January 2015 - Forecasts & Trends

Forecasts & Trends is much more than just investment blog posts. You need to know the "big picture;" you need to have a "world view," especially in the post-911 world; and you need more information than ever before to be successful in meeting your financial goals. Gary intends to help you do just that.

Forecasts & Trends

Blog Subscription Form

  • Email Notifications
    Go

Archives

  • European Central Bank Embraces QE, For Better Or Worse

    Last Thursday, the European Central Bank (ECB) announced the much-anticipated launch of a sovereign bond buying program at the rate of €60 billion ($70 billion) per month known as “quantitative easing.” The ECB's QE program could be as much as one trillion euros over the next two years. The ECB said the purpose for the larger than expected QE effort is to head-off deflation and stimulate the struggling Eurozone economy.

    It remains to be seen, however, whether the bond buying program will actually achieve its goals. It certainly hasn't worked as expected in the US, the UK or Japan. There are in fact some reasons to believe that QE will face even stronger headwinds in Europe, not to mention that the program is likely to devalue the Eurodollar which is already in freefall. We will look at all of these issues and more as we go along today.

    Despite the benefits of sharply lower energy prices, two international organizations revised their global growth forecasts lower last week. The International Monetary Fund and the World Bank both reduced their growth forecasts for 2015 and 2016. While both organizations still expect global growth above 3% overall this year, they are becoming more concerned about recessions in Europe, South America and elsewhere. Details to follow.

    ...
  • Swiss Franc’s Surge = Chaos In Global Currency Markets

    Last Thursday, the Swiss National Bank stunned the financial world by decoupling the Swiss franc from the euro. This surprise move sent the franc up almost 40% against the euro in one day, although it didn’t close that high (up 19%). Nevertheless, many currency traders, banks and brokerages were left with devastating losses. I’ll give you the details below.

    But first, let’s take a look at the recent US economic data which has been disappointing overall. Following the stronger than expected GDP growth of 5% (annual rate) in the 3Q, the US economy seemed to stumble a bit in the 4Q. We’ll cover the latest reports before shifting our attention to Europe and Switzerland in particular.

    ...
    Filed under: ,
  • Is The US Treasury Market Rigged? Some Say Yes

    The last time federal regulators took a hard look at how Wall Street banks and brokers trade US Treasury securities – the largest bond market on the planet by a longshot – a little company called Google Inc. was just starting out.

    That was 1998, and the technological leaps since then – including ones that are now transforming bond markets – have left government regulators in the dust. In particular, executives from three of the biggest market-making firms in Treasuries say an electronic bait-and-switch tactic known as “spoofing,” – which is already the focus of a manipulation allegation at a major futures exchange – needs to be investigated in cash Treasuries (OTC, etc.) and related futures.

    Rules first enacted in 1986 that have gone virtually untouched since then are allowing certain high-tech firms to outmaneuver less-savvy rivals and are manipulating bond prices. They say a lack of cohesive regulation and technology to monitor “high-frequency traders” is making the world’s biggest government bond market more dangerous for everyone.

    Today I am reprinting an eye-opening article that appeared in Bloomberg/Businessweek on December 11 on the subject of manipulation in the Treasury market. Since then, I’ve seen no one else touch it. I’ve googled this subject dozens of ways… and very little on this topic comes up.You can read it yourself, and I think you will find it very interesting and troubling.

    ...
    Filed under: ,
  • Economic Optimism Abounds As Crude Oil Plunges

    Each year at this time, we see a plethora of fresh forecasts for the New Year, and this year is certainly no exception, especially with the recent implosion in oil prices. There is widespread agreement that sharply lower energy prices will provide a boost to the global economy this year, especially for oil-importing nations including the US.

    As a result, almost all of the New Year forecasts that I have seen in recent days have been upbeat and revised higher with regard to the US economy. With that in mind, I thought it would be a good idea today to revisit the recent developments in the oil and energy markets over the last six months. What we have witnessed since last summer has been nothing short of breath-taking, to say the least!

    ...
    Filed under: , ,