Commodity Trade Mantra

Posts Tagged ‘Stock Prices’

A Stock Market Correction Has Only Been Postponed, Not Avoided

Markets are relieved that the Fed won’t hike rates in March. But, the markets are never satisfied. Getting stock market expectations aligned with the intended FOMC policy path will not be pretty. Expect higher volatility and stock market drawdowns in April and May as markets reprice. A further stock market correction has been postponed, but not avoided.

WTI #CrudeOil now -0.5% from +4.5%

Whatever ultimately the case, this has never been about oil prices except that they are the most visible and straddling indication between finance and economy; the money supply attempting a rebalancing in reverse of leverage that once dominated everything but no longer can fix to even slightly stable fashion. It is the representation of the structure behind the seeming cyclical.

Why Gold is Good and Sovereign Debt is Bad

It is easy to create debt – central banks “print” currencies by BORROWING those currencies into existence. Debt increases, currency in circulation increases, and until it crashes, life is good for the financial and political elite. But debt increasing 60 times more rapidly than gold indicates that debt is growing too rapidly and due for a reset.

Equity Markets and the Credit Contraction

Macroeconomic policy is centred on ensuring that bank credit grows continually, so since the Lehman crisis any tendency for bank credit to contract has been offset by central banks creating money. The bald fact that equity markets have now lost upside momentum and appear to be at risk of a self-feeding collapse will be viewed by central bankers with increasing alarm.

The Fed Is Bluffing... Interest Rates Won't Rise in 2015

The minutes of the most recent Fed meeting showed Yellen and team still won’t pull the trigger on interest rates hike until certain unspecified conditions are met. Well, guess what… Conditions will never be met. Commodities are plumbing record lows – most notably oil and “Dr. Copper,” widely seen to signal a deteriorating economy worldwide. That’s why Ms. Yellen is reluctant to raise rates.

Currency Devaluation Coming Soon To China

Keep your eye on the market & listen. The global trend in stock prices is still bullish. The market doesn’t yet see any reason to panic over these big picture forces that are playing out under the surface. We’re going through a mild correction but not enough to turn the market bearish. A Chinese currency devaluation might change that but it could still be a year or so away.

Interest Rates Have Nowhere To Go But Up?

Currently, there are few economic tailwinds prevalent that could sustain a move higher in interest rates. The reason is the higher interest reduces the flow of capital within the economy. For an economy that remains dependent on the generosity of Central Bankers, rising rates are not the outcome that “stock market bulls” want.

Central Banks are Not Innocent Bystanders

Central banks don’t raise or lower interest rates randomly, like fluctuations in temperature. Their expectations of overheating cause higher rates, and their expectations of recessions cause lower rates. But central banks can’t tame the storms they raise. So is it that interest rates are relatively innocent bystanders in the business cycle?

Beware the Money Illusion Coming to Destroy Your Wealth

The money illusion is a tendency of individuals to confuse real and nominal prices. The impact of money illusion is not limited to wages and prices. Central bankers use money illusion to transfer wealth from you — a saver and investor — to debtors. They do this when the economy isn’t growing because there’s too much debt.

Don't Fear Rising Interest Rates? Really?

There has been much commentary published as of late discussing when the Federal Reserve will begin raising interest rates. Generally, attached to the heels of that discussion, are comments suggesting that investors have nothing to fear from such an event. However, is that really the case? Let’s take a look.

Why Using Debt To Buyback Stock Is Great And Much More

Everyone is focusing on strategy of bloating any available company with massive leverage to either buyback stock or engage in “synergy-creating” M&A, which is affectionately known as “activism.” Massive leverage is great for shareholders but a disaster waiting to happen for employees & bondholders in the future as soon as rates rise.

Financial Markets - How Effective Have The Fed's QE Programs Been?

The rise & gains in the financial markets have come at a time when corporate profits are slowing; economic growth remains weak and geopolitical tensions have been on the rise. This is solely due to the Federal Reserve’s ongoing liquidity injections into the financial markets. How this all ends is really anyone’s guess.

We Are So Not Prepared For Another Oil Shock

Once debt reaches a certain level, oil can be $10 a barrel or $200, and either way we’re in trouble. There are other possible consequences of a major Middle East war, but the more leveraged a system is, the more vulnerable it is to external shocks. And no one has ever been as leveraged as we are right now.

Is Copper Foreshadowing A Stock Market Crash Just Like It Did In 2008?

Traditionally, “Dr. Copper” has been a very accurate indicator of where the global economy is heading next. For example, back in 2008 the price of copper dropped from nearly $4.00 to under $1.50 in just a matter of months. Is the price of copper trying to tell us something AGAIN?

10 Warnings Signs Of Stock Market Exuberance

Despite the repeated warning signs, the next stock market correction will leave investors devastated looking to point blame at everyone other than themselves. The question will simply be “why no one saw it coming?” When it occurs, we simply refuse to accept responsibility for the consequences.

A Respectful Disagreement With Warren Buffett About America

Warren Buffet sees a different America than I do and untold millions of people do too. I think if we all had the special privilege, access & benefit that Warren Buffett enjoys, we too would all be jumping for joy about America. But Uncle Warren lives in a different America – the America of the past.

Will The Fed's Massive Money Creation End In Inflation Or Depression?

The Fed’s massive money creation could go either way, which is potentially confusing. Till it stokes demand, it could lead to inflation. If it increases an already heavy debt burden, it could lead to recession, joblessness, and depression. Or it could lead first to the one and then to the other.

Federal Reserve Overstepped Bounds With Monetary Policy

The Federal Reserve has caused more damage by creating a short-term bubble that is unsustainable on its own, and has set the stage for future ad-hoc interventionist asset purchases in markets on equally subjectivist timeframes and justification!

Sure Signs Of Nearing The Peak Of A Massive Stock Market Bubble

A bubble is always the biggest right before it bursts and here are some sure signs that we are near the peak of an absolutely massive stock market bubble – Nobody knows for sure when, but without a doubt this irrational financial bubble will burst at some point soon.

follow us

markets snapshot


Market Quotes are powered by Investing.com India

live commodity prices


Commodities are powered by Investing.com India

our latest tweets

follow us on facebook