The temporary pause in the long bond bull may be close to over. While phase one of the recovery proved that fiscally supported incomes can fuel spending on goods, we shouldn’t fall for looking backward to see what's happening now and in front of us. Phase two of the recovery is significantly slower, with muted … Continue reading Where do we go from here
Increasing public sector debt can be misleading because it can still rise during deflation. Private sector debt is where the real focus should be and private sector debt, it is true, has also expanded this year as corporates have sought to shore up balance sheets and extend debt maturities in an effort to survive the … Continue reading Debt deflation?
The U.S. has low inflation combined with monetary and fiscal stimulus which has led to a bubble in stocks. This occurred in December of 2017, followed by a near 20% decline just two months later. We saw it again in February of this year. With overly confident investors, the risk of a decline is extreme..As … Continue reading Market Highs and Herding
The U.S. lost 21.2 million jobs in March and April and has now gained bacl< 12.3 million or 58% of the total lost. One item that rose was average weeks unemployed which rose to 21.2 weeks from 20.7 weeks. The total number unemployed for 27 weeks or more rose to 3,556 thousand, up from 2,405 … Continue reading Demand and Deflation Watch
Commonly, a security or a market gets costly because of sound fundamentals promoting a positive mood and a definite upswing. The valuation inevitably becomes overextended, estimation turns out to be excessively bullish, and momentum starts to melt away. The pattern reverses. Sentiment will begin to turn as the pattern rotates down. Momentum will generally top … Continue reading Losing Steam
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