Economics & Theory

Too Much!

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July 22, 2014
Slider-Economics-and-Theory

We look at the various ways this market is showing "too much" -- too much divergence, too much Fed trouble, and so on.
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Mission Not Accomplished

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June 23, 2014
Slider-Economics-and-Theory

Originally published June 14th, 2014, in our Strategic Intelligence Report: “I was in Baghdad, and I was given a draft of that thing to look at. And I just died, and I said my God, it’s too conclusive. And I fixed it and sent it back… they fixed the speech, but not the sign.” ~...
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Central Banks Are No Cure For Legislative Incompetence

Slider-Economics-and-Theory

Central banks are no cure for legislative incompetence. Never have been, never will be. And yet, there is an attitude that “doing something” is always better than doing nothing — and so the central banks are urged to fix what the politicians have screwed up.
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Death of the Omnipotent Central Bank Narrative

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May 5, 2014
Slider-Economics-and-Theory

The Omnipotent Central Bank Narrative is drawing to a close. As equity markets cease to levitate, the mighty magicians lose their power.
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Tiger Soup

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April 28, 2014
Slider Themes and Trends

History does not repeat. But does it rhyme, as Mark Twain (possibly) suggested? Julian Robertson's "Tiger Cubs" risk a repeat blowup as high-beta growth names break down...
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Lessons From The Palindrome

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February 26, 2014
Slider-Economics-and-Theory

George Soros, aka “the Palindrome,” recently reclaimed the top spot among the top ten hedge fund managers of all time. A fitting opportunity to revisit his wisdom...
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Take Your Lame Consensus Forecasts and Shove ‘Em

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December 18, 2013
Slider-Economics-and-Theory

Rant warning: The annual predictions from Wall Street are obnoxiously worthless. You'd be better off listening to Britney Spears or Spongebob Squarepants...
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Modern Portfolio Theory is for Nitiots

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December 21, 2012
Slider-Economics-and-Theory

In the following paragraphs, we shall defend the assertion that Modern Portfolio Theory is for Nitiots. To begin, let us define our terms...
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What if Recovery is Actually Bearish?

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October 25, 2012
Slider-Economics-and-Theory

If it sounds absurdly counter-intuitive that a recovery could be bearish equities, just consider the impact of central banks as a counterbalance. Losing that counterbalance could tip the scales lower (in terms of equity prices) to a greater degree than organic improvement tips them higher...
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Is China the Biggest Malinvestment Case of All Time?

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September 19, 2012
Slider-Economics-and-Theory

If there is a credible counter-case as to how China will evade all the lessons of history, slip past its egregious mistakes unscathed, mimic the worst sins of the West while paying no penalties, and turn the essential tenets of free market economics upside down in doing so, we would love to hear what...
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The Federal Reserve is Terrified of the Tea Party

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September 14, 2012
Slider-Economics-and-Theory

The Fed may have further decided that President Obama's reelection is so important, it is worth risking all manner of bad optics to make it happen (by juicing the economy prior to November as much as it possibly can)...
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The Magical World of Charles Evans

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August 28, 2012
Slider-Economics-and-Theory

The Magical World of Charles Evans: Can someone, anyone, make a credible case for the chain of logic that Evans assumes - the if / then assertion that "if" the Fed buys more bonds, "then" unemployment will fall?
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The Bernanke Cargo Cult: Bankrupt Policy for a Bankrupt Generation

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July 25, 2012
The Bernanke Cargo Cult: Bankrupt Policy for a Bankrupt Generation

There is a class of equities we call “cult stocks.” Roughly speaking, a cult stock is a high-growth concept stock, with an extraordinary degree of emotionally invested ownership. The classic cult stock typically has all of the following: An excellent story Excellent earnings / growth trends Leadership in its market space Membership in a...
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In Defense of U.S. Treasuries (or, Debunking an Ideological Rant)

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June 26, 2012
In Defense of U.S. Treasuries (or, Debunking an Ideological Rant)

As a general rule, it is wise to avoid debates on emotionally charged topics. This extends to certain areas of trading and investing, where schools of thought take their differences as seriously as competing religions. It also extends to certain macro topics — relating to “moral” matters such as debt, the corruption of the...
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With Uncertainty Rampant and Politics Dominant, Charts Matter More Than Ever

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June 19, 2012
With Uncertainty Rampant and Politics Dominant, Charts Matter More Than Ever

In times like these it is very important to understand the message of price, and the value of charts as an extremely efficient short-hand means for communicating broad-based fundamental assessments. But first a quick (or maybe not so quick) aside: There is a false dichotomy between ‘fundamental’ trading on one side and ‘technical’ trading...
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