Rate of Change

3 Things: Exuberance, Small Caps, & 6% Realities

"...there is a long way to go between President-elect taking office, drafting bills and getting them passed. There is even a further period of time before any actions actually passed by the Trump administration actually create perceivable effects within the broader economy. In the meantime, there are many concerns, from a technical perspective, that must be recognized within the current market environment."

How Far Can Bond Yields Rise Before Hurting Equities? Goldman Answers

"... we believe that the equity market is still at a level that can cope with moderately rising bond yields. We estimate that a rise in US bond yields above 2.75% or probably between 0.75-1% in Germany would create a more serious problem for equity markets: at that point we would expect that any further rises in yields from there would be a negative for stock returns." - Goldman Sachs

The Bull Giveth, The Bear Taketh, & You’re Not Passive

Speculators often prosper through ignorance; it is a cliché that in a roaring bull market knowledge is superfluous and experience a handicap. But the typical experience of the speculator is one of temporary profit and ultimate loss.

Like Everything Else, History Repeats (Almost Exactly) Because Power Truly Corrupts

The FOMC has no idea what it is doing, just like Bank of Japan officials about a decade before them. Rather than learn from all the experimentation, the power and prestige still, somehow, afforded to all of them is just too much to give up. They would clearly rather keep themselves on top of the political power structure as it relates to the economy than to admit what is increasingly obvious (a second time).

Why The Fed Will Never Reduce Its $4.5 Trillion Balance Sheet Again

While policymakers have maintained the Fed should eventually reduce its bond holdings, Lockhart said some officials were closer to accepting that they needed to learn to live with them. "I suspect there are colleagues who are contemplating at least maybe a statically large balance sheet is just going to be a fact of life and be central to the toolkit," he said. Most now agree with him.

"This Ain't Rocket Science Folks" - Fundamentals Matter (And Will Always Matter)

We can pretend fundamentals don’t matter and sure in the day to day profit taking of Citadel and the like they really don’t matter. But, while the PhDs may talk big about this new world economy where a move to universal welfare means jobs and wages don’t matter - well that is nonsense. Jobs and wages matter and they will always matter.

"Trouble In Paradise" - Hopes Of Economic Growth Just Took A Beating

The ongoing misinterpretation and massaging of economic data to spin a positive view on the economy are fine and good. However, real economic recovery must start with the average American since consumption makes up nearly 70% of economic growth. While the current Administration and Federal Reserve promote policies that are supposed to create economic prosperity for all, the reality is that remains bottled up on Wall Street.

Insanity, Oddities, And Dark Clouds In Credit-Land

Distortions in financial markets keep growing, as central banks all over the world are desperately intensifying monetary pumping. What is currently happening in various bond markets as a result of this and other interventions is simply jaw-dropping insanity. It is not so much that it defies rational explanation – in fact, all of these moves can be explained. What makes the situation so troubling is the fact that investors seem to be oblivious to the enormous risks they are taking.  They are sitting on a powder keg.

Job Opening Rise As Hiring Rebounds After Sharp Drop; Number Of Workers Quitting Drop

Moments ago the BLS reported Janet Yellen's favorite labor market indicator, the JOLTS survey, which showed that in June (recall this report is 1 month delayed to the payrolls report), the number of job opening rebounded from a revised 5.514 million to 5.624 million, modestly missing expectations of 5.675 million largely in line with the range.