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Strebler's Perspective

August, 2016 Archives

Mini-Bricks in the Wall of Worry

We've often cited Mr. Russell's "wall of worry" that bull markets climb, a virtual wall made of "bricks" that can turn the bull into a bear.  They're constantly paraded before us by media of every form and stripe, always on our minds or at least in our subconscious.  You know some of the big ones:

 

  • Low interest rates that fail to improve world economies, leading to negative rates that may have disastrous unintended consequences.
  • The slowing economy and immense debt of China's monstrous economy.
  • A U.S. presidential candidate whom even the majority of his own party's leaders consider grossly unqualified for the job.
  • Income inequality that is straining the very fabric of the US economy and who we are.
  • Massive infrastructure problems that are essentially ignored.
  • ISIS
  • Internet hacking and outright attacks by unfriendly organizations and world powers.

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The Politics of Fiscal Policy

by Jon S. Strebler

 

"Don't write about anything political; you're bound to upset readers if you do!" they keep telling me. But Richard wrote about politics and the candidates and just about everything else – didn't he? And how the heck do you not say anything at all during a Presidential year? Especially one that, let's face it, is absolutely unprecedented in modern times? And besides, politics and economics, politics and the market – these things are pretty darn connected, you know. So we're going to talk about politics, but in a milquetoast way that goes against my nature but might keep me out of trouble. 

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Daily Recap

It was a slow day for equities around the world, with little in the way of news.  The Global Dow managed a 0.33% gain, which was better than US markets could muster.  Coming into the close, US stocks were down over half a percent on average, with the Industrials 63 points lower.  Absent any real news, the focus is once again on the Fed and Janet Yellen's comments this Friday, with the latest thinking leaning towards a rate hike next month or in October.

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Our Equity Sectors

By Jon S. Strebler

 

Mary Anne and Pam Aden did a great job recapping how our main stock market indicators are "Not in Sync" last Friday. That, of course, is why we've featured graphics of question marks, followed by a nervous bull, in "The Box" for the past few months, and why we've kept our equity investments at a fairly modest 35%. As suggested last week, readers with a higher risk tolerance may want to increase their stock holdings another 5-10%, but otherwise we're happy with that 35% number for our average subscriber and our official recommendation.

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Money Money Money

by Jon S. Strebler 


Nearly four centuries ago in the kingdom of Bohemia, then part of the Holy Roman Empire but now part of the Czech Republic, the first silver thaler was struck. The name was actually a shortened version of Joachimsthaler, a town where silver was plentiful enough to be mined on a regular basis, adding to the wealth and glory of the Empire's ruling Hapsburg family . 

 

 


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A Breakdown of Traditional Connections

by Jon S. Strebler

 

That is what at least one top economist sees as the message from Camp Kotok this year. As in past years, this gathering of leading economists at a remote site in Maine over several days yielded a consensus of what the next twelve months will bring. A bumpy ride over rough waters, with little progress to show for it – that's another way their view of the future has been described. And that bumpy ride with little progress is a result of the uncertainty ahead, uncertainty due to oversupply of money, of debt, and of cheap labor. Those are the views of Megan Green, chief economist for Manulife Asset Management in a recent MarketWatch story authored by Andrea Riquier.

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