The Most Dangerous Word In All Of Finance

There is perhaps no more dangerous word in the financial lexicon than “contained.” As a general rule, anytime someone tells you something is “contained,” it’s probably not. After all, they wouldn’t be talking about it in the first place if it were. Nothing can be truly “contained” anymore. It’s not possible in a globalized world…

Dog Days Drag On As Markets Eye Yellen Speech

“It’s the epitome of the dog days of summer,” Kent Engelke, managing director at Capitol Securities Management Inc told WSJ today, adding that “we’re all just sitting on our hands.” Indeed. Fed Vice Chair Stanley Fischer spoke in Colorado on Sunday and although the message was just as muddled as you’d expect it to be…

Looking Out For Landmines

It’s been a good run since late June. If you were in US or European equities you racked up double-digit gains. Meanwhile, we’ve got dead vol walking: And although we’ve discussed this countless times, given where we are valuations wise (i.e. stretched to the max at something like 18X for the S&P) and where we…

“Emerging” Problems? BIS Warns On $3.5 Trillion In EM USD Debt

In a column posted elsewhere earlier this week, we took a look at what rising LIBOR means for China’s currency. Essentially, Chinese corporates that borrowed in dollars post-crisis are now frantically trying to reduce their debt as the cost to service it is tied to LIBOR. Effectively, that means selling yuan to buy dollars, which,…

Talking Currencies On A Sleepy Summer Friday

Let’s talk currencies because it’s Friday and there doesn’t seem to be much else to talk about (it’s the whole summer doldrums thing). Have a look at the yen and the yield on 10-year Japanese debt: So the yen’s trading at 100 and is on a tear against the dollar. It hit 99.84 at one…

Calling Crude Prices: May The Farce Be With You

We weren’t going to write about oil again today but while perusing analyst commentary it occurred to us once again that no one has any clue whatsoever where prices are going. It’s turned into something akin to astrology at this point and it kind of goes back to something else Bloomberg’s Richard Breslow said today:…

Three Things For Thursday: Wal-Mart, Oil, ‘Dud’ley

Well, it certainly feels like summer. If it weren’t for the Fed’s increasingly schizophrenic policy banter we’re not sure there’d be much to talk about. Thankfully there are a few notables today. First off there’s Wal-Mart which is riding high Thursday after reporting its eighth consecutive quarter of rising same store sales. That may sound…

Markets Call Fed’s Bluff After Minutes Reveal Split

One of the things we’ve discussed at length in these pages of late is the extent to which markets have begun to do the opposite of what central banks intend. The latest examples include the reaction in the aussie and the kiwi following RBA and RBNZ rate cuts: Well in what feels like a replay…

Watching The Dollar As Fed Minutes Loom

As we discussed on Tuesday, the FOMC appears to be dusting off the May playbook as the NY Fed’s Bill Dudley suggested that a September hike is indeed on the table after all. Obviously that’s a pretty silly contention - they’d be out of their minds to hike before the election. Still, it was enough…

Fishing For Growth In Maine

It’s never fun to watch people lose money. That’s why we find it irksome when someone brands us “permabears.” We don’t enjoy triple-digit declines in equities and we’re not going to enjoy it when yields finally explode higher and every retail investor who owns a junk bond ETF suddenly realizes what all those pundits meant…