As mortgage rates in the US reach the highs not seen since early 2012, many are asking the key question: would this rise in rates impact the housing market or consumer sentiment?
I think that Bullard is something of an outlier at this point. Ongoing declines in inflation would eventually cause his worries to spread further through the Fed, and could very well delay any effort to cut back on asset purchases.
The next formal policy statement from the Federal Reserve could prove to be unfriendly to the current stock rally.
Spot gold fell to three week lows below $1370 an ounce Tuesday, as stocks and commodities also fell amid ongoing speculation over when the US Federal Reserve might begin reducing the size of its quantitative easing program.
There are two market warning signs which have just recently been triggered and which have gotten a lot of press attention due to their catchy names. The Titanic Syndrome was created in 1965 by the late Bill Ohama.
The historical relationship between P/E multiples and earnings growth suggests, strongly, that growth revisions in the second half of the year will be positive ones.
I believe that in the past two to three years there has been a significant and welcome shift in Beijing’s attitude towards maintaining growth, and that this shift implicitly represents a shift from the capital frontier model of optimal investment levels to the social capital model.
Three factors – volcanic debris, more variable polar jet streams and increased human habitation in high-risk areas – are creating extreme weather and high insurance payouts. Some of these are temporary while other factors will last for decades.
Back in 2002 Warren Buffet famously proclaimed that derivatives were ‘financial weapons of mass destruction’ (FWMDs). Time has proven this view to be correct. It is difficult to imagine that the US housing and general global credit bubble of 2004-07 could have formed without the widespread use of collateralized debt obligations (CDOs) and various other products of early 21st century financial engineering.
If China’s historical consumption growth continues, and if demand remains relatively price insensitive, the growth in demand for oil will be ‘relentless’ according to Staniford.
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