The Russia/Ukraine spat has definitely heated up with Russia formally recognizing the two provinces in Eastern Ukraine that it already had informal control over.  Obviously things are fluid and can always devolve further, but markets seems to be pricing in a decent amount of this risk currently.  Energy and commodities seem like the biggest beneficiary...Read More

Heightened concerns about military conflict between Russia and Ukraine have rattled markets the past two weeks. Just today, the S&P 500 was down 2.12% and the Nasdaq was down 2.88%.  The 30 second version is that Russia wants assurances that Ukraine won’t join NATO and has long-term cultural affinity with the territory.  Ukraine wants its...Read More

I’ve been writing a lot about elevated valuations for equities and the absolutely horrid risk/reward in almost all bonds.  I’ve kept the same graphics at the top of this email for the last month as I want to emphasize the importance.  We’ve also covered inflation, which is rearing its ugly head, with the September PPI...Read More

Today the Case/Shiller housing price data came out and it showed prices up nearly 20% YoY. Brent crude oil touched $80 per barrel and is on course for its best month since February. Treasury yields have risen quite dramatically over the last week, with the 10-year now above 1.5%, the highest since June.  Natural gas...Read More

Global markets have sold off pretty hard to start the week.  Most of the narrative surrounds the Chinese property market and one of their largest developers, Evergrande.  China’s government is clamping down on leverage and demanding many industries to buy in, literally, to their social objectives via cash “donations”, cheaper housing, etc.  Both the Shanghai...Read More

Today the U.S. consumer prices numbers were released.  The numbers topped forecasts significantly, increasing by 0.8% from the prior month, reflecting gains in nearly every major category.  To put it into context, the gain in the overall CPI was twice as much as the highest projection in a Bloomberg survey of economists.  It is clear...Read More

Last night’s Senate runoff in Georgia looks like it will be a clean sweep for the Democrats giving them control of the Presidency, House and Senate (with the VP holding the tie breaking vote). The margins in the House and the Senate are very small, so it won’t be easy to pass a major tax...Read More

The last decade has been a strong one for U.S. equities and bonds.  One primary driver of that performance were low starting valuations, stemming from the Great Recession, which had just ended in 2009.  This was the opposite of the scenario that led to the lost decade preceding it.  I believe many market participants are...Read More

Running up to the election in 2016, I believe the market was down 12 days in a row or something along those lines. We’ve seen a substantial selloff once again running into this one as tensions are high and stimulus is not happening prior to the election. Facebook, Amazon, Apple, and Google were down by...Read More

I’ve written quite a few times about the Tech Bubble that currently exists in the U.S. stock market.  No stock better epitomizes this madness than Tesla.  Over the last 12 months, Tesla generated $24.578 billion in total revenue and generated EBIT (earnings before interest and taxes) of negative $69MM.  Tesla’s market capitalization is a staggering...Read More