This afternoon brought the latest statement from the Federal Reserve, and the big news is that they’ve decided not to implement any additional quantitative easing (QE) measures for the time being. The 9% stock market rally so far this month has been partly attributed to investors anticipating the possibility that the Fed would unveil a…
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…
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…
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…
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.…
So here we are again. Sovereign yields of the problem children in the European Union are on the rise again. The chart above shows the yields on the Greece Generic 10 Yr Bond in Orange and the yield on the Irish Generic 10 Yr Bond in white. As you can see on the chart,…
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…
The stock market began the month of September with a gain of close to 3% and I’m not happy this morning. The month of August was terrible and I’m pleased. What’s wrong with this picture? The answer is simple. When we have positioned our portfolios to defend against market declines then any market rally is…
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, 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…
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