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Markets
Heads or tails?: The Demographics of Investing
When the working age population grows faster than the broad population, demographics become a tailwind as far as economic growth is concerned. Hence, what is likely to become a significant headwind for advanced economies in terms of…
Economics Noble winner Fama: QE is just an asset swap
Fama has been doing research on QE for the last six months. And he basically tells Santelli that QE in the Treasury market is an asset swap of short-term government debt for long-term debt. Fama’s depiction of QE is accurate and mirrors…
US stock market capitalization higher than any time except NASDAQ bubble
It is worth noting that currently both markets are pushing deviation extremes only seen four times previously. The difference has much to do with the "secular market" within which these deviations occurred. The current deviation from the…
Reasons behind the sell-off in crude oil
WTI crude oil has undergone a substantial correction in the last few days. What's going on?
The Investment Climate in Six Points
Long-term interest rates may have bottomed several months ago, but rate will remain low for several more months. For good reason, many observers and investors are concerned that the dysfunctional political system in the US will renew the…
The ABS market is back in business again
After a rough patch this summer (driven by "taper" fears), consumer asset backed securities (ABS) business is heating up again. The bulk of that business is represented by auto and credit card loans. The pick up in demand is visible in the…
This simple trading strategy points to rationale for currency wars
Select two countries with the worst performing currencies (against USD) over the past 4 months and go long equity indices of those two countries. Now select the two best performing currencies and short the indices of those countries (to the…
Attention Shifts from US Fiscal Policy to Monetary, Pushes Dollar Lower
A last minute deal was struck that re-opens the US federal government and removes the immediate threat of default, but rather than turn the attention from the US, the focus has shifted from fiscal policy to monetary policy. In particular,…
In the event of a missed payment, the US has three days to cure
US CDS is based on treasuries (linked to a specific security - the co-called "reference obligation"), which according to the official offering document (see offering circular here), do not have a "grace period". Under such circumstances…
Becalmed Markets Conceal Rising Anxiety
The US dollar is narrowly mixed against major and emerging market currencies. Comments by House Speaker Boehner that he will form a majority bloc to avoid a default by the Federal government is being understood two ways.