Posts Tagged ‘job creation’

Will Quantitative Easing Spur Inflation? Job Creation? Credit Expansion? Do Anything?

Will Quantitative Easing Spur Inflation? Job Creation? Credit Expansion? Do Anything?

Courtesy of Mish 

St. Louis Fed James Bullard’s proposal to start "quantitative easing" is creating a stir. Chris Ciovacco at Ciovacco Capital Management (and many others) propose the Fed can and will use quantitative easing to induce inflation. I disagree.

The following are snips from Chris Ciovacco’s article, Reading Between The Lines: James Bullard’s Seven Faces of “The Peril” followed by my point-by-point replies.

The titles in "bold red" below are questions Chris Ciovacco proposed and answered. My answers are quite different.

What could all this mean to me and my investments?

Chris Ciovacco: Let’s start with quantitative easing, where the Federal Reserve buys Treasury bonds. Using a hypothetical example to illustrate the basic concepts, assume a typical American citizen has some Treasury Bond certificates in a shoebox under their bed. If the Fed offers to buy those bonds, they will be exchanging paper money, not currently in circulation, for a bond certificate. After the transaction, the American citizen has newly printed money and the Fed now has a bond certificate. It is easy to see in this example the Fed has increased the money supply by buying the bonds. The Treasury Bond represents an IOU from the U.S. Government. When the Fed buys bonds in the open market, it is like the government buying back its own IOU with newly created money. This is about as close to pure money printing as it gets.

Mish: The typical American citizen does not have Treasury Bond certificates in a shoebox, under their bed, or anywhere else. Those who do have treasury bonds, more than likely have them in a mutual fund portfolio or treasury EFF and they probably do not even realize they have them. The very few who hold treasury bonds outright, are highly unlikely to sell them.

How is this policy any different from lowering interest rates or increasing bank reserves?

Chris Ciovacco: Lowering interest rates and flooding the banking system with cash has one major drawback; if the banks won’t issue loans or customers do not want to take out loans, the low rates and excess bank reserves do little to expand the supply of money in the real economy. Therefore, these policies can fall into the "pushing on a rope" category. Quantitative easing, or Fed purchases of Treasury bonds, injects cash directly into…
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Looking Beyond Tomorrow’s Non-Farm Payroll Number To Spot A Negative Shift In Structural Unemployment

Looking Beyond Tomorrow’s Non-Farm Payroll Number To Spot A Negative Shift In Structural Unemployment

Businessman carrying office belongings

Courtesy of Tyler Durden

Goldman chief economist Jan Hatzius has created a useful preview of tomorrow’s NFP number (consensus +90,000 private, -65,000 overall), explaining why Goldman has a more negative outlook on the number than most (+75k and -75K, respectively). Jan’s conclusion on tomorrow’s, and recent trending data :"Our view remains that the primary job market problem is a shortfall in labor demand." More relevantly, Hatzius does an extended analysis of the Beveridge curve (i.e., the relationship between unemployment and job vacancies) to determine if there has been a shift in the overall level of structural unemployment

 
 
 

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Timing the Market

 

Timing the Market

Courtesy of 

In August 2017 I wrote “This will be my last post on the CAPE ratio.” I made it 16 months, which means I pretty much kept my word.

I was listening to Invest Like the Best when Cliff Asness said, “You do not want to make a career trying to beat the stock market based on whether it is cheap or expensive.” This sent me back to the drawing board.

There are no universal agreements...



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Kimble Charting Solutions

Junk Bonds sending 2000 & 2007 Bearish messages again!

Courtesy of Chris Kimble.

This chart looks at Junk Bond Fund (PHDAX) and the S&P 500 over the past 25-years. Junk bonds sent bearish messages “before stocks peaked in 2000 & 2007.” Bearish divergences took place for 24-months in 2000 and 7-months in 2007, prior to stocks peaking and turning much lower.

This year Junk bonds have been sending a bearish message to stocks for the past 16-months, as another bearish divergence has been taking place.

Junk bonds and the S&P 500 are currently testing 9-year rising support currently. If both break below 9-year support, they would be suggesting that a long-term low in stock...



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Zero Hedge

Nasdaq Futures Are Crashing As Apple Collapses

Courtesy of ZeroHedge. View original post here.

After yesterday's bloodbath, the world and their pet rabbit was ready to BTFD... but that's not what is happening...

Nasdaq futures are down another 2%, Dow futures are down almost 400 points and S&P futures are now red for 2018...

Nasdaq futures are practically unchanged YTD...

AAPL is down almost 4% more today!! (...



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Insider Scoop

The Street Reacts To BlackBerry's Cylance Acquisition

Courtesy of Benzinga.

Related BB Benzinga's Top Upgrades, Downgrades For November 19, 2018 BlackBerry Scoops Up Cybersecurity Company Cylance For $1.4B ...

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Chart School

The Power of the Dow Jones Cycle

Courtesy of Read the Ticker.

Once again the data confirms cycles exists in the market. Value and other fundamental investors must concede cycles are in the stock market. [You can learn more about our Hurst Cycle tools here].

Previous Post Kitchin Cycle warned of market volatility

In the past this blog has posted the chart below, the Kitchin cycle or 900 periods, and you can see its success.

The cycle source:

.."Joseph Kitchin (1861–1932) was a British busine...



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Members' Corner

NY Times: OPERATION INFEKTION

 

This is a three-part Opinion Video Series from NY Times about Russia’s meddling in the United States’ elections as part of its "decades-long campaign to tear the West apart." This is not fake news. Read more about the series here.

OPERATION INFEKTION

RUSSIAN DISINFORMATION: FROM COLD WAR TO KANYE

By Adam B. Ellick and Adam Westbrook

EPISODE 1

MEE...



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Digital Currencies

Bitcoin's high energy consumption is a concern - but it may be a price worth paying

 

Bitcoin's high energy consumption is a concern – but it may be a price worth paying

Shutterstock

Courtesy of Steven Huckle, University of Sussex

Bitcoin recently turned ten years old. In that time, it has proved revolutionary because it ignores the need for modern money’s institutions to verify payments. Instead, Bitcoin relies on cryptographic techniques to prove identity and authenticity.

However, the price to pay for all of this innovation is a high carbon footprint, created by Bitc...



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ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



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Biotech

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

 

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Breast cancer type 1 (BRCA1) is a human tumor suppressor gene, found in all humans. Its protein, also called by the synonym BRCA1, is responsible for repairing DNA. ibreakstock/Shutterstock.com

By Jay Shendure, University of Washington; Greg Findlay, ...



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Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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