equities

By Michael Pettis originally written on 31 Jul 2015 I plan to post a new entry very soon but before doing so I wanted to say a few things about the stock markets, which continue to be insane (but not unexpectedly so) and then repost a…

Yesterday I mentioned markers of economic and financial weakness that I believe show cracks in the facade of benign economic data out of the US and Europe. Today I want to briefly go through a few of these data points and highlight what…

A typical portfolio will almost certainly not deliver the required returns over the next decade. If ‘typical’ means a 60/40 approach, as already mentioned, then 2-4% annualised returns are what can realistically be expected. If ‘typical’…

Two notable events regarding stock and bond markets have occurred in the last twenty-four hours. One is comments from Fed Chair Janet Yellen that suggest she sees U.S. equity prices as elevated. The second is a wide-spread backup in yields…

My thesis for the global economy right now is that global nominal GDP growth will continue to slow, leading to more policy accommodation, with the outliers converging toward zero. The question mark in this is the Federal Reserve. Generally,…

Yesterday I made up the phrase “The Four Horsemen of this rally” when discussing the bull market rally with a colleague. What I was trying to get at was the unsustainable nature of a divergence between top line revenue growth and the…

Going forward, equity markets are likely to have a much bigger impact on the economy than has been the case in the past. This is a simple conclusion derived from the fact that total equity market value today is 1.2x GDP. 35 years ago, when…

This past week, I have been focusing on the US economy and the Fed’s reaction function. I would summarize my view as positive about the cyclical trajectory of the US economy but concerned about so-called secular stagnation due to high…

The title of this post is what the Fed wants us to believe. It wants us to believe that it is prepared to raise interest rates this year but that it will increase them slowly by assessing the data, hiking once and re-assessing, and then…

There is definitely a technology bubble brewing. And it will end badly. Some people are going to get rich though - and not necessarily undeservedly so. Some thoughts below I am going to make this very short. Valuations in the private…