peak-bonds-interview-with-financial-sense

Peak Bonds Interview With Financial Sense

Last week Tyler linked up with our friend Cris Sheridan at Financial Sense to discuss the peak in the bond market. The last time they talked in July, Tyler explained the asymmetric risks bond investors were facing with yields hitting a lower bound. We saw the result of that asymmetry over the last month as bond markets quickly lost more than $1 trillion after the Trump win. In addition to the top in bonds, they also discussed: Read more

Trump

Regime Shift: What Trump Means for Markets

It’s interesting how quickly the consensus around what a Trump presidency means for markets went from “it’d be an unequivocal disaster” to “his policies will bring forth a new and lasting economic expansion.” Read more

Bond Bubble Bust

Global Bond Bubble Bust

Rarely do we investors get a market that we know is overvalued and that approaches such clearly defined limits as the bond market now. That is because there is a limit as to how negative bond yields can go. Their expected returns relative to their risks are especially bad. If interest rates rise just a little bit more than is discounted in the curve it will have a big negative effect on bonds and all asset prices, as they are all very sensitive to the discount rate used to calculate the present value of their future cash flows. That is because with interest rates having declined, the effective durations of all assets have lengthened, so they are more price-sensitive. For example, it would only take a 100 basis point rise in Treasury bond yields to trigger the worst price decline in bonds since the 1981 bond market crash. And since those interest are embedded in the pricing of all investment assets, that would send them all much lower.

Those words are from the most successful hedge fund manager of all time — Ray Dalio. Read more

Chinese Yuan

The Chinese Yuan and a Global Tipping Point

Every market cycle has 1 to 2 macro drivers at the heart of its regime. We call these the fulcrum points. Keep an eye on the fulcrum and you’ll know when a major cyclic turn is underfoot. Read more

Woof Woof Long Trupanion Inc

Woof Woof – Long Trupanion Inc. (TRUP)

Trupanion Inc. (TRUP) is a momentum play breaking out of a 19-week ascending triangle. Read more

Fed and BOJ

What the FED and BOJ Decisions Mean for Markets

No surprises here…

Both the Fed and BOJ did exactly what everyone expected them to. Read more

Money Market

Expect Higher Correlations And Volatility In This Fed Manipulated Market

We’re trading in some truly interesting times.

Check out the index below from Credit Suisse depicting contagion risk across global markets and asset classes. It’s now showing that global markets and assets are at their highest correlation since the index was created. Read more

Thanksgiving

Marxist Bubbles And Taleb’s Turkey: It’s Going To Be An Awkward Thanksgiving

Over a third and growing quickly. That’s the share of the market that’s now comprised of blind sheep passive indexers.

That much passive money is nothing to sneeze at. Call me old-fashioned, but I was originally led to believe that the function and role of markets in a capitalist society was to direct capital to its most productive end — you know, Smith’s “Invisible Hands” and the productivity/profit link and all that jazz.

So what happens when instead of being deployed by thinking profit-driven investors… a growing portion of a nation’s savings are invested with the same diligence generally utilized by a co-worker choosing donuts for his office mates: “Umm…yeah, I’ll take two dozen of whatever you got? Read more

USD Currency

Liquidity Crisis? What The New SEC Money Market Fund Regulations Mean For The Financial System

Things could get real interesting in the next few months.

On Oct. 17th a new SEC rule finally comes into play that will affect money market funds and liquidity across the financial sphere. There’s potential for some really big moves here. Read more

If you cant beat them, join them

SitRep – If You Can’t Beat ’em, join ’em

The markets are rallying hard! In this Market Sitrep we explore what’s ahead for U.S. equities in the near term. We examine the 3 main drivers of the rally, and then dive into why this breakout may actually have some legs. The episode finishes with a look at all the stocks we have bought or are interested in buying. Read more