volatility

Can February’s Selloff Cause A Recession?

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Reading Time: 5 minutes The stock market sold off 10% in early February, leaving some investors panicked as they hadn’t seen a selloff in well over a year. Stocks were in a record streak without a 3% and 5% decline. Stock market declines of at least 10% happen every 357 trading days, so this…CONTINUE READING

Can Stock Market Decline Trigger A Recession?

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Reading Time: 5 minutes While the economy and earnings usually catalyze crashes in the stock market, this cycle is unique because the bubble is in stocks as a whole, not a sector of the economy. It’s different from the 1990s tech bubble, because this appreciation is broad based, opposed to the 1990s when speculation…CONTINUE READING

Return on Equity (ROE) Hits Record Low

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Reading Time: 5 minutes Speculation In Stocks With interest rates falling, speculation into anything which promises a high return is in vogue. The Trump Trade promised a higher yield environment, but that ended in early March. The 10-year yield has fallen from 2.64% to 2.16%. Even at the recent peak in yields, interest rates…CONTINUE READING

Net Debt Is Increasing Faster Than EBITDA

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Reading Time: 5 minutes The drug Wall Street is addicted to is debt. Like a drug addict, Wall Street needs an intervention to solve this problem. Usually interventions occur in the form of a deleveraging which is caused by an increase in default rates and rate hikes by the Fed. Although the Fed delayed…CONTINUE READING

Corporate Debt Highest Ever – What Does It Mean?

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Reading Time: 6 minutes In previous articles, the groundwork for how the current financial bubble was created has been explained. You can read them here, here, or here. To summarize, central banks have collectively pumped trillions of dollars into the system by buying assets. This lowered fixed income yields to record low levels. There…CONTINUE READING