We’ve spoken before on this blog about how woefully underfunded public pensions are. This is because most pension funds are using unrealistically high rates of returns in their assumptions; assumptions that come nowhere close to reflecting reality. But that piece was written more than a year ago; how do things stand now as at end-2017? […]
Our Increasingly Leveraged Stock Market – What It Means
The stock market has been up all the way since the beginning of the year. Despite the economic woes of the average citizen, our stock market seems to be racing all the way to the top. We’ve already addressed questions as to whether the stock market is overvalued quite a few times on this blog. […]
Big Banks Are Back At It Again: The Lost Lesson Of Leveraging
Ever since the Great Financial Crisis of the 2008, the ‘fat cat banks’ have been vilified by the public and the politicians; and rightfully so. While the average citizen was left struggling with an underwater mortgage, the government used taxpayer money to bail out these ‘too big to fail’ banks. There were no criminal prosecutions […]
The Crazy Mispricing of Risk Today
It’s no secret that the quantitative easing (aka money printing) policies of the US Federal Reserve and the European Central bank has, to put it lightly, not been very successful. We’ve talked about this before, but to reiterate, there has been no evidence that QE works. Inflation has remained low and real economic activity is […]
The Great QE Unwinding is here: What Does It Mean for You?
About 10 days ago on September 20 2017, the Federal Reserve finally made the announcement that many dreaded, but ultimately knew was inevitable. The Fed is finally stopping its Quantitative Easing Program and beginning what is being deemed ‘the Great QE Unwind’. How great is great you ask? Well the Fed’s balance sheet currently stands […]
China’s And America’s Debt Bubbles: How Long Before They Pop?
In September 2017, legislators will meet to try to raise the national debt ceiling…. which currently stands at just under $20 trillion ($19.809 trillion to be exact), before the September 29 deadline. Regular readers who have been following this blog will be well aware of the true scale of America’s debt situation…. If the United States […]
What Happens to the Market When the Liquidity Tap Gets Turned Off?
Despite numerous warnings from various experts, our stock market continues to reach unprecedented highs. The Dow Jones stands at another all-time high of 21,891. And so does the S&P500 at 2,470. We’ve talked previously about how the Shiller Ratio which measures cyclically adjusted price earnings ratio, is at the same level as 1929; second only […]
