This QE Bower My Prison

The Federal Reserve’s persistently aggressive monetary policy has had a paralyzing effect for many investors over the last several years. Like a skillet of boiling hot milk being emptied on one’s foot, repeated monetary stimulus programs, including three rounds of quantitative easing, two rounds of Operation Twist and the quintupling of the Fed’s balance sheet, has distorted capital markets in such a way that it has imprisoned many investors to a bower of heightened risk control and uncharacteristically short-term thinking amid the expectation that the negative spillover effects from such unprecedented policies will eventually come home to roost in a significant way. But as we enter the twilight of the Fed’s supposed final round of quantitative easing, the confined investor has reason for gladness, for they can continue to delight in the splendor of today’s market while also knowing that nature never deserts the wise and pure in the end.

Please click on the link to read more of my article on Seeking Alpha.

3 Keys To Watch In The Week Ahead

Stocks took their first tumble in nearly four months late last week. While the magnitude of the pullback has thus far been modest at just over -3%, some investors are left wondering given already high valuations and a slowly retreating Fed at this advanced stage of the third longest bull market in history whether last week’s decline might be the start of something more severe. With this in mind, three key leading indicators are worth watching in the coming week, for they may foretell whether far greater declines may soon be in offing even if the broader market manages to find its footing.

Please click on the link to read more of my article on Seeking Alpha.

Why Thursday’s Sell-Off Matters

The stock market was rocked on Thursday, posting its worst single day decline in nearly four months. Such declines are certainly not unexpected, and it was clear following a spring and summer of quiet markets that some degree of downside volatility was more than overdue. But unlike many other recent stock market pullbacks, Thursday’s decline was notable, as it came with a convergence of troubling forces not seen in capital markets in over a year. In short, the stock market sell-off on Thursday matters, and how events unfold in the coming days should be watched closely for potential action, if needed.

Please click on the link to read more of my article on Seeking Alpha.

A World Without Consequences

A contagion of global and potentially epic proportions is becoming more deeply embedded with each passing day. And the impact from this epidemic is both far and wide with a meaningful influence on global politics, acts of war and even financial markets. What is this global dilemma? It is the increasing realization that we are seemingly living in a world without consequences. Global actors with considerable weight, some of which have dubious objectives to say the least, are able to move freely without accountability. Moreover, these actors are likely feeling increasingly emboldened by the fact that each unthinkably controversial line crossed is apparently met with little to no response other than equivocation from those that are charged with the responsibility of maintaining order and formulating a response. While trying to ignore and delay dealing with the major geopolitical and financial problems besetting the world today may continue to provide the easy way out in the short-term, such disregard can ultimately lead to gravely disastrous costs at some inevitable point in the intermediate-term future.

Please click on the link to read more of my article on Seeking Alpha.

Welcome To The Machine

If you are someone that enjoys the artistry of investing, now may not be your favorite time to participate in capital markets. For the artistry of the investment decision making process has been squelched and distorted over the last several years by the moneymaking machines of computerized algorithms and seemingly endless liquidity flows from global central banks. But whether we like it or not, we do not get to invest in the markets that we want to have; we only get to participate in the markets that are given to us. And the reality remains that investment markets continue to provide an important vehicle to generate a higher rate of return on long-term savings, which is needed by many now more than ever with the interest earned from bank CDs and savings accounts locked at virtually nil. Investors can remain dedicated to their artistry in today’s environment, but just as long as they recognize how it fits in the context of the forces that are driving capital markets.

Please click on the link to read more of my article on Seeking Alpha.

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