Category Archives: Investment outlook

Wolf Richter: Implosion of Housing Bubble 2 Hits Six Cities in the West

Last time, all that craziness was called a “housing bubble” with hindsight. This time, it’s called a “housing recovery.”

McKinsey Gives “Dare to Be Great” Speech to Private Equity Investors as Returns Fall

McKinsey has issued a new report on the private equity industry that ought to give any investor cause for pause.

Philip Pilkington: The Yield Curve and Recessions – Against US-Centricism

One of the nicest stylised facts in applied economics is that if the Fed inverts the yield curve it will cause a recession. But how applicable is it?

Wolf Richter: “It’s Not a Bubble,” Retail Investors Are Told As The Smart Money Bails Out

Even as insiders bail, brokers assure retail investors there’s nothing to worry about.

Chinese Bond Default Rattles Markets; Harbinger of More Credit Woes?

A corporate bond default should hardly be a headline dominating-event unless the default in question is of a particularly large concern, or is tightly coupled (as in could, Lehman-style, trigger more distress) or is a precursor of things to come.

Wolf Richter: The Smart Money Quietly Abandons The Housing Market

Some savvy investors were warning the single family home rental market was overheated nearly a year ago. Now it looks like more and more are realizing that party is over.

Philip Pilkington: Keynes’ Liquidity Preference Trumps Debt Deflation in 1931 and 2008

Why defining “liquidity trap” precisely matters in understanding crisis dynamics, and Keynes, and not Krugman, got it right.

Wolf Richter: Stinking Corporate Revenues, Desperately Doctored Earnings-Per-Share

Yves here. Wolf is flagging the end-game in the efforts to present US corporate earnings as being on a decent upward trajectory. The fact that Apple disclosed last week that it spent $14 billion in a two-week period buying back stock should be seen as a massive sell signal. As one of my stock jockey buddies remarked, “If the company won’t invest in its business, why should I?”

Wolf Richter: Cracks In The Tech Bubble (That Doesn’t Exist)

After having denied feverishly that any kind of bubble exists, people watch incredulously as the hot air hisses out of the very bubble whose existence they’re still denying. And afterwards, everyone had seen it coming. Because cracks had been visible for a long time.

One of the cracks is Twitter.

Market Rout Continues, Proving Abject Failure of Fed’s Forecasts and Policies (Updated)

In case you missed it, it’s ugly out there. US markets swooned as an unexpectedly weak manufacturing report, the ISM, was so bad it couldn’t be attributed solely to bad weather and deepened investor funk.

Emerging Markets Contagion Starting to Hit Eurozone

Emerging markets-related disruption continued overnight, as the Nikkei fell nearly 2%, pounded by the rise in the yen due to its status as a flight currency. Other Asian markets took a hit as well, with only Australia emerging relatively unscathed.

George Mangus Warns of Broad Impact of Emerging Markets Turbulence

In the runup to the global financial crisis, George Magnus, who was then chief economist at UBS, was one of the most insightful commentators and was early to call how bad things might get. He’s back to sound alarms about the emerging markets turmoil.

Mr. Market is Getting Frazzled Over the Fed’s Neglect of Its Pet Wishes

A brief surge of optimism, in the form of a short-lived rally in the belegured Turkish Lira and South African rand after their central banks raised interest rates to try to halt the plunge in currency values, has fizzled. And the Fed reducing its dosage of market tonic, in the form of QE, only soured investors’ already bad mood.

The Emerging Markets Rout Abates….for Now

Journalists and laypeople tend to use stock markets at their proxy for economic and financial market conditions. The performance of US stock markets looked like an encouraging return to a semblance of normalcy after last week’s squall, until a wave of selling in the final hour, with 600 million shares of volume, pushed the major indexes solidly into negative territory. As of this writing, that barometer is still a bit wobbly. Australia was down 1.26% overnight and the Nikkei off .17%. But Chinese and the Singapore markets are up, as are European and the S&P and DJIA indices.

But some of the explanations are less persuasive than others.

Will China Stop Taper?

That is the question today. Let’s first ask markets.