October 11, 2023 | Daily JAM, Dividend Income, Long Term, Morning Briefing, Volatility |
“Nobody expects the Spanish Inquisition!” Monty Python observed back in 1970 before attempting to torture a coal-miner’s wife with a dish rack. There’s an important investing version of this core truth: The financial market usually worries about the wrong problem. So that when the “Spanish Inquisition” (in financial terms) finally arrives, everybody is surprised. Well, we investors and traders have done it to ourselves again. We’ve spent much of 2022 and a good part of 2023 worrying about whether Federal Reserve interest rate increases would send the economy into a recession. There are still a few recession die hards worrying about that possibility, but by and large the worry has shifted to whether or not the Fed will delay its rate cuts in 2024–and thus delay the arrival of the “rate-cut-bounce.” While MANY–but certainly not all–investors, traders, and market analysts have been looking OVER THERE, however, the credit markets have built up a huge debt overhead and the global debt bomb looks ever closer to exploding. A crisis with the dire effects of the Global Financial Crisis of mid-2007 to 2009 is a possibility. I’d “guess” that most portfolios aren’t ready. The time to get ready is now. This increasingly looks like a debt market crisis of the type known as a Minsky Moment. To get ready first understand the source of the problem. I’m putting together a new Special Report for next week on what to do to get ready. Today’s post is a kind of set up, a get ready for the post on getting ready, if you will.
July 5, 2022 | Daily JAM, Videos |
My one-hundred-and-fifty-third YouTube video “Trend of the Week: The Global Debt Bomb is Ticking” went up today. Overly dramatic? I don’t think so. In this week’s video, I look at the few countries that are leading what looks to me like a parade of global defaulters on their sovereign debt. Dire warnings issued by the IMF and World Bank have predicted that other “developing economies” may follow. Plus, I give some tips for plays you can make to insulate yourself from this risk right now.
May 18, 2022 | Daily JAM, Videos |
My one-hundredth-and-thirty-sixth YouTube video “Looking for a wider credit crunch” went up today. I think last week’s video worrying about a credit crunch in the consumer economy was a bit too optimistic. I’m now seeing signs in the market of a wider credit crunch. In this video, I look at the junk bond market and its reflection in Bausch (BHC) as a test case as well as the trend in profits for the S&P 500. And another default in China’s property development sector as well as the possibility that the default by Sri Lanka is just the first sign of emerging market distress
March 7, 2021 | Daily JAM, Friday Trick or Trend |
Cash flows for emerging market stocks turned negative in the last week of February, according to the Institute for International Finance. Cash flows for emerging market debt turned negative last week. The data show daily outflows of $290 million in the last week. That compares to daily inflows of about $325 million in February.
January 9, 2020 | Morning Briefing, Volatility, You Might Have Missed |
Today in its semi-annual report Global Economic Prospect, the World Bank warned, again, of the risk of a new global debt crisis as a result of the biggest buildup in borrowing  in the past 50 years. Of the four waves of debt accumulation since the 1970s, the current...
July 21, 2014 | Daily JAM, Morning Briefing, Short Term |
Is it risk off time in the bond market? Looks like it so far in July as bond buyers are showing nervousness about junk bonds and debt from emerging market countries.
