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The US market’s advance is predicated on multiple expansion
So the past year has been the year of earnings decline. Yet, the US stock market keeps powering to new highs. What's going on? It's called multiple expansion and it is the hallmark of all bull markets, cyclical or secular. The question is…
The succession battle at the Fed and the Fed’s reaction function
Long-term interest rates are largely a reflection of expected future short-term future interest rates plus a term premium. So when you see yields move up, it reflects either an increase in term premiums from uncertainty or a change in the…
How the United States gets deflation and becomes the next Japan
I spoke at a Euromoney conference on inflation-linked products last year. My thesis at the time that deflation is the real problem and that inflation isn't going to be a concern - which has largely proved right - was out of step with most…
Tech links: 2013-08-01
Tech news links for 1 Aug 2013. These are my tech links from early today. I haven't seen anything from today's new yet and that means there's nothing in here from the Motorola X debut. That's going to be a very big story over the next few…
The Fed nomination battle is disastrous for Obama
I will make this as brief as possible. I have just learned via Twitter that President Obama is reputed to have given a "full-throated" defense of Larry Summers in his meeting with Congressional democrats. It is clear now that Obama wants…
Chart of the Day: US house price inflation up by up to 25%
I thought this chart was a good one. It shows how quickly house prices have recovered in a number of markets. WHile DC and LA are the areas where the Case-Shiller index is at its highest, over the last year, Atlanta, Las Vegas, Phoenix and…
European sentiment indicator as an economic indicator
I don't put a lot of stock into economic sentiment surveys but the time series of this particular survey, the European sentiment indicator caught my eye. It suggests a recovery in Europe is almost here.