Doug Neal - Comments

Doug Neal

Member's Links: Gulfcoastcommentar
I have 30 years of international oil and gas project experience but now early-retired. I hold a Bachelors of Chemical Engineering and an MBA in Economics. I have traveled the world widely for work and pleasure and call the US Gulf Coast my home.

Latest Comments
S&P 500 Dunce Cap
7 years ago

World wholesale finance is failing a la 2008, so it's likely to be a very, very bad year. Why else are banks like Credit Suisse and Deutsche Bank shrinking their FICC activities, canceling dividends, firing 10,000s. There's a great ill-wind of deflation blowing as world trade and world liquidity contracting. Interestingly, geo-political peace is falling apart at the same time.

In this article: SPX, SOX
Is Your Investment Portfolio Prepared For Higher Interest Rates?
8 years ago

early-retiree here at 58 yo. Mostly in cash now as of May1. I mostly sold in May to go away. I'm looking for an opportunity to buy (and buy back) a bunch of lightly leveraged muni bond CEFs. Can get 5.5 to 6% on them. Thoughts? I'm looking for a panic in the treasury or foreign sovereign market to add them back to my portfolio. If stocks crash, even the muni CEFs crash too :(

U.S. Business Cycle Risk Report - 17 June 2015
8 years ago

James, let me give you an example of "unconventional" economic cycle risk. Right now, consumers are so stretched (as shown by the past 6 months of retail sales) with higher rents, much higher health care costs, higher food prices, etc that any rise in gasoline costs would trigger a downturn. For example, if China decides to "outbid" the US for oil supplies in an effort to re-flate their economy, and gasoline hits $3.50 per gallon or more, I believe that would tip the US into a recession. I do believe that this is a possibility and this risk would never be captured by LEI components. Just saying...

U.S. Business Cycle Risk Report - 17 June 2015
8 years ago

James, a great article. I understand the concept of LEIs. When we live in a time of extreme financial bubbles, do the LEIs still have predictive power when bursting bubbles cause recessions? Did your indicators predict the 2008 recession for example? When I look back at 2007 and 2008, markets did seem to forecast a deteriorating financial conditions. Today, things are even worse. For example, even a slight rise in interest rates this year COULD trigger a big downturn in the financial markets that are so extended and speculative, and trigger a larger economic downturn. Like in 1937?

I wouldn't be surprised that, in hindsight after the next crash, that there is an extended financial leverage (to many yield-oriented investments leveraged against ZIRP) that is not currently understood. A sudden collapse of markets could trigger a recession especially since the economy is running at barely above zero real growth rates. LEIs won't necessarily pick-up this financial debt effect until after the fact I suspect.

We live in a dangerous world now and the next recession may very well surprise everyone.

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