Gone In 60 Seconds

The extreme dangers for investors in the most perilous segment of capital markets were fully revealed last week. While the seemingly guaranteed upside remains alluring for some, participants continue to face the risk of seeing their investment in this white hot market segment evaporate at an even quicker, lightning fast pace.

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The Volatility Of Everything

How wonderful would it be if capital markets were absolutely perfect? Imagine a world where risk assets like stocks only rose and never fell regardless of valuations (OK, you don’t really need to imagine it, because that’s what’s been happening since late last year). Envision if bond yields and borrowing costs remained perpetually low at the same time that inflationary pressures were benign (OK, once again, sounds like today). And imagine having all of this in an environment where the daily uncertainty associated with the prices of these assets was minimal (OK, we’ve got that today too). What a world it would be? And maybe, just maybe this is the world that we have officially entered into during the post crisis period. Perhaps policy makers through their actions have finally discovered the master theory that fully explains and links together all fundamental aspects of capital markets. But in case they have not, it is worthwhile to consider what might take place when capital markets move on to something other than the seemingly perfect conditions that we are experiencing today.

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Doomed To Repeat History

Here we go again. Perhaps the one thing that has been more surprising than the resilience and persistence of the stock market throughout the post financial crisis has been the complete and total abdication of sound decision making by global regulators and policy makers in taking actions in the wake of the last two crises to prevent yet another market implosion in the immediate future. But here we go again. Same misguided policy actions, same policy oversights and missteps, same expected results at some point in the future.

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Stocks: Worst Week Ever, Better Days Ahead

The U.S. stock market got off to its worst start to a calendar year in history. In the first five days of 2016, the S&P 500 Index plunged by -6%. Following this latest of many unprecedented market events during the post crisis period, it is worthwhile to consider what we should expect from here from financial markets.

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Winners And Losers Since The Bull Market Peak

The U.S. stock market is currently in correction. And given that we are now more than four months removed from the last time the S&P 500 Index set a new high, it’s worthwhile to consider the following question. Is it possible that a new multi-year bear market is already well underway? Only time will tell. But if indeed market historians someday look back on 2015 in the same way that they do 2000 and 2007, it’s worthwhile to consider the particular segments of capital markets that are following the stock market to the downside and perhaps more importantly those that may already be assuming the lead to the upside.

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