Here’s a likely model for the US economy during the next couple of years. From Wikipedia: “The Kübler-Ross model, commonly known as the five stages of grief, was first introduced by Elisabeth Kübler-Ross in her 1969 book, On Death and Dying.“
Denial – “I feel fine.”; “This can’t be happening, not to me.”
Denial is usually only a temporary defense for [...]
Last week some old comrades-in-arms from the financial industry turned up in New York from their present haunts in Europe and Asia; at the end of the week we all found ourselves on the deck of a beach house in the Hamptons, watching a nearly-full moon and a luminescent Venus migrate together slowly from left [...]
In February I summarized why the US economy would not recover, just when the market was getting bulled up and a stream of suspect numbers appeared to indicate that the economy would right itself. These were (in summary):
Dave’s February Top Ten Reasons to Fade the Recovery
10) There is no recovery at all in Europe.
9) China [...]
In the crudest version of the dividend discount model, the stock price P is a function of earnings and the discount rate, such that P = E/r. That this is an inadequate model goes without saying, but it is not entirely misleading for comparative statistics in a short time horizon.
Below I present a simple analysis [...]
Asia Times Online’s editor Allen Quicke died earlier this week. He was only 57. It is a great loss for journalism, and greater for those of us who knew him. Baruch dayan ha-emet.
Bloomberg today reports that the first rise in CPI in four months has reduced fears of deflation. This is silly. Between 2000 and 2008, the Federal Reserve ignored the bubble in home prices because rents failed to rise, and CPI measures rent (or home rental equivalent) rather than home prices. Now that home prices have [...]
The subject: is there a bond bubble?
My answer: No, and the maturity to buy is 30 years.
http://www.cnbc.com/id/15840232?video=1564529110&play=1
There just isn’t anything more for banks to do, except clip the threadbare coupons on leftover structured product (which already is too rich). They can’t make business loans, they can’t write mortgages, and now they can’t even play the carry trade in Treasuries.
In the midst of the biggest Treasury rally in a long time, banks [...]
Last night on Larry Kudlow’s show, the question was: how will the market react to the Fed? I didn’t think what the Fed did mattered much at this stage in the game. The issue is, rather: how does an 8% “earnings yield” on the S&P stack up against a 2.8% yield on Treasuries (or, if [...]
…and here’s the video link:
http://www.cnbc.com/id/15840232?video=1562865433&play=1