Poor Data: Weak Economy?
The Dow has fallen two days in a row for the first time since the election as negative data was able to temporarily stop the Dow from reaching the much heralded 20,000 level. It’s quite amusing to see the media and traders get disappointed from such a meaningless number not being reached. I think the […]
Monte Dei Paschi The Zombie
The day the zombie bank Monte Dei Paschi is rescued is finally upon us. The bank tried to raise 5 billion Euros through the private market, but failed. The bondholders’ debt for equity swap only netted the bank 2.45 billion Euros. The Qatar sovereign wealth fund decided not to make a 1 billion Euro investment […]
Should You Sell Stocks Now?
In this article, I will further specify the level of bullishness in the market which, I feel, doesn’t represent reality. It has made sense to be bearish this year, but logic doesn’t matter when your contrarian portfolio has had a bad year. It doesn’t give you any solace. I have been wrong all year long. […]
Italian Bank Update
Italy is coming closer to the inevitable government bailout of the world’s oldest bank Monte Dei Paschi. The situation was always bound to happen at some point, but the actual nationalization process could start in the next few days. I mocked the possible loophole on how the Italian government will be able to bailout Pasche […]
Predictions For 2017
Predictions are tough to make. They are especially difficult with central banks manipulating asset prices. Excess liquidity does wonders to stocks no matter what the individual company’s fundamentals looks like. That being said, I still want to make some predictions in this article for 2017. They may not be more accurate than the typical punditry, […]
Buybacks Down, Optimism Up
The equities market has rallied on the anticipation of the Dow hitting 20,000. It’s an irrelevant factor for fundamental investors, but it matters to traders who look to push the market higher. The market has looked to push higher since the election as momentum reigns supreme. It’s a weird concept to say that the market […]
Italy Kicks The Can
This week Monte Dei Paschi, the weakest Italian bank, is under renewed scrutiny because it still needs to raise money to recapitalize and get rid of 28 billion Euros in bad loans it has. The reason why I focus on this issue is because of the two risks in play. The first is the potential […]
Trump Optimism Shown In Markit Index
As the year ends, not much looks to be changing in the markets as volumes decrease and data points become less frequent. The prognosticators have made their picks for another bullish year in 2017 even though stocks are at near record high valuations. We are in ‘wait and see mode’ on whether the optimism is […]
2017 Will Be Like 2016
The optimism about earnings and the economy heading into this year is higher than last year even though the Fed is more cautious. The Fed expected 2.4% growth in 2016. This likely won’t be met looking at the numbers which have come in so far. For 2017 the expectation is for 2.1% growth. There isn’t […]
Currency Jenga Game
The game has changed ever since Trump was elected and inflation started to pick up. This is a risky proposition because the system is unstable. The only reason why it looks stable today because central banks are doing everything in their power to make it look good. However, this very action is what makes it […]