Investment Letter
Contributor's Links: ANG Traders

I have degrees in mathematics, science, and education from the University of Toronto. My son is a PhD candidate in computer science at Oxford University.

By combining my 40-years of market experience with my son's youthful computer science knowledge, we produce a uniquely ... more

ALL CONTRIBUTIONS

Indications Of A Bottom
High yield spread, unemployment in relation to the 10y rate and the SPX are implying the bottom is in.
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E One Market, Two Different Sentiments
Fear is present in today's market, but it is unevenly distributed; there is a divergence between the AAII survey, and both the put:call ratios and Robinhood data. This may imply short-term market weakness.
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A Tale Of Two Sentiments
One way of measuring market sentiment shows fear, another another fear of missing out.
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Individual Investor Sentiment Has Not Capitulated
Individual investors continue to be overly bullish. This implies further downside for the market.
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What Bank Credit And The SOMA Can Tell Us About The Stock Market Today
The SOMA and bank credit are reacting in the same way to the alien virus as they did to the 2008 financial crisis. If this similarity continues going forward, we should expect lower lows in the stock market.
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30% Of GDP In Deficit Spending Is Required For A Quick Recovery
A recession is unavoidable at this point. How quickly we start to recover from the downturn will depend on the level of deficit spending by the US government.
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Comments

Latest Comments
Money Fund Growth And The End Of The Expansion
6 months ago

It would be unfair to our subscribers to give away too much detail, but one reason is the record low equity hedging.

In this article: SPY, DIA, QQQ, IWM
MMT Heaven And MMT Hell For Chinese Investment And U.S. Fiscal Spending
8 months ago

Thank you for the clear explanation.

Study Discovers That If The Debt Machine Was Turned Off, The U.S. Would Immediately Plunge Into A Horrifying Depression
10 months ago

"The primary cause of 70s inflation was a continuation of Fed easy money that LBJ required."

Now you switch to Nixon and the gold standard removal?

The embargo caused a shortage which caused inflation, and because energy is such a basic requirement for the economy that the shortage stopped growth in its tracks...stagflation.

Twitter Terror
10 months ago

Ignore the Tweets. That isn't what drives markets.

In this article: SPX
Study Discovers That If The Debt Machine Was Turned Off, The U.S. Would Immediately Plunge Into A Horrifying Depression
10 months ago

In 1963, Fed rate was 3.5%. By the time LBJ left Office in January 1969, it was7.1%.

So I don't know what " Fed easy money " you mean? That was serious tightening.

Study Discovers That If The Debt Machine Was Turned Off, The U.S. Would Immediately Plunge Into A Horrifying Depression
10 months ago

By-the-way, I agree with the the premise contained in the title. Without debt-money from either the private or the monetary sovereign, the world economy would cease to exist. The world economy would be reduced to local bartering.

Study Discovers That If The Debt Machine Was Turned Off, The U.S. Would Immediately Plunge Into A Horrifying Depression
10 months ago

Yes, the oil embargo was the proximal cause of the inflation. Inflation is always because of a shortage of something. And oil is a key ingredient in the economy, so a shortage of it is guaranteed to cause inflation and stagnation at the same time. When you have a shortage of such a key element, and increasing its production is impossible in the short-term, nothing, not even deficit spending is going to fill that hole. And there was no way of avoiding it either because, unlike today, at that time the US was not self-sufficient in oil which was controlled by one agent (cartel).

Study Discovers That If The Debt Machine Was Turned Off, The U.S. Would Immediately Plunge Into A Horrifying Depression
10 months ago

The point is, the Federal deficit is not the problem. It, in fact, is always the solution. In both 2001 and 2008, it was too much private deficit, not Federal deficit, and it was the latter that had to be increased in order to pull the markets out of the fire.

Note also, that Clinton reduced the Federal deficit for five-years, leading to a Federal government SURPLUS...and a private sector DEFICIT that became too inflated to be sustained. Again, the point is that Federal deficits aren't what historically cause the problems.

Study Discovers That If The Debt Machine Was Turned Off, The U.S. Would Immediately Plunge Into A Horrifying Depression
10 months ago

One HUGE flaw (many smaller ones) in your argument:

Federal government budget deficits and the "debt" that they lead to, is NOTHING like household or state budget deficits. In fact, the work "debt" is a misnomer, and should be called the Federal government "funding of the economy".

It has been increasing for 80-years, as has the size of the economy. The Federal government will never run out of dollars...unlike you, me, and local governments.

Too Much Fear
10 months ago

What you say is true. However, since we NEVER know where we will be in the future, we have to use correlations that existed in the past in order to establish what is likely to happen down the road. There are only two constants in the stock market---fear, and Treasury money flows---and both are saying that the market is likely to be higher in the medium and long-term future.

In this article: SPX
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STOCKS I FOLLOW

APPS Digital Turbine, Inc.
BZUN Baozun Inc
IWM iShares Russell 2000 Index Fund
JD JD.com
QQQ PowerShares QQQ Trust Series 1
SPXL Direxion Daily S&P500 Bull 3X ETF
SPY SPDR S&P 500
UVXY PowerShares Exchange-Traded Fund Trust II
VIX Volatility Index CBOE

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PERSONAL BLOG

Latest Posts
Money Funds And Recoveries
Money funds decrease during true market recoveries.
Gold: The Early-Winter-To-Late-Summer Pattern
Gold and bond pattern.
Stocks-To-Bonds Ratio Collapse
Stocks-to-bonds ratio drops to lowest the value since December 2018.
The Tariffs Won't Happen.
The tariffs on $300B of Chinese will never be implement, just like tariffs on Mexico were never implemented.

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