You've no doubt heard this before. Bonds, especially the high yield kind, look bubbly. Things usually have a way of going on longer than most expect. Preceding the subprime mess there were lots of people calling attention to it. But it's about timing, itchy-sticky timing.
Most of these people were early, too early to get any attention because, like many things, the mess had a momentum all its own. Then one fine day.....the momentum changes and the only thing left is the mess.
http://www.cnbc.com/id/101604362
There are too many good points in this post to miss if even you only remotely subscribe to the idea that the current band of bandits running this global economic freak show are as clueless as a dead fish.
Hoodwinked into accepting a lower standard of living is
right up there with it's patriotic to consume until you're consumed by
the low man. It will take more than the Great Rotation. Sell your gold and other commodity-based holdings at your peril. Blinders are for horses.
http://davidstockmanscontracorner.com/the-global-economy-is
For want of a better term we'll just call it encouragement.
That's the real purpose of lower interest rates--get things moving again as in borrowing and spending. In government parlance it's called tax and spend. They're both shards from the same cloth.
The recent stand-in-line response for Greek and Puerto Rico bonds should come to mind. Yield-starved investors and Wall Street Wolves lined up to get them, the former for the yield, the latter to dump at a profit.
No matter how they try to change it, this is still the same old Yin-Yang Avenue we've all been down before. Where you see one, you know the other isn't far behind. It's like the line in the old Frank Sinatra tune:
"Love and marriage go together like a horse and carriage. And this I'll tell you, brother; you can't have one without the other."
http://fivethirtyeight.com/features/the-potential-bubble-the-federal-reserve-cares-most-about/
The market rallied today coming off its near correction in the Nasdaq and small caps, but the real question remains: What, if anything, does it mean or forebode?
Have Traders Called It Quits on Irrational Stock Market? Read more: http://www.minyanville.com/special-features/wall-of-worry/articles/wall-of-worry-us-economy-federal/4/22/2014/id/54676#ixzz2zejxFJQf
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Meanwhile, the S&P climbed higher for the 6th straight session and the argument between the bulls and the bears continues.
http://www.usatoday.com/story/money/markets/2014/04/21/is-stock-market-correction-over/7859325/
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Real estate versus gold, the rich against the poor. Here's an interesting read about the subject. The bottom line it's about making money and where and why people choose the investments they do. It's a bit more complicated or befuddling than one would suspect.
http://t.ritholtz.com/bigpicture/#!/entry/the-rich-buy-real-estate-the-poor-want-gold,535661b6025312186cfaacba
Our bulletin board take on the market.
--next entry point if S&P 500 pulls back to its 200-day moving average around 1,700 level.
--earnings aren't great, but not horrible either. Coke (KO) and GE, two laggards in this market, rallied after reporting. Look for more of the same.
--big caps (value) still rule and have a ways to go
--starting the year energy was supposed to be a no-show. but check out the gas prices over the past 5 weeks at your local pump or the futures contracts, up 1.1% earlier this week and up 11% so far this year. Gasoline futures are a leading not lagging indicator
--we continue to be long energy as US refineries export more overseas. Media obsessed with fantasy of lower energy prices...delay of Canadian pipeline no accident.
--bond yields still no threat to equities and won't be until 10-year bond yields 3.5%
--joe public still scared and out of the market, thinking real estate safer investment. JP won't be back in until froth on the beer much greater.
--higher interest rates when they hit will help financials
--cyclicals, materials look good here as Fed gets further behind the curve.
--while back warned about number of IPOs hitting market, many with no earnings. Much of water cooler-cocktail palaver at time about these IPOs printing money for investors.
--this bull market now 61 months young, longest in recent years 64 months, only '82-'87 and '96-2000 longer...difference is rates going up then and Feds pulled the punch bowl from the party.
--that will happen here too, but the market will see it first.
--10% from here puts S&P near 2,000 mark, quite doable before pullback.
Hey! What did they expect? It was New York money. Bacteria have been around since the beginning of time, way before the Father of Microscopy, Van Leeuwenhoek (1632-1723), developed the microscope.
Around our house growing up mother always warned never put money in your mouth or your fingers without washing them after you've handled it. This is just another example of boring and bored media mesmerizing. The fact is bacteria preceded the media, most likely a good thing.
http://online.wsj.com/news/articles/SB10001424052702303456104579489510784385696
International politics are hardly known for their clarity. Clear as mud might be a better description given all the high jinks these players resort to. Here's an informative article on some of today's goings-on in an attempt to perhaps let peace ring out.
http://www.minyanville.com/sectors/global-markets/articles/Maybe-Putin-Did-Blink-on-Ukraine/4/21/2014/id/54655?refresh=1
Walk into any Major League Baseball park in the old days and you'd probably hear something like this: "Programs, programs! You can't tell the players without a program."
Well, if you haven't been looking you can't read the road signs either. They're at it again.
http://www.businessinsider.com/us-mortgage-lending-is-starting-to-ease-2014-4?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+businessinsider+%28Business+Insider%29
Somewhere along our path we recall seeing a sign in a chest surgeon's office that said something to the effect that nothing is more uncertain than the state of absolute certainty. From Bloomberg here's some more economic fodder for the premise that the Fed is already behind the curve.
Too many people are looking for more deflation. One side of the Good Vessel Deflation is getting crowded.
“After a slow December and January and some weather-related impact in February, we are beginning to see retail conditions improve,” Paul Toms, chief executive officer of Hooker Furniture Corp. in Martinsville, Virginia, said in an April 16 earnings call. “The overall economy seems to be more resilient and able to shake off bad news, there’s a firmer foundation under key indicators for our industry like housing, employment, the stock market and consumer confidence.”
http://www.bloomberg.com/news/2014-04-21/gain-in-u-s-leading-index-points-to-second-quarter-rebound.html
