Posts Tagged ‘bubble’

We Have Top Men Working On It

February 10th, 2016 by Kurt L. Smith

In late January the Federal Reserve’s Open Market Committee voted to do nothing. Unfortunately they had to say something and it was that something that reminded me “we have top men working on it.” Here the top man is a woman, Chairman Janet Yellen.

The Fed’s luster was destined to pale from the days in 2000 when Chairman Alan Greenspan was dubbed Maestro for his deft maneuverings. Chairman Ben Bernanke was Time Magazine’s Person of the Year in 2009, having saved the world, or at least us, from certain financial ruin.

So from Chairman Yellen we ask “what have you done for us lately?” Stocks swooned in August but recovered by December only to have the Federal Reserve vote to hike interest rates for the first time in ten years. Now that stocks have swooned again to begin 2016 we find the Fed to be hesitant in its plans to normalize, I mean raise, short-term interest rates. (more…)

The Trend Is Not Your Friend

November 11th, 2015 by Kurt L. Smith

Investors look to the Federal Reserve for economic leadership. Looking backward, one might say the Fed helped get the economy back on track with lower interest rates, higher asset prices and lower unemployment. Looking forward, the Fed continues to feed us the line that next month or next quarter will be better. (more…)

Stocks, Bonds & Optimism

August 8th, 2014 by Kurt L. Smith

Years ago, in the middle of the raging bull market of the late 1990s, I taught a bond class in SMU’s continuing education program. One notable feature I highlighted in the class was how bond performance had matched stock performance since the beginning of the bull market in the early 1980s.

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“Welcome To The Everything Boom”

July 20th, 2014 by Kurt L. Smith

The July Letter almost didn’t make it as the same old, same old markets continued their gravity defying ways. On July 7th however, The New York Times saw fit to publish this headline as their front-page lead: “From Stocks to Farmland, All’s Booming, or Bubbling.” (more…)

High Prices Be Damned

December 20th, 2013 by Kurt L. Smith

For some things in life, the price is the price. You must pay it because you have to or you need to pay it. With one son in college and another on his way next year, I know all about prices one must pay. Some people look at investing the same way: the cost is the price one must pay. (more…)

Great Success

November 11th, 2013 by Kurt L. Smith

The financial markets spent most of October peaking so why should I add my usual dose of downer? Instead, in the spirit of thanks and Thanksgiving, why not look back at some of our successes and revisit why we choose the path we do. (more…)

Exceptional Exceptions

August 30th, 2013 by Kurt L. Smith

In a world that includes dozens of US Treasury bond issues (but just one credit) or hundreds of Corporate bond issuers, Municipal bonds offer tens of thousands of different credits, terms and conditions. It is these differences, rather than their similarities, between issuers and issuances that account for the robustness of the municipal bond market. (more…)

Joining The Fray

June 28th, 2013 by Kurt L. Smith

Bond market performance has gone from bad to worse. The month of May was bad; June even worse. Prices of longer-term bond funds have plunged, primarily in the past eight weeks, leaving municipal bond dealers and longer-term municipal bond portfolios down about ten percent for the period. (more…)

On The Right Track

June 10th, 2013 by Kurt L. Smith

In an era of seemingly low to no interest rates, we see an increase in opportunities in municipal bonds. Despite continuing Quantitative Easing by the Federal Reserve, asset prices are weakening, yields are rising and long-term assumptions should be questioned. (more…)

Watch The Markets, Not The Fed

May 8th, 2013 by Kurt L. Smith

The Federal Reserve, along with most Central Banks around the world, are creating Cash and Credit at an unprecedented pace in the most ambitious economic experiment of all time. Yet despite Central Bankers attempts to create Cash and Credit (and hence inflation), the price of Gold fell from over $1900 to almost $1300. (more…)

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