Tyler Durden

Weekend Reading: The Fed Loses Control (And What Comes Next)

The BEA has just announced they will trim 2% off of GDP next month. Of course, this explains why many of the numbers just “didn’t add up.” Importantly, the current decline in corporate profits and collapse in return on equity suggest the current economic backdrop is far weaker than currently reported. Next year’s negative revisions to GDP will reveal this to be the case and that a recession will likely have started in the latter half of this year.

Weekend Reading: Intelligent Asininity

The current market process certainly seems far more similar to the 60-70’s than most people would like to admit. The only question is how long will it take for the “intelligent asininity” of the bullish proletariat to finally wear thin.

Weekend Reading: Yellen’s Line In The Sand

The central bank already missed the “window of opportunity” for normalizing rates in a manner that doesn’t hamper the recovery. While the big news for the market was the release of the April 27th FOMC minutes which once again suggested the Federal Reserve may be on a path to hike rates sooner rather than later. The reality is simple, with the markets hovering on critical support, a Presidential election just around the corner and no real evidence of economic recovery, the likelihood of a rate hike in June is approaching zero.

Knave Dave's picture

Irrational market exuberance hits its zenith after Doha talks fail as oil prices rise, instead of fall, because of minor Kuwait oil strike, then stay up after the strike fails within a day, then rise more when Saudis promise to retaliate with more production and stay up when Russians promise to retailiate with still more production.

Weekend Reading: It's Probably A Trap

The “bullish case” is currently built primarily on “hope.” Hope the economy will improve in the second half of the year; Hope that earnings will improve in the second half of the year; Hope that oil prices will trade higher even as supply remains elevated; Hope the Fed will not raise interest rates this year; Hope that global Central Banks will “keep on keepin’ on.”  Hope that the US Dollar doesn’t rise; Hope that interest rates remain low; Hope that high-yield credit markets remain stable.

Weekend Reading: Sagacious Discombobulation

So what do you do? Play the short-term chase the market game or the longer-term wealth devastation game. The choice is yours to make, the consequences will be for all to share. “I will tell you my secret: I never buy at the bottom and I always sell too soon.” – Baron Nathan Rothschild

Weekend Reading: The Fourth Turning

“The typical investor has usually gathered a good deal of half-truths, misconceptions, and just plain bunk about successful investing.” With the month of April winding up the seasonally strong time of the year, earnings season just ahead and economic growth weak, the risks to the downside far outweigh “hope” of higher prices.  Or, is “bad news” still the bear market deterrent?