The Capital Spectator

A SETBACK, OR JUST MORE DATA VOLATILITY?

jp — Thu, 09 Jul 2009 08:19:37 PDT

Forecasting is tough, especially about the future, runs the old joke. But the dark art of prognosticating these days is no laughing matter. Case in point: the burning question at the moment is whether the so-called green shoots of economic recovery turning brown? It's getting harder to answer...

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A SMALL DOSE OF PERSPECTIVE

jp — Tue, 07 Jul 2009 08:45:13 PDT

You can't generate robust forecasts of risk premia by looking only at the past, but you can certainly learn a lot about how the capital markets fluctuate. With that in mind, we present a cursory look at recent history. In particular, the chart below compares the Global Market Index to a few of...

To read the full article, please visit The Capital Spectator at www.CapitalSpectator.com

PONDERING U.S. EQUITY ALLOCATION & THE BROAD PORTFOLIO MIX

jp — Mon, 06 Jul 2009 10:12:46 PDT

The case for seeing equities as one global beta is compelling if you're looking out over very long time frames. But in the shorter term, perhaps even as long as 10 or 20 years, the rationale for making geographic distinctions is persuasive. Why? The answer begins by recognizing that valuations...

To read the full article, please visit The Capital Spectator at www.CapitalSpectator.com

STILL FLOUNDERING BETWEEN THE ROCK & THE HARD PLACE

jp — Thu, 02 Jul 2009 08:28:37 PDT

The pundits are shocked, shocked to learn that jobs are still being lost. But there's really nothing surprising in today's jobs report for June, released this morning by the Bureau of Labor Statistics. Recessions have a habit of doing that, and for longer than the crowd expects. Disappointing and...

To read the full article, please visit The Capital Spectator at www.CapitalSpectator.com

THE COOL WINDS OF JUNE

jp — Wed, 01 Jul 2009 06:08:45 PDT

The weather in June was cool and rainy in the New York region, and something similar prevailed over the capital and commodity markets last month as well. As our table below shows, June was a month of mixed messages, ranging from a healthy rally in high-yield bonds to loss in REITs. Disappointing,...

To read the full article, please visit The Capital Spectator at www.CapitalSpectator.com

VALUE JUDGMENTS

jp — Mon, 29 Jun 2009 08:29:00 PDT

It's been a tough year for value stocks. Is that surprising? No, although it reminds that Mr. Market prices certain slices of the equity market differently throughout the business cycle. For the year through June 26, the rebound in equities has been powered mostly by growth stocks, according to...

To read the full article, please visit The Capital Spectator at www.CapitalSpectator.com

THE GREAT EXPERIMENT BEARS FRUIT...SO FAR

jp — Fri, 26 Jun 2009 09:16:42 PDT

One day we'll look back on 2009 and wonder what all the confusion was about. All will become clear and we'll know when the recession ended, when the bull market began anew and how and why the cycle turned. Meanwhile, we're wondering if the data du jour can be trusted. Judging by the numbers of...

To read the full article, please visit The Capital Spectator at www.CapitalSpectator.com

AN EARLY SUMMER RETREAT

jp — Mon, 22 Jun 2009 06:56:44 PDT

The Capital Spectator will be taking a few days off, returning to what passes as normal around here on Friday, June 26.

To read the full article, please visit The Capital Spectator at www.CapitalSpectator.com

GOOD NEWS...AND SOME OTHER STUFF

jp — Mon, 22 Jun 2009 04:36:11 PDT

Another former Fed club member weighs in today on how/when/if the Fed unwinds the massive monetary stimulus it's created over the past year. Frederic Mishkin, a former FOMC member, summarizes the problem and the potential in today's Wall Street Journal, observing that there's good news and bad news...

To read the full article, please visit The Capital Spectator at www.CapitalSpectator.com

IS IT EVER TOO EARLY TO WORRY ABOUT INFLATION?

jp — Sun, 21 Jun 2009 18:03:43 PDT

Last month, Alan Blinder warned that the main risk in monetary policy was pulling away from the stimulus too soon. We responded by pointing out that there was also a danger of letting the liquidity surge roll on too long. The challenge is finding a balance between the two, we argued. In a...

To read the full article, please visit The Capital Spectator at www.CapitalSpectator.com

SOME CALL IT PROGRESS

jp — Thu, 18 Jun 2009 09:34:03 PDT

Nirvana for investing is getting tomorrow's news today. Impossible, of course, which leaves strategic-minded investors to search for the next best thing. That boils down to hard work. Estimating expected return and risk is at the heart of intelligent investing. We still can't peer into the...

To read the full article, please visit The Capital Spectator at www.CapitalSpectator.com

A BULL MARKET IN FALSE DAWNS?

jp — Wed, 17 Jun 2009 08:14:22 PDT

Flat to a slight upside bias. That about sums up the prevailing state of inflation at the moment, based on this morning's latest from the U.S. Bureau of Labor Statistics. Seasonally adjusted consumer inflation rose 0.1% last month, up from zero the month before and a modest decrease in March. On...

To read the full article, please visit The Capital Spectator at www.CapitalSpectator.com

THE CASE FOR GRADUALISM IN MONETARY POLICY

jp — Mon, 15 Jun 2009 08:09:48 PDT

New York Times columnist Paul Krugman writes today that it's too early to begin removing the monetary stimulus engineered by the Federal Reserve. "A few months ago the U.S. economy was in danger of falling into depression," he notes in his column. "Aggressive monetary policy and deficit spending...

To read the full article, please visit The Capital Spectator at www.CapitalSpectator.com

ANTICIPATING THE END, STILL WORRYING ABOUT THE BEGINNING

jp — Fri, 12 Jun 2009 07:34:36 PDT

It's still not over, but it's getting close. When we took a hard look at initial jobless claims as a leading indicator this past March, we wondered if this data series would live up to its historical record as a robust clue about the end of the recession. The answer is always in doubt in real...

To read the full article, please visit The Capital Spectator at www.CapitalSpectator.com

REPRICING THE FUTURE

jp — Wed, 10 Jun 2009 07:13:26 PDT

Arthur Laffer advises in today's Wall Street Journal that it's time to "Get Ready for Inflation and Higher Interest Rates." The market's been telling us no less, as we've been discussing now for some time. Although the deflationary risk has been front and center since the financial crisis erupted...

To read the full article, please visit The Capital Spectator at www.CapitalSpectator.com