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  • German Lessons – Dire Warnings from Overseas

    Things are falling apart across the Atlantic, and the implications for U.S. investors are now loud and clear.

    As an American who grew up on baseball, yet was educated and employed (partly) in Germany with a residence today in France, I suppose it's fair to say I have a global perspective as to both the realities and stereotypes of certain cultural and financial nuances.

    As for Germany, well, it conjures up a great deal of stereotypes and ideas, both fair and unfair. I won't defend or address those here.

    However, what most of us on both sides of the Atlantic (including the French...) can agree upon is that Germany has a uniquely strong passion for disciplined spending, thrifty saving, and currency risk sensitivity.

    This land of Max Weber, along with blunt speak economists like Ludwig von Mises or Walter Eucken, is all too aware (remember Weimar) of what happens when wheel barrels of worthless money are rolled out to solve chronic debt problems.

    In short (kurz gesagt): It doesn't work.

    Here's why... Read more »
  • You’re Now Entering the “Twilight Zone” – Here’s What to Watch Out For

    Last week was crazy in the markets, and this one will likely be no less so - if not crazier.

    When you add up all the irrationality out there, and whimsical behaviors on the part of investors, we're definitely in a twilight zone of monstrous proportions.

    Last week, the equity markets showed both their sane and insane sides: sane for dipping on sagging macroeconomics and insane by rallying at week's end on a bet (frankly, a guarantee) that the Fed will lower rates again this month, and then again and again...

    But it's these low rates (now negative in Japan and Europe) that got us into this pickle in the first place.

    Sure, in the near-term, low rates buy time and a rationale for dip-buying.

    Longer-term, however, the debt bomb they create will eventually explode and money will burn.

    When will the insane get sane? That is, when will markets stop rising on bad news?

    Again, we saw a smidgeon of that last week, until the insane reappeared, almost on cue.

    Let's discuss...

    Read more »
  • Executive Rats are Jumping Ship as the Volatility Iceberg Looms

    You may have noticed that yesterday's markets saw an intraday swing of 450 points.

    Volatility has once again reared its ugly (yet oh-so-predictable) head.

    Last week the volatility came from our broken repo markets. This week, it's the painfully awful ISM services index data that's sending the markets into yet another hissy fit.


    The ISM data measures the health of the non-manufacturing sectors of the economy, and they are anything but healthy numbers - just a couple percentage points away from full-on contraction.

    And you can bet that's reason for concern.

    And yet by the day's close, markets rebounded on this bad news.

    Crazy?

    You betcha...

    Read more »
  • The Ticking Time Bomb that Almost No One Sees Coming

    There are just not enough dollars today to meet the fantastic array of nuanced and complex dollar demand in both U.S. and global markets.

    This means big, big trouble ahead - and hence money printing at full speed.

    How do we know? Well, we've seen this movie before-in fact, we're part of the system that wrote the script.
    Read more »
  • Grim Week Bodes Poorly for Your Pocketbook – What to Do Now

    Welcome back to What's Happening Now, following a grim week for investors, especially those hanging on for that last evasive yet entirely possible "melt-up" in stocks to come should the Fed print more dollars out of thin air.

    Beyond (and more important than) the impeachment proceedings launched in the U.S. last week, China trade negotiations fell off track again as new U.S. threats to contain even passive investing in China, along with Chinese company listings on U.S. Exchanges, were floated.

    A resolution of the trade war would send markets temporarily much higher; as of today, however, such a resolution remains elusive.

    In the meantime, U.S. manufacturing data continued to plummet... to below breakeven.

    And on the Central Bank front, necessary Fed repo rescues alarmed the U.S. as chaos at the European Central Bank mounted.

    In short, a lot is going on and not much of it is objectively good, though further Fed "stimulus" could easily buy us more time and highs.

    Let's discuss...

    Read more »

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