Market Commentary

Daily reports from our Chief Economic Strategist.

TODAY’S HEADLINES ARE APOCALYPTIC

How long will it take before most begin questioning the government’s draconian action of shutting down the economy and society?  Is the economic/societal nuclear carpet bombing worth it?   The headlines

IS THE TIDE TURNING?

Is the tide turning? In my view, yesterday was the first day the headlines were not entirely apocalyptic. There was an element of rationality, something that has been missing for at least three weeks.

SOME FACTOIDS

All markets surged yesterday on the tentative passage of the stimulus.  As I have stated, I am wondering whether the cost is worse than the disease.  As noted yesterday, the global economic cost is around $120 trillion.

IS THE CURE WORSE THAN THE DISEASE?

Today there is a mass government imposed shut down of business activity and of society.  This shutdown if it lasts too long will erode future living standards and may end up

THERE ARE NO WORDS TO DESCRIBE TODAY

What makes today different is the speed of the unrelenting decline where a liquidity issue is perhaps morphing into a solvency issue.  The Federal Reserve threw everything in including the kitchen sink to perhaps to no avail.

WILL THE LIQUIDTY CRISIS MORPH INTO A SOLVENCY CRISIS?

According to Bloomberg last week was the most volatile week in history.  In my view the greatest risk at hand is the liquidity issue morphing into a solvency issue.  I would like to use the $3.9 trillion municipal bond market as example of how trading has almost

WORDS CAN NOT EXPRESS THE CARNAGE

Words cannot express the carnage, the volatility, the fear of today’s market implosion.  All markets have been decimated anywhere between 25% and 75% in 30 days.  Many times, I have commented about the velocity of change but never had I envisioned

WE ARE LIVING IN HISTORICAL TIMES

We are living in historical times.  The S & P 500 has moved a record 4% or more in eight consecutive sessions.  The previous record of six days was set in 1929.  Moreover, yesterday the markets stopped trading twice because of declines.

AN INCREDIBLY VOLATILE DAY

A Bloomberg headline read “A Volatility Doom Loop May Be Taking Hold In US Markets.” The article cited “unnamed SEC officials” talking about the issue of risk parity funds and high volatility funds reinforcing this negative loop amplified by low liquidity.

THERE IS AN EPIDEMIC OF PANIC…WE WILL SURVIVE AS WE ARE “THE WRETCHED REFUSE…” THE MUTTS OF THE WORLD AND MUTTS ALWAYS WIN
This too shall pass, focus on the positives and known information, not hyperbole and conjecture. In many regards both big business and government is fanning the hysteria under the much over used line of “Abundance of caution.”
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