Archive - Aug 2010 - Blog entry

August 30th

Chris Pavese's picture

The “Sunshine Pumper Strategists” are out in full force today, with earnings yields on stocks spiking higher than those available on bonds. So we were pleased to see that Ron Griess at The Chart Store provided us with a couple of charts this morning that illustrate this relationship (or lack thereof) over time. Ron’s long term perspective is critically important here, as any monkey can easily pick out a few bananas that accurately predict the market at any given moment in time.

Phoenix Capital Research's picture

Last week I mentioned that barring any additional intervention (monetary or otherwise) stocks would roll over. That is precisely what happened with the S&P 500 falling to test MAJOR support around 1,040 twice.

We looked about read to fall off a cliff until Friday when Fed Chairman Ben Bernanke stated in his speech that the Fed stands ready to do whatever is needed to fight the financial crisis. It wasn’t a direct monetary intervention, but in these desperate times verbal intervention is good enough, and traders gunned the S&P 500 higher back into the gap created by the Monday/Tuesday sell-off.

smartknowledgeu's picture

Financial shills often use the term “bubble” to conjure up images of imminent collapse. Thus, if the “bubble” doesn’t burst within two weeks of someone’s “bubble” proclamation, then this non-event provides loads of verbal ammunition for the financial shills to improperly validate their erroneous viewpoint that a bubble does not exist. And this guerilla tactic works for those that truly don't understand the definition of a Central Bank, artificially engineered "bubble."

August 29th

madhedgefundtrader's picture

Today, “bond funds” ranked with “Miss Universe” and “Lindsey Lohan” among Yahoo’s top ten search terms. Outflows from equity mutual funds over the last two years totaled $232 billion, while inflows into bond funds soared to a staggering $559 billion. The last time yields were this low in 1955, ten year bonds brought in an annual return of only 1.9% for the following decade. Are the Chinese calling the top in the market? (TBT), (TMV), (TIPS)

rc whalen's picture

While many economists are worried about whether or not the Fed should increase quantitative easing, my concern has been and remains the toxic effect of the Fed’s intervention on what remains of the private financial markets. Fed officials and members of the Obama Administration wring their hands over individuals and companies saving too much, but perhaps they should ask why. It starts with zero interest rate policy.

August 28th