With all of that considered, Morgan Stanley has taken on the unenviable task of pinpointing what could ultimately bring about the end of the third-longest bull market in history. For context, the firm uses a proprietary US cycle indicator as a benchmark for when a downturn is imminent.
But is Fischer right? Is systemic leverage truly lower? The answer is “of course not” as anyone who has observed the trends not only among vol trading products, where vega has never been higher, but also among corporate leverage, sovereign debt, and the record duration exposure can confirm. It’s just not where the Fed usually would look.
Why did it go so wrong? Exaggerated expectations of that which each other party could realistically implement. Believing each other’s rhetoric. America’s love affair with Saudi royalty. Kushner’s family ties to Netanyahu. Wishful thinking on the part of Kushner and Trump that MbS could be the instrument to restore not just the Saudi kingdom as America’s “policeman” in the Islamic world, but even the American-led order in the Middle East, too.
Of the 30 companies in the DJIA, 14 reported “adjusted” or “non-GAAP” earnings in Q3 that were significantly higher than their GAAP earnings. Total “adjusted” EPS of these 14 Dow components exceeded their total EPS under GAAP by 26%! Nice work!
The failure of the bureaucracy to centrally plan money is simply a special case of the socialist calculation problem, which cannot be overcome (as an aside, it is not all clear why students of economic history should accept that central banks have been established for anything other than nefarious reasons). The most elegant solution would of course consist of simply replacing central planning with a truly free market in money.
Angela Merkel may be running out of road after 12 years at the helm in Germany. With the chancellor’s attempt to form a fourth-term government in disarray, Merkel’s once unquestioned ability to steer Europe is waning as the region’s biggest economy heads into uncharted waters and possibly a protracted political stalemate.
As an American, Haley is an embarrassment and unfit to represent my interests at the U.N. Her outburst was in response to Russia vetoing the latest attempt by her to bully the UNSC to accept a resolution extending the investigation into the April chemical weapons attack at Khan Sheikhoun in Syria. This investigation, known as the JIM, is a complete joke. In all the time the U.N. has been operating under it there has been no inspection of either the site of the attack itself or where it supposedly emanated from, the Syrian airbase at al-Shairat.
As President Xi Jinping’s government intensifies the fight against the country’s world-class pollution problem, companies are scrambling to adapt to tighter regulation while investing in cleaner energy. In industries from steel to textiles and consumer goods, the resulting shakeout has left the survivors with far more pricing power. That in turn is reinforcing the already-resurgent factory prices that contribute to global inflation.
In a way, the bet on Japanese bonds is the bet that the massive tsunami of monetary easing that hit the global economy since 2008 is not going to recede anytime soon, no matter what the central bankers say in their dovishly-hawkish or hawkishly-dovish public statements. And this expectation is not only contributing to the continued inflation of a massive asset bubble, but also widens the financial sustainability gap within the insurance and pensions sectors. The stage has been set, cleaned and lit for the next global financial crisis.
Business Insider CEO Henry Blodget talks about the warnings being issued by a growing faction of fund managers, including John Hussman, the president of the Hussman Investment Trust and a former economics professor. He outlines Hussman’s argument that equity valuations are too high, and that technical indicators are flashing sell signals.