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"It's The Dollar, Stupid"
Still think fundamentals matter? Still believe your analysis of Free-Cash-Flow, energy policy, or P/E multiples will payoff? Think again... according to our Gavekal Capital's Factor Scoring Model, the US dollar has been the most highly correlated factor (out of 30) with the MSCI World Index over the past year (which is why we have been focusing so much of our attention on it over the past few months). It has had a 0.98 correlation with the MSCI World Index.
Still wonder why USDJPY is so critical to stock prices? It's all about the USD flows...
And if the USD keeps strengthening, then history suggests that imported deflation comes America's way quickly...
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Cash is King...baby babay!
(Edit..goes without saying that I support a strong US dollar, benjamins son)
Depends on whose cash you are referring to. Times, they are a changing.
I'm importing deflation like a mad man right now. I've cut my USD pricing to N. American customers on the used heavy construction equipment I import from Europe by 10% in the past 6 months, due to nothing but EURUSD moves ... and thanking God I was able to make those price cuts in order keep making sales into the VERY low demand US market.
This is the whole problem with using CPI to track "growth" .... the "deflation" I'm importing has nothing to do with a contracting credit or money supply or US economics and actually helps US business profit margins.
What's a dollar? Go mine for gold TODAY!
https://www.youtube.com/watch?v=Od9D6TECSa0
Yes, it was about the dollar, it is about the dollar and it will be about the dollar.
No USD as world currency = No USA
It is that simple
And no, USDJPY has got nothing to do with it. USDJPY is a reflection of USD extinguishing/hoarding under way from the Fed and its partners, not the cause.
and you think the MIC we let that happen ?
No.
I think MIC would go into an assassination rampage to prevent that from happening, after many, many, many warnings given first.
I think we are at the end phase of warnings. Lots of "suicides" have occurred.
I think bank lobby is surrendering, otherwise we'd have seen assassinations.
My view, of course
Looks like the bankers are winning from where I look EKM..
Another banker bitch nominated as USAG.
I wish I saw what you are seeing.
It's not that hard to see!
Think control
Think Global control
Think giving control (Global Control) to one entity
"No USD as world currency = No USA"
I see that as being the goal as China now owns the USSA.
And this is how the world reserve currency lets you take over the world.
Mr. Triffin had a few thoughts on this topic...
Just like the Brittle Pound
The Euro is poised for a killer rally. King EURO
T-Bill yield a lowly 0.36 correlation, and T-Bond 0.63.
The correlation here of 0.98 reminds me of FED liquidity and U.S. equities at 0.98 correlation.
Mo Money ... Mo Problems
No money....Mo problems too.
That must be why AU and AG keep going down. And will likely go down some more.
Alas, so have Wages in the last 10+ years, relative to the Real Cost of Living.
p.s. Note however that other ratios make good Correlation factors. E.g., Sales Forecasts, P/B and EPS Growth. As long as Execs can keep plowing profits back into buying up company shares, those stock prices will stay aloft and those bonuses will keep coming for Execs and Wall St. The "Wealth Redistricting" (redistribution) just keeps going. For now.
Alas, Wall St Bulls keep front-running and over-running Doomsday Bears. Maybe that's because it's financially and personally more rewarding to dwell on "How can I make money on...?" than to dwell on "When will the world end?"
I think the stock market rise is because of global warming. It is getting so warm now that Minnisota had the coldest records set all the way back to 1898. If it gets any warmer the upper half of the US will be covered in a 1,500 foot ice sheet.within the next 50 years. This will cause the FEDs software to run at twice the speed and we will all be rich and preserved in ice.
You spelled Minnesoda wrong.
damn glowbull wurming is starting to go for the brains
In addition to manipulation by the government-financial complex other forces are converging to further distort and disconnect Wall Street from the American economy. Why American equities continue to rise is very important, more is at force here than the usual causes which might include a pre-election and post-election rally. This is more than the continuation of a double down and let it ride mentality that has been ratcheting the market higher while reenforced by media hype.
Most analysts agree that money from countries with weakening currencies is flowing out of the troubled areas and the U.S. is receiving most of the benefit. The Japanese as well as many Chinese and Europeans know with so much money floating around and few safe harbors America is becoming the most comfortable option for temporary investing their money. More on why this should be viewed as a sign of instability rather than a reason to celebrate in the article below.
http://brucewilds.blogspot.com/2014/11/why-american-equities-are-rising.html
In the end the strong dollar will be the final undoing. Overseas economies especially emerging are unwinding. Oil down, metals down, currencies imploding. The rats are leaving the sinking ship. All of this will crush US earnings. In my mind, the only question is can companies buy back their shares fast enough to make up for the drop in E? I don't think so. The dollar rally could be massive. Treasury yields will reach new, never before seen, lows.
Sorry, but is this the correlation of the past few months? What the hell does that mean. Just a few years ago a strong dollar was akin to risk aversion if not fears of an implosion. Give it a year or so (at best) and the current "isolasionist" minded butt-heads will be crying for a weaker dollar. What will the correlation look like then?
You are correct. The markets should be moving lower on a strong dollar, not higher. But then again, if the largest buyers of US stocks are corporations completely desperate to increase earnings per share the stock market may not be the best indicator of current or future value.
here's one for ya.
100 billion has left pimco with bill gross.
only 1% has followed bill to be re-invested at janus.
drum roll........................
where did the other 99% end up going???????
Can you imagine what would happen right now- if a forced gold audit- showed reduced holdings or no gold at all? Just the thought of it makes me tingly.
zh for years has told us the dollar will die they had good reason to think so because the fed has tried to kill it but the fed will fail the dollar will thrive zh & you pm lovers will be proved wrong