Contrarian Indicator: My Perfect, 7-for-7 Forecasting Record Want to make a fortune? Don’t follow my advice. Do the opposite. In the interest of full disclosure, herewith are all the market calls I got wrong the last few years (in my defense, so did almost every other so-called “expert”): 1. Stocks: Prediction: ↓ Actual: ↑ Explanation:...Read More
Flight to Safety Keeps a Lid on Interest Rates The flip side of a (very) rocky stock market so far this year is cheaper mortgages for home buyers. That’s because investors seeking safety pile into bonds. That drives bond prices up . . . and interest rates down (bond prices and interest rates move inversely...Read More
Janet Yellen Playing Ben Bernanke’s Favorite Tune Maybe, someday Saved by zero I’ll be more together Stretched by fewer Thoughts that leave me Chasing after My dreams disown me Loaded with danger Maybe I’ll win Saved by Zero Holding onto Words that teach me I will conquer Space around me Maybe I’ll win Saved by...Read More
Parallels With Subprime Mortgage Melt-Down “The U.S. economy’s output is roughly $18.4 trillion per year. Total exports to China are very roughly $120 billion per year. That’s a lot of hamburgers, but it’s roughly seven-tenths of one percent of the U.S. economy. If our exports to China fell by 20 percent — a large number — that...Read More
Beleaguered Shareholders: “Stop the Merry Go Round, I Want to Get Off!” Are gyrating, crashing stocks good or bad for the housing market? Both. In fact, I see three positives and negatives apiece emerging from the recent market carnage. Positives Here are the pluses (yes, pluses): Weak equity markets forestall the Federal Reserve’s plan to...Read More
Shiller: Why Smart Money Can’t Stop a Housing Bubble At least according to economist (and Nobel Prize winner) Robert Shiller, housing is more prone to bubbles than stocks for two reasons: 1) housing supply eventually responds to higher prices, satisfying demand (and then some); and 2) unlike stocks, it’s not possible to short housing —...Read More
