiss Franc Smashes U.S. Dollar
The Swiss franc blasts through parity with the U.S. dollar. The franc is up more than 14% versus the USD since hitting a low in June of this year. Read More →
More Trouble in the PIIGS Pen
Despite the best efforts of European policy makers, the CDS of the Euro-area’s PIIGS countries continue to signal severe stress. Ireland is the latest country to come under pressure from financial markets. Irish CDS have recently reached a new high. The market is anticipating that a default may be... Read the full story
Gold Nears All Time High
Up 14% YTD, gold is once again on the verge of hitting another all-time high. Read More →
This Economy is Booming
The economic recovery in Brazil continues to gain momentum. Brazilian GDP grew at 11.4% in the first quarter of 2010. Inflation remains tame by Brazilian standards at less than 5%, employment is up smartly, unemployment is at a record low, and consumer confidence is near pre-recession highs. Contrast... Read the full story
Back to Even and Then Some
Are you tired of the media’s nonstop market analysis yet? It’s distracting at best and harmful to your health at worst. With the Dow up 7.1% in the month of July, it’s worth noting how little ground has been picked up from mid-June of this year through the end of July. Even after climbing out of... Read the full story
Global House Price Imbalance
According to The Economist, there are still six global real estate markets that are more than 30% overvalued. Australia shows the largest overvaluation at 61.1%, followed closely by Hong Kong and Spain. What happens when these market values return to fair value? Frightening. Read More →
