The Earth, Wind & Fire Prophesy

Did the legendary R&B band Earth, Wind & Fire in 1978 unwittingly predict an important monetary inflection point for the global economy and its capital markets nearly four decades later? Two major global central banks in the U.S. Federal Reserve and the Bank of Japan will respectively emerge from their highly anticipated and watched policy meetings next Wednesday, September 21. Capital market pretenders, and there are many following seven years of relentless policy stimulus, have certainly seen their minds shifted in recent days by the notion that the Fed might actually raise rates at the same time that the Bank of Japan may finally be out of bullets for additional stimulus. Will these central bankers be able to successfully chase the investment market clouds away come the 21st night of September?

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Keeping The Bond Rout In Perspective

Focus has understandably turned to the sharp rise in bond yields in recent days. This has raised concerns among some investors that it may be time to evacuate allocations to the bond market. While the recent back up in rates should be monitored closely along with the related decline in stocks, it remains important to keep the recent spike in interest rates in context.

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What The Lael Is Going On Here?

I’m all for transparency. The more information that investors and the general public has at its disposal, the better. But important criteria for transparency to be meaningfully useful is that the information provided must be at least somewhat organized and coherent. Otherwise, it can cause more harm and confusion than good. And when it comes to the Fed and their ongoing efforts at monetary policy transparency, it is an utter mess that is further damaging the confidence of already wildly distorted financial markets.

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Stocks Finally Awaken – What Now?

The U.S. stock market suddenly woke up on Friday after nearly two months of sleepy sideways trading. The primary catalyst was the notion that the Fed might actually raise interest rates at their next policy meeting on September 20-21. If this is indeed the reason for the sell-off, it should not have come as a surprise to investors, as the Fed has been consistently stating since late July that a rate hike in September was on the table. Regardless of the reason, the markets have finally stirred from their prolonged slumber as they head into the weekend. What can we reasonably expect next?

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Will The Fed Turn The Market Red?

An interesting historical relationship exists between interest rates and investment markets. It is widely understood that when the U.S. Federal Reserve engages in phases of tightening monetary policy where it is raising interest rates that commodities prices will suffer. But Dr. Copper has had something to say about such conclusions over the past few decades.

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