From HedgeFundTips.com: In 2007 the Financial Accounting Standards Board (FASB) made an accounting change – referred to as FAS 157. FAS 157—also known as “mark-to-market,” or “fair value accounting” was primarily responsible for putting Lehman Brothers into bankruptcy and triggering the dominoes that would subsequently fall in concert. The assets didn’t change materially, the “required” accounting of them did. This well-meaning, but utterly ham-handed effort was largely responsible for precipitating the Great Financial Crisis of 2008-2009. You can see the correlation on the chart above between the time FASB implemented the new rule (starting the crash), and when they reversed their mistake (market bottom in 2009). There is no coincidence in this timing.
Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
Air Scare
I was on the long plane ride home from Cambridge to my beloved Palo Alto (cities that are identical in many respects, the temperature notwithstanding) and I saw the ES explode higher. (green tint, below). This was on the heels of a day that already had an EKG-style zaniness from the Fed Minutes. As I sit here now, both of these have faded away (red arrow).
Why Is Central Bank Buying Of Gold So Important?
There is an old Yiddish expression called a bubbe meise (pronounced my-seh). I guess the closest English interpretation of this expression would be a grandmother’s tale, or in the common vernacular, an old-wives’ tale.
Of late, I am seeing a bubbe meise about the importance of central bank buying of gold, and it is making its rounds on websites all over the internet.
We have been hearing for many years about how gold is supposed to soar because countries and central banks are buying the precious metal. Most of the fundamentalists in this market are convinced that this is a bullish signal. In fact, one article I read explained that central bank buying “is significant, as central banks are the ‘smart money’ given their influence on global economics and access to non-public information.” (more…)
Unresolved
Fed Minutes day produced some intraday zaniness. I was basically “checked out” of the insanity all day long, as I chose to do something I hardly ever do, which is to stay completely out of the trading day. I was roaming the chilly streets of Cambridge, Massachusetts, glancing periodically at my iPhone to see what the ES and NQ were doing.
The market was up overall, but we are still completely unresolved. The giant unknown out there remains the Trade Talks, although every blessed day we get some kind of encouraging news about how well they are going (uh-huh). Below I show major indexes and what I consider important areas of resistance (usually horizontals, but sometimes broken trendlines).
Harvard Yard
