May 2011 Monthly Archive

Foiled again euro bears by the observer-expectancy effect! Ouch!

Ugh…just when it looked safe to short the euro for all its worth, Mr. Market draws a line in the sand at 1.40, and optimism over another bailout reigns down on the bears. Ouch! We ignore Willy at our peril. Read more

Questions on Goldman’s Commodities Call

I was thinking how nice it would be to have an investment position distribution machine as powerful as Goldman Sachs. Besides the fact they see many of the positions of other traders in so many different markets thanks to their lofty perch, they can also rely on Bloomberg, CNBC, and The Wall Street Journal to help them unload and/or drive up the value of their inventory. Read more

Go long – they’re talking their book at the OECD

The Organization for Economic Cooperation and Development. Here we are debating whether or not the Federal Reserve will follow the departure of QE with the commencement of QE3 or something similar. Read more

Danger Will Robinson! An all-one-market-monster on the radar!

If you have kids or parents, you understand all too well that you can run from your genetics but you can’t hide. It seems portfolio managers who preach the good news of diversification have neither kids nor parents, which might explain a whole lot about their behavior. Read more

The fat lady is stepping onto the stage

My apologies to Casey, but his quote above seems a fitting analogy for what is playing out in the eurozone. Read more

What does inflation look like? Same question. Different answer.

I was listening to a Reuters interview with David Bloom of HSBC where he revisited an idea he said was already recently posed on Reuters Read more

When it rains, will it pour?

I guess planning crops has become rather tough when you can’t predict whether a rainfall will bring 6 inches or 60 inches. Actually, I know nothing about the rainfall amounts of monsoons – I stopped trying to predict them long ago for obvious reasons. Read more

Demand elusivity.

Keynesian economics are known for encouraging government and public sector involvement to help smooth out rough patches in the business cycle. In the wake of the 2008 financial crisis, central bankers and global policy-makers adopted a Keynesian tilt in their responses. Read more

If markets follow mood, watch out below!

We are told Germany is booming. If so, why aren’t its consumers happier? We are told by analysts the US economy is growing and global growth is on track, and likely to weather any surprises. Read more

What’s all this talk about deflation?

Have the deflationists not heard about quantitative easing? What about the Fed’s printing presses? What about rising commodity prices? What about the collapsing US dollar? Read more

Corn dogged.

Boy, when wheat was surging higher early this week, bouncing back from some heavy selling last week, it sure looked like lingering weather problems were a lock for higher prices. Read more

Some rationales for a deeper commodities correction

There seems to be a scramble afoot to define exactly why commodities plunged across the board the other day. Some blame a big trader, others the six-planet alignment, and many point to concern China is slowing. Read more

OMG: Oh my, Gold!

That sure didn’t take long. Gold pulls back to $1,500 and we’re already asking whether it is a bubble on the verge of popping. Read more

Maybe it’s time for Mr. Market to do some Darwinian Winnowing!

I got call yesterday afternoon from a very seasoned player in the world of finance. He is a man that has seen it all, many of these cycles again and again. He knows, or has worked, or has rubbed elbows, with the biggest names in the industry. Read more

Running for the exits of ephemeral fundamental expectations!

Earlier in the year when JR and I did our “Best Guess” Issue for 2011, aka our “Forecast” Issue, we talked about the key linkages in the global economy; I shared these again during my most recent webinar sponsored by Mirus Futures and CME. I think it still works well as a framework … Read more

Eurozone periphery: If this is success I’d hate to see failure!

As I was perusing the very fine library of what Reuters calls its “eurozone crises graphs” I ran across this on yesterday and shared it with our Members. At no point in time while viewing anything on this graph did I think of “favorable or desired outcome” or “the attainment of wealth.” Read more

Let’s get real and Fire the Fed!

Is the word “gutless” too harsh a description of the FOMC members? Or maybe I have it completely wrong, as it takes guts to take such a haphazard leap into monetary experimentation at such a critical time for the US and global economy. Read more