Latest Blog Posts

Bonds Tank – Trump the Catalyst


By   –   November 11, 2016

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Pressure has been building in the bond market for a while.  More than $1 trillion dollars in value was lost

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Diversification – Staying the Course


By   –   November 1, 2016

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Diversification is one of the most recommended investment strategies, yet adhering to this fundamental has caused investors a fair amount of grief over the last few years. Why??? Generally, as to not have “all your eggs in one basket”, investors will divide their nest eggs a number of ways in an effort to lower the overall portfolio risk. Common diversifiers are – international stocks ranging from Europe to China, Market Capitalization (i.e. Large companies and small companies), and Commodities (Oil, Gold, Corn, etc.).

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Bank Risk to Energy Loans – Is it really a big deal??


By   –   March 11, 2016

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Oil prices continue to be depressed due to increased global supply and record high inventory levels in the U.S. The glut has pressured energy producers, especially higher cost shale oil producers. These companies have done a number of cost cutting measures to circle the wagons and find a way to adjust to the new environment. Further, with Iran bringing on new supply, and limited cooperation among global producers, it looks likely these lower oil prices will persist.

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Workers Coming Back!!


By   –   March 4, 2016

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Today’s jobs reports yield mixed signals as to the status of the U.S. labor market. The headline jobs created number blew away the estimate, but average hourly earnings were lower than expected. There can be a fair amount of revisions to this data, so initial data has to be taken with some salt. On the whole, the market is reacting positively, suggesting the numbers are still indicative of a strong labor market, but not strong enough for the Fed to accelerate interest rate increases – a “win-win” for investors.

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Hidden Inflation and Stronger Wages


By   –   February 5, 2016

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The apparent consensus among investors seems to be that inflation will never be an issue again. 30 year Treasury note yields, a common proxy for inflation expectations, are nearly as low the stock market crash in 2008-09. Yet, unemployment has just dipped below 5% in the U.S. and wage gains are starting to trend above the average of the last few years. Since the unemployment rate has dropped so low, it is possible that the acceleration of wages could increase exponentially as there a fewer workers to draw from, thereby accelerating inflation pressure…

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Chinese Diesel Demand Supports Oil “Lower for Longer” Case


By   –   January 26, 2016

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Chinese diesel demand showed another drop in year-over-year consumption.  This is not unreasonable given the well known goal of the

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Cocoa – The Only Bright Spot in Commodities


By   –   January 15, 2016

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Commodities across the board have had a difficult time in the last few years. A slowdown in Chinese growth and Saudi Arabia’s decision to abandon production limits have crushed commodities from oil to metals. Agricultural commodities have also had their share of difficulties as favorable weather conditions have supported record yields in corn and sugar. Supply-led price declines are particularly difficult to recover from because it can take a long time for the market to find an equilibrium. ..

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China – A BIG Seller of U.S. Treasuries??


By   –   August 18, 2015

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China made a big impact on markets with the unexpected devaluation of their currency, the yuan. China has been a mixed bag this past year with their growth slowing substantially as they try and transition to a more consumer based economy. However, their investment markets have become more open, which yielded a sudden rush into China A-shares. The rally has been short lived and a good portion of the shares have fallen back down. The longer term issue is how long it will take the Chinese economy to settle into the new economic model…

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More Data Showing Active Managers Outperforming


By   –   June 25, 2015

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Invesco Powershares, ironically enough, has just published a paper supporting previous research (Active Share and Mutual Fund Performance – Antii

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Oil Rally Disconnect – Expectations vs. Reality


By   –   May 7, 2015

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Since the middle of January, oil prices (Brent Crude) hit bottom and rallied significantly – from 45 to 69. The problem is that the futures market looks to be well ahead of the physical market. Such speculation is common, but the caution is that if the assumptions do not come to fruition. We could see a decline in the short term…

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