Muni Bonds Collapsing; Are Treasuries Next? [View article]
This remains a very important segment of the bond market to watch from a signaling standpoint. States are financially in trouble across the board. While the media is focused on Ireland and further debt problems in Europe, the real story may be here in the U.S. with the way muni yields have spiked higher.
No indicator should be used in isolation. How is the track record when combined with investor bullish sentiment also reaching extremes? In other words, if the AAII investor sentiment survey is extremely bullish at the same time mutual fund cash levels are reaching record lows, could this be a high probability warning of an impending decline?
Europe as the Commodity Correction Catalyst [View article]
Looks like I was a bit early when I published the article about how this resembles the lead up to the May correction (seekingalpha.com/artic...). The correction, should it occur here, looks to be truly focused on commodities. History doesn't repeat, but it certainly rhymes!
Europe as the Commodity Correction Catalyst [View article]
Much appreciated on the comments here - looking at the way Cotton, Silver, and Sugar are behaving indicates a mini-crash is occurring in certain commodities. Looking at Municipal bond ETFs such as TFI and MUB indicates there is serious fear about state debt once again (three days took away the entire year's gains). Fasten your seatbelts.
Vietnam ETF: An Alternative to China [View article]
Good point - emerging markets also didn't do anything prior to 2000. Don't assume that because VNM hasn't performed that it can't in the future be a strong leader.
In Behavioral Finance, there is a term called "Money Illusion" whereby investors would prefer having a positive nominal gain with higher inflation than a negative nominal return with high deflation, even though in the latter scenario you may actually be making money in real terms (purchasing power).
A 110-Year Look at Politics and the Dow [View article]
Excellent research! I must say that given the historical record and adrenaline the Fed is pumping into the system through QE2, it will be fascinating to see how next year plays out.
Three Issues That Could Derail the Rally [View article]
Sure the trend is up for stocks, but commodities are climbing at an even faster rate. What is lost in the discussion here is that commodity costs are rising faster than equities, making much of the gain almost gone in terms of overall purchasing power in the future should costs get pushed down onto consumers.
Keep in mind too that while the yields still look attractive, the reality is that this is also a very crowded trade which could unwind sooner than later depending on global credit shocks.
Chinese Stocks Thump U.S. Counterparts [View article]
FXI has lagged some other China stock ETFs due to the large overweight in bank stocks. China's markets really have not performed all that well when compared against other international indices, but your point about the predictive power of China's markets is well taken.
The Case for Holding a Core Global Equity Allocation [View article]
It remains to be seen as to whether or not the high correlations are a temporary or permanent phenomenon. Kenji is correct in saying that currencies do play a significant role. Emerging markets are in many ways behaving like a levereaged domestic index fund, but this may not be the case forever.
Excellent post. I share the "damn inflation" frustration here. The issue is that any gains in the market become an illusion in the sense that margins should get compressed through higher commodity costs.
U.S. Market vs. Major World Indexes: Restoring Positive Correlation to the Dollar and Market [View article]
Great analysis here. It makes for an interesting discussion - given the tremendous long-term liabilities the U.S. has, is it conceivable that U.S. stocks will ever outperform emerging markets over a sustainable period of time? If not, then that inverse correlation could last for an extremely long time.
Muni Bonds Collapsing; Are Treasuries Next? [View article]
Equity Funds Go All In [View article]
Correction Parallels: May All Over Again? [View article]
Europe as the Commodity Correction Catalyst [View article]
Europe as the Commodity Correction Catalyst [View article]
Europe as the Commodity Correction Catalyst [View article]
Vietnam ETF: An Alternative to China [View article]
Commodities Sending Inflation Signals [View article]
A 110-Year Look at Politics and the Dow [View article]
Three Issues That Could Derail the Rally [View article]
Corporate Bond ETF Risk Eases Up [View article]
Chinese Stocks Thump U.S. Counterparts [View article]
The Case for Holding a Core Global Equity Allocation [View article]
Commodities Sending Inflation Signals [View article]
U.S. Market vs. Major World Indexes: Restoring Positive Correlation to the Dollar and Market [View article]