Good Thing We Don’t Wait for the NBER

Today, we finally received official word from the National Bureau of Economic Research (NBER) that the recession ended in June 2009. And while that’s good news, informed investors are probably wondering, “Where have they been?” One of the reasons that the NBER is notoriously late in classifying expansions and contractions is that they use coincident…

Buckets of Risk

A substantial part of my job is to try to explain Pinnacle’s investment process to folks who are interested in active and tactical management. Although I spend my days in the trenches with Pinnacle analysts trying to implement our strategy, it is no small challenge to try and simplify our process into an explanation that…

Competitive Devaluation in Progress

Manipulation of a country’s currency is one mechanism that can be utilized to try to reflate economic growth. This is especially true when a country has a heavy reliance on exports. A cheaper currency lowers the cost of the country’s products abroad, thereby boosting the ability to export goods. When many countries are trying to…

Slightly Overcooked?

This is not the first time I have written about (whined about?) managing the volatility of Pinnacle portfolios when we insist on owning a diversified group of asset classes. We don’t have a dial to turn to adjust portfolio volatility, which is heavily dependent on the day-to-day correlations of the various asset classes we own.…

Don’t “Over Think” It

During one of our investment team meetings last week, we made the point that it is often important to look for the “easy” trade. It reminds me a lot of watching youth soccer teams where the athletes try to thread a pass through several defenders in order to set up the Striker with a breathtaking…

Will the Jobs Show Up?

Yesterday was a great day for risk assets, as markets celebrated better than expected manufacturing numbers out of both the U.S. and China. On the back of an excruciating August for equity markets, it’s hard to tell whether the magnitude of the bounce had more to do with short-term oversold conditions, or if the market…

The Great Reflation: A Book Review

The Great Reflation, by Anthony (Tony) Boeckh, is a brilliantly crafted book that gives the reader a fundamental top-down understanding of how markets interact with each other. As long-time readers of BCA (Bank Credit Analyst) research, much of Boeckh’s message is a review of what we’ve learned over the years. But for most readers, who…

The Battle for 1050

The market seems to be locked in a heated battle around 1050 on the S&P 500. The index has been in a tug-of-war, crossing above or below 1050 in each of the past 5 trading days, which has been very interesting to watch. Last Friday, the bulls seemed to gain the upper hand. The market…