Market

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 »
Market

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 »
Market

Three Legs of a Broken Market Stool

We're enjoying your comments and questions - especially one that essentially reads, "What's holding these markets up with all the bad news out there?"

That's the magic question. Here's our answer:

There are basically three forces keeping the market's head just above water, namely corporate stock buybacks, the proliferation of passive stock-index funds, and (of course) the Federal Reserve.

And as both math and history confirm, they are each highly dangerous and, together, they are treacherous.

Let's discuss... Read more »
Market

What Low Rates Do to Your Favorite Stocks

The relationship between low rates and inflated stock prices is dangerous, and that danger is likely impacting your money.

As market veterans who've seen this movie before, we'd like to make this point stick with another source of entertaining fiction - Netflix.

The company's taken on a frankly disturbing amount of debt, something that even a market darling FAANG stock isn't safe from.

Here's why you should keep an eye on this debt drama... Read more »
Investing

What the Fed Says Doesn’t Matter: Here’s Why

Welcome back to What's Happening Now, your weekly guide to what's going on right now and why it matters to you - and your money.

In this topsy-turvy world of Fed markets rather than stock markets, bad news (as in the economy is worsening) can often translate to good news to investors, because it means more Fed "support" - i.e. the "faking it" policies of a now openly rigged to fail market.

Coming off a week with no less than seven Fed officials, including Fed Chair Jerome Powell, opining on interest rates and the state of the economy, markets closed last week confused for good reason.

We're going to dive into why what the Fed says doesn't matter; rather, it's what it does and how the markets react to it...

Let's discuss...

Read more »