Thinking
‘FAITH’ In The FAIT Of Flexible Monetary Policy Is Key To The Fed’s New Framework
The evolution of the Fed’s thinking over the last 30 plus years I have been in the business of investing has been quite remarkable, and it continues to have important consequences for financial markets. About three decades ago, right around the Volcker rule, the paradigm could be represented by a […]
What Locust Swarms Tell Us About Robinhood, Kodak Moments And COVID Mania In The Stock Market
Not too long ago, before digital camera phones made photos all too commonplace, we used to savor “Kodak moments”, which TechCrunch calls “a rare, one-time moment that is captured by a picture, or should have been captured by a picture”. Well, pine no more, because the Kodak moment is back. And this […]
Elon Musk’s SEXY Models Vs. Warren Buffett’s Fruit Of The Loom Underwear
One of the headlines that flashed on TV last week was how Elon Musk had surpassed Warren Buffett in net worth. Now both of these men to me are heroes of capitalism, entrepreneurs, and game-changers. I consume their products, and thank them both for making them available. But their styles and their companies […]
TSLA: Can There Be Too Much Of A Beautiful Thing?
In February I wrote a piece in this forum called “TSLA” “Beauty Happens” (here). I gushed about what an amazing piece of engineering a Tesla is (the car, not the stock). I concluded with the comment that “If … aesthetic theory applies to financial markets, as we suspect it should, then […]
How The Fed Is Using Financial Engineering Alchemy And Leverage To Boost Stock Prices Without Buying Any
Amongst the many responses to my last post “When MMT Meets The S&P” , the best and most important one I received was this question: “What is the mechanism by which the Fed is indirectly supporting equity markets? Since they haven’t yet announced the direct purchase of equities, how is their […]
When MMT Meets The S&P
Modern Monetary Theory (MMT), is becoming all the rage now among progressive economic thinkers. The simplest way to explain MMT is that sovereigns like the US, Japan and UK, who issue in their own currency can never default, hence deficits mean absolutely nothing in the short run, and maybe even in […]
Kudos To The Fed For Saving The World, For Now
When Federal Reserve Chair Jerome Powell and the Fed went all in, this author and many others complained that the Fed was possibly behind the curve, and perhaps too late, and was trying to make up for it by being overly aggressive by slashing rates to zero and promising unlimited […]
MAMA’s Day: “Make America Make Again” Stocks Will Win The Next Decade
I recently saw a study that showed that every decade there has been one asset class that has outperformed everything else by a large margin. In the 60s and part of the 70s it was the “Nifty Fifty” (Coca-ColaKO, Disney, GE, IBMIBM etc.) stock basket; in the 70s gold was the […]
Negative Price Of Oil Is Telling Us That Something Else Will Break Next
Just when we thought that Central Banks’ trillions of fresh money off the printing press had stabilized the financial markets, the price of May WTI Crude oil fell to -$40 a barrel on Monday. The proximate cause was the excess supply of oil and no storage for the oil glut […]
Picking Winners And Losers: Government Action Will Determine Where Best To Invest
It is impossible to look at the prognosis for COVID-19 and not conclude that the global economic sudden stop is a negative for the equity markets. But as always, just looking at the surface and making strong conclusions from the news might not be the best way to make investment decisions. In […]
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