An Ingenious Plan to Pay All Debts
With the U.S. sinking hopelessly into a black hole of debt, and households facing an avalanche of tax hikes that will at best postpone the nation’s day of bankruptcy, we are all hard-pressed at this point to see a way to a happy ending. Lo, along comes an anonymous e-mail that describes a way to solve everyone’s debt problems painlessly. If you think the plan can work…
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Shorts Back Away, Letting Stocks Fall
A few more days like yesterday, and bears could be pardoned for feeling a little cocky. By simply keeping their cool Sunday night, they left DaBoyz with precious little buying power when stocks began to trade Monday morning. The result was a 200-point decline to start the week. That’s even worse than last Monday’s step-step-stumble out of the gate, which primed the Dow Industrials for a 187-point decline that day. The mood on Wall Street has definitely changed, and nowhere is this more evident than in the failure of the world-class…
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Lemmings Stoke Flight to ‘Quality’
It takes some getting used to whenever the phrase “flight to quality” pops up in print or on the business shows these days. Supposedly, that is what has been driving Treasury Bond prices sharply higher since June 11, when futures contracts on 30-Year U.S. Treasurys bottomed at 111^21. That equates to a yield of about 4.84 percent. Yesterday the same contract settled at 117^11, so eager were buyers, evidently, to lock in 30-year rates of…
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Even After Failures, Fed Fever Lingers
The markets displayed disturbing symptoms of Fed-itis yesterday, spasming up and down even though the central bank did nothing even remotely interesting, let alone earth-shattering. Monetary policy was left unchanged, which is the only thing that could have happened. To say the markets overreacted begs an explanation as to why. We can only infer that there are still many investors who cling to the notion that the central bank can jump-start an economy in the throes of a debt deflation by encouraging more borrowing. They might as well put their faith in lunar cycles; for if easy money were capable of rejuvenating the financial system, then why has an estimated $13 trillion of stimulus produced no decisive upturn, nor barely even a blip in a still-deflating housing market?
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Q2 Finale Offers Bears No Respite
The short-squeeze mania that sent stocks blithely higher yesterday reminded us that shares are likely to remain erratically buoyant at least until the end of the second quarter. “Rebalancing” has been the name of the game since the bear rally began in early March, and portfolio managers are unlikely to alter their allocation strategy with less than a week to go before they get their final “grades” for the quarter. Meanwhile, if there was any doubt about the aggressive institutional tilt toward shares during Q2, they were refuted by a friend of ours who recently moved his wealth management business from one brokerage house to another after being a star at the former for more than 30 years.
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