I just finished reading “All the Devils Are Here” by Bethany McLean and Joe Nocera.  It is one of many books chronicling the global financial crash.  However, there is less narration and more conclusions than most.  The one that most resonated with me was “The rating agencies were at the very heart of the madness.” While … Continue reading At the Heart of Madness and/or Evil

I just read the speech of Charles Plosser, President of the Federal Reserve Bank of Philadelphia, that he gave last Friday. It was widely reported as the Fed’s “Exit Strategy” from its very successful effort to save the economy. Mostly, I agree with him, especially his belief that the Fed’s action be made clear long … Continue reading Technical Problem for the Fed

The big show is Friday at 8:30AM. That’s when the monthly jobs report is issued by the government, i.e., Bureau of Labor Statistics. It is the single most important statistic released each month and can easily move markets. If the number is much over 225 thousand jobs, the market will probably rise. If much less, … Continue reading Coming Feature . . . Starring a Number!

Fridays are usually the most volatile trading day of the week, as traders try to protect themselves before the weekend when the market is closed. The most volatile Friday each month is usually the day when the “Monthly Jobs Report” is issued, which will be this Friday. That is the most closely watched economic report … Continue reading An Exogeneous Week . . . Except Friday

On April 8th, there could be another government shutdown, unless Congress passes a budget. They are still operating until a continuing operating resolution, their third one, unable to agree on a budget for this fiscal year. The Tea Party wants another $61 billion cut out of the budget (Who doesn’t?). The Democrats think it is … Continue reading Send In The Clowns

The average trading volume of oil futures is about 890,000 thousand, which equates to about 890 million barrels per day. Yet, the average consumption of oil is less than 20 million barrels per day. While there are certainly some other issues and uses, it does lend some perspective into just how much speculation there is … Continue reading The Cost of Market Prices

President Harry Truman is famed for asking “Give me a one-handed economist!” His lament was that economists always say “on the other hand.” Today’s economic news is a good example. First, the GDP growth rate was revised upwards to 3.1%, which was better than expected. “On the other hand” shortly afterwards, consumer sentiment numbers were … Continue reading Poor Harry . . .

Sometimes, things come into better focus when you stop looking at them. I’m sitting on a sunny balcony in Myrtle Beach, reading “Super Sectors” by John Nyaradi. Sector rotation is a method of investment management whereby the investor buys cyclical stocks as the economy grows and defensive stocks as the economy declines. An example of … Continue reading Kicking Back . . .

Did you feel the tide going out? It is the tide of uncertainty that swept over the market for the last few weeks. Markets don’t like uncertainty! There is less uncertainty about Khaddafi; he’s toast! There is less uncertainty about Japan; it will take $235 billion over 5 years to rebuild, according to the World … Continue reading Where’s My Party Hat?

It is hard to remember so many important news events happening at the same time. We’re going to establish a no-fly zone over Libya, a move advocated by France, who does not have a reputation as a war-like nation. Did you hear that the protests in Bahrain were brutally surpressed by the Saudis? Gas at … Continue reading Drinking From a Firehose

Shortly before 3PM on May 6th of last year, I was stunned to watch the Dow drop almost 900 points in minutes during the now infamous “Flash Crash.” Much studied since then, we have been assured the new market breakers would prevent that from happening again. Shortly after 11AM yesterday, I watched the Dow drop … Continue reading No Flash Crash II . . . Whew!

In the first quarter of last year, the market set a new post-Lehman high but got de-railed by the European Debt Crisis. In the first quarter of this year, the market set another new post-Lehman high but got de-railed by the North African revolutions, the tragedy in Japan, and, oh yeah, the European Debt Crisis … Continue reading An Important Distraction