Trader’s Narrative

The US financial system was resuscitated by the largess of the taxpayer. Without any real quid pro quo, transparency nor discussion, they were made whole. Their losses made public while their profits were guaranteed to remain private (as the recent obscene bonuses attest).
So now that the US economy is still on the ropes, fighting […]

The is an aggregate measure of the risks within the financial system. It incorporates yield spreads from money market, bond and equity markets. In one single number, it indicates the relative position of the current financial condition via the number of standard deviations from the average.
Similar to the TED spread, it peaked late last […]

Yesterday we looked at the strange behavior of US mutual fund holders in shunning equities and stampeding into bond funds. That lead to lively discussion with different comments on what this means. Leaving aside the various arguments on whether this is a good or bad omen for the stock market, let’s explore the US retail […]

One of the sophisticated investors I track is Jeremy Grantham of GMO. Back in 2007 he warned that the financial world was full of bubbles. The only asset class he liked then was an alternative one: timber.
He was right of course. Bubbles popped in the credit market, mortgages, real estate, the stock market, etc. […]

Late last week we got the latest figures from the Reuters/University of Michigan survey. Consumer sentiment continues to recover with the preliminary June 2009 number at 69% - compared to 68.7% for May 2009. The consensus of economists was for a larger recovery but there is no doubt that US consumer sentiment is slowly recovering […]