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The phony assumptions that go into calculating public pension underfundings in the United States are a frequent topic for us. As our readers are aware, state pension administrators are given fairly wide leeway to simply pick a discount rate out of thin air. Of course, since pensions are nothing but a massive stream of future […]
Authored by Charles Hugh Smith via OfTwoMinds blog, Everyone who believes risk has disappeared has fallen for the con. Judging by this year's version of Santa Claus's reliable year-end stock market rally, risk has vanished, not just in stocks but in bonds, junk bonds, housing, commercial real estate, collectible art–just about the entire spectrum of […]
For several decades now the American Midwest has suffered from unprecedented economic decay courtesy of a persistent outsourcing of manufacturing jobs in the automotive and steel industries, among others. As we’ve noted frequently, that economic decay has resulted in a devastating surge in opioid overdoses that claim the lives of 100s of people each year. […]
Authored by Axel Merk via MerkInvestments.com, With the stock market and Bitcoin reaching all-time highs, what can possibly go wrong? In offering my thoughts on 2018, I see my role in reminding investors to stress test their portfolios. Is your portfolio built of straw, sticks or brick? First, let me allege many investors have portfolios […]
Ah Goldman, never change. One week after Goldman’s chief equity strategist David Kostin predicted a three-year bull market of “rational exuberance“, lifting his 2018 S&P price target from 2,500 to 2,850 rising to 3,100 in 2020, and stating that should the exuberance turn “irrational”, the S&P could rise as high as 5,300 by the end […]
Yesterday we presented readers with one of the most pessimistic, if not outright apocalyptic, 2018 year previews, courtesy of BofA’s chief investment, Michael Hartnett who warned that in addition to the bursting of the bond bubble in the first half of the year, the stock market could see a 1987-like flash crash, potentially followed by […]
Public pensions all around the country like to play a clever little game that allows them to drastically understate the current value of their future liabilities and therefore pretend that their ponzi schemes are something other than insolvent frauds. Of course, we’re talking about the artificially high discount rates that pension boards consistently use to […]
One week ago, on November 9 something snapped in the Nikkei, which in the span of just over an one hour (from 13:20 to 14:30) crashed more than 800 points (before closing almost unchanged) at the same time as it was revealed that foreigners had just bought a record amount of Japanese stocks the previous […]
The latest monthly Fund Manager Survey by Bank of America confirmed what recent market actions have already demonstrated, namely that, as BofA Chief Investment Strategist Michael Hartnett explained, there is a “big market conviction in Goldilocks leading to capitulation into risk assets” while at the same time sending Fund managers’ cash levels to a 4-year […]
Is the largest public pension fund in the United States getting ready to dump about $50 billion worth of stocks? According to a new note from Bloomberg, CalPERS’ board is meeting for a workshop today in Sacramento to discuss asset allocations for the upcoming year which could include a doubling of the fund’s bond allocation […]
One of the most popular JPMorgan analysts, traders and commentators, Jan Loeys, head of global asset strategy and author of the weekly “The JPMorgan View” piece is moving on (to a different, non-client facing part of the company), and is using his last weekly address to JPM clients to recap the main lessons he has […]
Something has changed… For months high yield bond yields have been compressed alongside rising stock prices as the flood of global liquidity from central banks. ECB buying has driven European junk bond yields below those of US Treasuries and in turn that has pressured global high yield risk lower – despite a rise in leverage […]
Authored by Lance Roberts via RealInvestmentAdvice.com, While I remain long and invested in the markets on behalf of my clients, I focus and write about the significant risks that are currently present. I am fully aware a laissez-faire attitude towards these risks is ultimately likely to destroy large portions of my clients hard-earned, and irreplaceable, […]
CNBC's Joe Kernen nonchalantly commented this morning that "Dow futures are indicated higher… Just like every other morning," and that just about sums up the current utopia as consumer and business surveys spike irrepressibly in line with a seemingly unstoppable meltup in US equity markets. However, as former fund manager Richard Breslow warns this morning, […]
Via LyonsSharePro.com, The following guest post is a first-hand account of the events surrounding the Crash of 1987 by JLFMI President, John S. Lyons. Personal Recollections of the Crash of 1987 on its 30th Anniversary “There was no ‘smart money’ that day.” What do the assassination of President John F Kennedy, the beginning of Desert Storm […]