Netflix: Tech Boom 2.0

            It is always important to invest with the macroeconomic back drop in mind. However, this concept is actually hurting investors this year. In fact, not only is economic weakness not being priced into the market, but individual earnings reports aren’t mattering either. Capitalism cannot work when there is no cost of capital. Investors begin…

When Will The Monetary Madness End?

            The U.S. economy is in an interesting situation. The manufacturing economy started weakening in 2014. Industrial production has declined for 13 straight months which is the longest streak outside of a recession ever. Earnings peaked in 2015 and have been declining ever since. Both the Russell 2000 and the NYSE peaked in 2015. All…

Will Politics Kill World Trade?

Terrorism and the influx of refugees fleeing the war-torn Mid-East for Western Europe have triggered a revitalization of nationalistic sentiment among the electorate, a phenomenon Donald Trump has used as a veritable springboard on the way to winning the GOP presidential nomination. But the populist shift has also served as a drag on global trade…

Check Your Money Markets: Reform Kicked In On Friday

If you’re in a prime money market fund and you don’t know what happened today, you need to read up. On Friday, new rules went into effect that will require prime funds to report a floating net asset value and would, in some cases, allow funds to gate investors. For anyone who may be unaware,…

Friday Recap: Bank Earnings, China PPI, Yellen

It looks like we’re going to head into the weekend on an upbeat note thanks largely to, i) bank earnings, and ii) China PPI. Below, find a bit of Street commentary on results from JPMorgan, Citi, and Wells Fargo courtesy of Bloomberg: From Goldman’s Richard Ramsden: JPM Strong FICC rev. drives beat Total rev. outperformance…

Why One Trader Is Wrong About China

We were meandering around thinking about something else to write about this afternoon without picking on China trade data again when we ran across this missive from Bloomberg’s Mark Cudmore (and this is the full text): The China doom-mongers don’t seem to have updated their models since January. Even allowing for today’s disappointing trade data,…

The Biggest Story Of The Day: Chinese Trade Disappointment

We’re not entirely sure why anyone is surprised to see these numbers anymore and it’s not like they weren’t telegraphed earlier this week, but whatever the case, Wall Street isn’t liking the latest trade data out of China. The breakdown is pretty simple. It missed. All of it. Here’s the long and - more appropriately…

Fed Minutes Betray Clueless Policymakers

Why do we even bother sharing the Fed meeting minutes? Do you ever wonder that? They didn’t hike rates. That’s it. Now you’re going to scour the tea leaves (the ones they report) for clues about November and December? Give us a break. They aren’t going to hike in November around an election. That would…

Nervousness Lingers Over Fed Minutes Amid Thai Turmoil, Yuan Weakening

So Wednesday is interesting thus far. There’s trouble in Thailand where the aging king combined with generalized angst about the prospects for another taper tantrum have thrown the baht for a decisive loop: Meanwhile, Thai stocks fell as much as 6% and are down more than 7% since last week. “The only thing that has…

“These Dudes Will Never Identify An Asset Bubble - At Least Before The Event!”

The title is from SocGen’s incorrigible “permabear” Albert Edwards who is out with an interesting note on the current state of corporate balance sheets (among other things). Here’s one chart that stuck out to us: (Chart: SocGen) What that shows is that the despite the hunt for yield that’s driven interest rates into the ground,…