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Archives for October 2016

Worthy Reads: Venezuelans gather for mass march against Maduro

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Slowdown in State, Local Investment Dents U.S. Economy (WSJ) ‘High pressure economy’ may punish both stocks and bonds in 2017 (MarketWatch) Google puts the brakes on Fiber and plans for layoffs (Money) Macroprudential policies, the long-term interest rate and the exchange rate (BIS) Venezuelans gather for mass march against Maduro (FT) … [Read more...]

Portfolio Strategy: Will the Bubble Get bigger?

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Janet Yellen gave a speech earlier this month where she suggested that the Fed should run a “high-pressure” economy in an effort to fix structural damage done to the supply-side of the economy by the financial crisis. What is a “high pressure” economy? Here’s Yellen’s explanation and justification (emphasis is mine). If we assume that hysteresis is in fact present to some degree after deep recessions, the natural next question is to ask whether it might be possible to reverse these adverse supply-side effects by temporarily running a "high-pressure economy," with robust aggregate demand … [Read more...]

Is Your Valuable Credit Card Information at Risk Right Now?

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October is Cyber Security awareness month , and I've been writing (read here, here, and here) that you must protect yourself from hackers and scammers. Today The Wall Street Journal published an article warning about the dangers of "no-card-present" online transactions that could drain your credit card balance. After a massive industry undertaking to secure point of sale transactions with chip enabled credit cards, hackers have moved to the one place where there are still no chip readers, the internet. Robin Sidel writes for the Journal: As a result, online merchants and the card industry … [Read more...]

Germany Massively Wasting Its Potential to Grow

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The Wall Street Journal shows that German businesses have piled up $500 billion in cash and deposits leading to underinvestment in German industry. FRANKFURT—German companies are sitting on a half-trillion dollars of cash but are reluctant to invest it in their own country, potentially threatening the country’s competitive edge and European economic growth. Germany’s nonfinancial businesses have saved more than they have invested for the past seven years, piling up about €455 billion ($500.4 billion) in cash and deposits, German central bank data show. Over the past decade, German … [Read more...]

Do Presidential Elections Hurt or Help Consumer Confidence?

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From the end of July, through the end of November, consumers are barraged by negative campaigning and big promises. Take a look at the chart below to see how their confidence was affected by each campaign cycle. Ending values greater than 100 indicate an improvement in confidence, and values below 100 indicate a decline in confidence. … [Read more...]

Fidelity Sees Yen as Low at 120

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Keeping long-term bond yields at zero is never a good strategy for currency strength. But that is exactly what the Bank of Japan is doing. As a result, the dollar has strengthened 4% against the yen over the last month. Perhaps the only thing holding the yen up this high is the market's disbelief in the Federal Reserve's readiness to raise rates. Janet Yellen's recent speech about running the economy at "high pressure" (Read: inflationary) only reinforced the market's belief that no interest rate increase is forthcoming. That could be the yen lifeline Tokyo is looking for. Bloomberg … [Read more...]

Are you part of the most crowded trade in income investing?

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Bloomberg reports that the most crowded trade in income investing is at risk of overheating. Long-bonds have been big winners YTD, but according to Bloomberg that trend may be at risk of reversing. Even if you aren't interested in taking your investment advice from a news outlet, the risk in long-bonds far outweighs the opportunity. The hottest craze in fixed income is at risk of overheating. A headlong rush into higher-yielding, long-term bonds in recent years has created one of the most crowded trades in financial markets. Investors seeking relief from central banks’ zero-interest-rate … [Read more...]

Is it Time to Take a Fresh Look at MLPs?

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Barron's thinks so. MLPs have long been a sector of focus at Young Research. Here Barron's makes the case for taking another look at MLPs. We would agree, though investors should be sure to separate the fish from the fowl (yes there are some fowl in the MLP universe) as we do for subscribers to Intelligence Report. Many investors who exited energy-focused master limited partnerships earlier this year as oil prices crashed and MLP prices fell even harder, have struggled with when—and if—to get back in. The sector rebounded sharply off its February lows, but since June, gains have stalled as … [Read more...]

Is Your Home Security Camera actually Spying on You?

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It's a hard thought to swallow, but could your home security system be turned against you? What about your web-connected baby monitor? Have you changed the passwords on these devices since you purchased them? If not, Hannah Kuchler writes for the Financial Times that you may be leaving yourself open to cyber spying, or having your devices hijacked, and used against others in what are known as Directed Denial of Service attacks. Make sure you change default passwords on all your internet connected devices. October is Cyber Security awareness month, and there's no better time than now to check … [Read more...]