Category Archives: Investment outlook

Wolf Richter: Moody’s Explains Why Junk Bonds Will Sink Stocks Further

Why the high risk spreads in the junk bond market bode ill for the stock market.

Bloomberg Spotlights Poor Private Equity Returns From Last “Peak of Cycle” Mega Deals

Buying at the peak rarely works out, as private equity’s pre-crisis mega deals confirm. Yet general partners fared really well.

The World Is Not Running Out Of Storage Space For Oil

The implications of the fact that there is still more oil storage capacity for prices.

Funds Hold Most Cash Since GFC

Fund manager cash holdings are at crisis-bottom levels, typically a sound bullish indicator. But will history predict the future this time?

US Oil Futures Plunge by Nearly 7%, to $26.55 a Barrel; Stocks Swoon

Oil has ratcheted down again and stocks are getting hammered.

Investment Manager GMO Debunks Mythology of “Sound Finance,” or Deficit Hawkery

Yves here. Sometimes it is best to let things speak for themselves. In that spirit, I am embedding a very important paper by the well-respected investment management firm GMO which debunks the tenets of “sound finance,” meaning the claim that governments need to balance their budgets. I expect to be referring to it regularly, particularly […]

Edward Lambert: Forecasting the Stock Market thru Effective Demand

Dave here. The markets have taken a beating in 2016, and while the fallacy of thinking the market=the economy seems like an oversimplification, this post provides a competing viewpoint that, without taking a position in affirmation or dissent, I thought I would offer up for discussion. For some background, you can read Edward’s other posts […]

Marshall Auerback: What US Treasury Yields Might Be Signalling

Bond yields warn of deflation. How real is this worry?

Wolf Richter: Welcome to 2016! With Just a Touch of Mayhem for Stocks

Stocks took a beating around the globe on the first day back in 2016. Hopes of a better year start out inauspiciously.

Wolf Richter: “Distress” in US Corporate Debt Spikes to 2009 Level

Experts expected bankruptcies of highly levered borrowers in 2013-2014, but cheap refis under ZIRP bailed them out. We are again at peak leverage, but this time, there’s no prospect of lower rates to provide a rescue.

Wolf Richter: Debt Fueled Stock Buybacks Now Eating into Earnings

Companies with investment-grade credit ratings – the cream-of-the-crop “high-grade” corporate borrowers – have gorged on borrowed money. Interest on that mountain of debt, which grew another 4% in the second quarter, is now eating their earnings like never before.

Frances Coppola: The Great Yield Divergence

Puzzling over the Great Divergence of real and nominal yields. Ever since the Great Depression, nominal yields have been persistently above real yields Yet in the previous 200 years, despite periods of fiat currency and high inflation, real and nominal yields didn’t diverge. Why do they now?