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What The "Gambler's Fallacy" Tells Us About Where The Market Will Go next

The Dow has closed at a record high for nine days in a row, so it (and U.S. equities generally) MUST be ready for a pullback, right?  Not so fast.  Thinking that reversion to the mean happens swiftly and reliably is something called “The Gambler’s Fallacy”.  To borrow from an old capital markets aphorism, things can stay weird longer than you can stay solvent betting against them.

The 'BLM' Paradox - Black Accountability Matters

Given recent distressing killings between Blacks and police -in the past week - it is worth poring into the broad statistics that underlie homicides in this country, by race. We dejectedly note that an astonishing 4/5 of these police killed were done so by Black civilians (the same ones who are killing one another at 8x the national rate and paradoxically expecting law enforcement to stop that, but then shriek when the police do).

We've Entered An Era Of Rising Instability And Uncertainty

And there you have our future, visible in the 13th, 16th and 18th century price-revolution waves which preceded ours. It is hubris in the extreme to think we have somehow morphed into some new kind of humanity far different from those people who tore down the Bastille in a great frustrated rage at prices for energy and bread they could no longer afford.

The Cleveland Fed Wants You To Know That Its President Does Not Advocate Helicopter Money

It appears that the Cleveland Fed got an earful for ABC's report which originally disclosed Mester's "qualified support" for helicopter money (and anyone else who touched on it) and overnight we have been bombarded by emails from the same regional Fed, which urgentl want our readers to know that "Mester did not in any way advocate helicopter money."

Herbalife: Media Materially Misstates FTC Outcome, Icahn Files Potentially Questionable Statement with SEC

In the classic "pyramid" scheme, participants attempt to make money solely by recruiting new participants into the program. The hallmark of these schemes is the promise of sky-high returns in a short period of time for doing nothing other than handing over your money and getting others to do the same. But, like most news that goes out incorrectly, nobody noticed the retraction and nobody cared. Here’s what Dow Jones’ official retraction of the morning’s news looked like when it was issued later in the morning, with Herbalife stock already trading up nearly 15%

US Futures Rebound Sharply From Friday's Coup Fears, Focus Shifts To M&A

Having panciked briefly on Friday night on news of a Turkish coup, which has since not only failed but been cast away as speculation rises that it was staged and designed to give Erdogan even more authoritarian power, markets have moved on and are now focusing on the main overnight event which was the surprising $32 billion bid by Japan's SoftBank for U.K.’s semiconductor giant ARM which has sent comparable semis higher in European trading and pushing the Stoxx Europe 600 Index up by 0.6%, after surging 3.2% last week. After sliding sharply on Friday, US equity futures are up 0.1% in early trading.

U.S. Warships Surround Disputed Chinese Waters, Prepared For War: "WWIII At Stake"

Territorial disputes are a delicate thing… and potentially deadly as well. That’s why the U.S. is backing up its positions with an ever-increasing presence of warships  in the South China Sea. China is very touchy about these territories, and unwilling to give up what they perceive as their waters, even as a UN tribunal just denied their claims and strengthened the U.S. hand. Indeed, the entire situation is combustible and very dangerous.

Great Numbers! Curious Timing?

Pretend you’re running a corrupt government and something big and scary happens in another part of the world. Brexit, for instance. You’re quite naturally worried about the impact on your local economy and political system. What do you do? Well, one obvious thing would be to call the statisticians who compile your economic reports and tell them to fudge the next batch of numbers.

3 Things: Bonds, Bulls, & Central Banks

With global rates at zero to negative, money will continue to chase U.S. Treasuries for the higher yield. This will continue to push yields lower as the global economy continues to slow. What would cause this to reverse? It would require either an economic rebound as last seen in 50’s and 60’s or a complete loss of faith in the U.S. to pay its debts such as a collapse of the Government and the onset of the “zombie apocalypse.” We no longer have the drivers of manufacturing, demographics or credit expansion for the former, so I am ready for the latter.

US Futures, Global Markets Storm Higher As More Details Emerge About Japan's "Helicopter Money"

The global meltup continues with the S&P set to open at new all time highs, some 20 points higher from yesterday's close, however the driver for the latest rally is not so much the imminent BOE announcement which is expected to cut rates by 25 bps from 0.50%, but a dramatic surge in the USDJPY just after 1am Eastern when Bloomberg revealed more details about Ben Bernanke's masterplan for Japan's helicopter money.