It is no secret that US credit markets have been increasingly stressed lately. Junk bonds are tanking and junk’s ratios to the relative quality of Investment Grade and Treasury have as well.
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.
Gold Sector Inputs That Actually Matter
The word play in the title is in reference to the ridiculous fuss over COMEX gold inventory and other promotions masquerading as fundamentals put out by cartoons masquerading as analysis.
30 year divided by, and 30 year minus 5 year are neutral at best. Yield spreads would be rising in a gold-positive environment. As a side note, this spread also tends to bring trouble for the stock market during its initial stages of rising.
Last Week’s Peek Behind the Policy Curtain
Note: This article assumes the reader knows the reasons we are now bearish on the Semiconductor Equipment sector. NFTRH subscribers definitely do and NFTRH.com/Biiwii.com readers should as well. Readers who have been around a few years also know that we became bullish on the Semi’s in Q1 2013 from much the same reason, in reverse, we are becoming bearish now.
This article was originally and simply titled ‘Market Management’ as the opening segment from this week’s NFTRH 372. We then covered US and global stock markets and precious metals in detail, along with brief but ongoing negativity about commodities (but also what to look for regarding signs of change), a currency update and extensive market sentiment and indicator updates.
As noted recently, my trading had become problematic because I do not have the time, inclination or even the raw talent to day trade, which is what this market has seemed to demand lately. There is no better illustration of the reason why trading has been difficult than what happened on Tuesday through Friday as markets popped up to challenge the recovery highs, tanked hard, seemingly launching the bear view and then ramped again toward the highs on Friday (on a policy maker’s jawbone, what else?).
Until Today
Euro 50 Flips Draghi the Bird, S&P 500 Fails at a Key Parameter, Semi’s are Fundamentally Bearish and Gold Has a Sentiment Washout Within its Bear Market
Markets Had Been Obedient, Until Today
Despite Janet Yellen’s protests to the contrary, the 7 year long asset market bailout (ZIRP + QE’s 1, 2 & 3 with a side of Operation Twist) has served to further enrich formerly troubled asset holders and provide a handy wealth effect for regular 401k holders to boot.
It’s great as long as things stay so symmetrical that even a linear-thinking, professionally trained economist can understand it. Indeed, Mario Draghi has been implementing a ‘me too!’ QE plan in Europe in order to more or less ape the success that is the US bond market err, management program. Fed Funds interest rates at zero, pinning T bill yields to the mat and encouraging banks to borrow for free and lend at interest, Quantitative Easing in various forms sanitizing inflation signals and literally painting the macro backdrop as desired. It all seemed so easy, so unquestioned by the market.
Yellen Responds as a Central Banker Would
By Biiwii
Let’s try to untangle the web of Fed-speak going on here. “Reality” for our purposes is defined as my opinion, obviously.
Yellen Defends Seven Years of Low Interest Rates in Letter to Nader
Fed-Speak:
Warning that “an overly aggressive increase in rates would at most benefit savers only temporarily,” she argued in the letter released Monday in Washington that the Fed’s seven-year era of zero rates had sheltered American savers from dramatic declines in the value of their homes and retirement accounts.
Reality: (more…)
