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Since the spring of 1994 I have worked on the fact that the secular downward trend in long-term yield would, at some point, bring a market crash.
I have resolved the famous Greenspan Conundrum as I discovered that long-term yields decrease with the increase of income/wealth gap. Hence income distribution is an important factor of macro economic development.
I have developed a model of the yield curve that describe long-term yields as options on shorter term yields.
My conclusion was that when a "inverted' yield curve, as it would necessary be, would return to its fair value it will trigger a market crash which under the circumstances of a 0% short-term interest would be of major consequences.
OpEd News Member for 773 week(s) and 5 day(s)
16 Articles, 0 Quick Links, 32 Comments, 5 Diaries, 1 Polls
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Friday, October 1, 2010
The Legends of Quantitative Easing Numerous people are worried by Quantitative Easing but obviously most don't understand exactly what it really means and what are the risks. Those risks are more formidable than commonly thought
Friday, October 1, 2010The Legends of Quantitative Easing Numerous people are worried by Quantitative Easing but obviously most don't understand exactly what it really means and what are the risks. Those risks are more formidable than commonly thought
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Friday, October 1, 2010
If It Costs 0, It Is Worth ... Now we have been for more than 18 month under the regime of the 0% target discount rate. We have injected trillions of money that never were translated in long-term investments. We must draw the conclusions now and those are straightforward. If the risk free rate is 0% it means that there is no individual or social value of incremental investments. It means simply that we have too much of them.
Friday, October 1, 2010If It Costs 0, It Is Worth ... Now we have been for more than 18 month under the regime of the 0% target discount rate. We have injected trillions of money that never were translated in long-term investments. We must draw the conclusions now and those are straightforward. If the risk free rate is 0% it means that there is no individual or social value of incremental investments. It means simply that we have too much of them.
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Sunday, September 26, 2010
Tract on Monetary Reform: Credit Credit is Like Nostalgia: It is prone to slowly lead to procrastination and prevent us to go forward!
Sunday, September 26, 2010Tract on Monetary Reform: Credit Credit is Like Nostalgia: It is prone to slowly lead to procrastination and prevent us to go forward!
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Monday, September 20, 2010
An Innovative Credit Free, Free Market Post Crash Economy Our economy is slowly dying. No one is proposing a solution because no one has the slightest idea of why it is happening. However an objective observation of the phenomenon can help us understand the phenomenon and provide us with an innovative solution. Of course we can't solve the problem with the tools that brought us there in the first place and we need a new ideology.
Monday, September 20, 2010An Innovative Credit Free, Free Market Post Crash Economy Our economy is slowly dying. No one is proposing a solution because no one has the slightest idea of why it is happening. However an objective observation of the phenomenon can help us understand the phenomenon and provide us with an innovative solution. Of course we can't solve the problem with the tools that brought us there in the first place and we need a new ideology.
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Friday, September 17, 2010
Is the FOMC Playing the Stock Market? Technical analysis and fundamental analysis point to purchase by the Fed of equities. Those being circumstantial evidences it sounded like a conspiracy theory. Now we received an insider view that says it is actually happening.
Friday, September 17, 2010Is the FOMC Playing the Stock Market? Technical analysis and fundamental analysis point to purchase by the Fed of equities. Those being circumstantial evidences it sounded like a conspiracy theory. Now we received an insider view that says it is actually happening.
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Sunday, September 12, 2010
TWIST Again: Market Crash Cheap Date. As I told since August 24th the yield curve is now subject to a swift twist from a low undervalued configuration to its normal configuration. The strategic background article for the tactic I present here can be found at Operation TWIST Again. People who follow my lead have sold all their long term assets since, at least Oct 8th. Now I am showing them how they can profit from that forecasted crash.
Sunday, September 12, 2010TWIST Again: Market Crash Cheap Date. As I told since August 24th the yield curve is now subject to a swift twist from a low undervalued configuration to its normal configuration. The strategic background article for the tactic I present here can be found at Operation TWIST Again. People who follow my lead have sold all their long term assets since, at least Oct 8th. Now I am showing them how they can profit from that forecasted crash.
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Sunday, September 12, 2010
Operation TWIST Again: Psychiatry of a Market Crash The Market Crash being a switch from a period ofIrrational Exuberance to a period of Deep Depression I decided to tryto draw a parallel between a collective bipolar disorder in order topredict the occurrence of a Market Crash, the stage of the switchbetween a maniac state to a depressive state.
Sunday, September 12, 2010Operation TWIST Again: Psychiatry of a Market Crash The Market Crash being a switch from a period ofIrrational Exuberance to a period of Deep Depression I decided to tryto draw a parallel between a collective bipolar disorder in order topredict the occurrence of a Market Crash, the stage of the switchbetween a maniac state to a depressive state.
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Monday, September 6, 2010
Giving Tempo to the TWIST. What I like when trading is to have strong technical analysis entry point or a good fundamental analysis backing. If I have both I am ecstatic. Technical analysis must be agreed upon and make a buzz to work. We have that with the Hindenburg Omen. In order to have a useful fundamental analysis we need to have something original that the market is not aware of already or better misinterpreted. Now we want to time it.
Monday, September 6, 2010Giving Tempo to the TWIST. What I like when trading is to have strong technical analysis entry point or a good fundamental analysis backing. If I have both I am ecstatic. Technical analysis must be agreed upon and make a buzz to work. We have that with the Hindenburg Omen. In order to have a useful fundamental analysis we need to have something original that the market is not aware of already or better misinterpreted. Now we want to time it.
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Saturday, September 4, 2010
The Yield Curve Twists Again As I explained in my article "The Yield Curve Twist Omen" long-term yields have been undervalued for an extended period of time. Although that undervaluation can last an extended period of time once the arbitrage has started it can reach its fair value in a very quickly. This article is meant to bring further evidences of the fact that this Twist is in the making. I have called since August 24th The Nemesis of Long-Term Yields
Saturday, September 4, 2010The Yield Curve Twists Again As I explained in my article "The Yield Curve Twist Omen" long-term yields have been undervalued for an extended period of time. Although that undervaluation can last an extended period of time once the arbitrage has started it can reach its fair value in a very quickly. This article is meant to bring further evidences of the fact that this Twist is in the making. I have called since August 24th The Nemesis of Long-Term Yields
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Friday, September 3, 2010
Timing of the Omen of a Financial Nemesis : FND - 8. The information within this article concerning Financial Markets is for informational purposes and do constitute a strong advise to sell securities. This article contains all you need to know about price movements on fixed rates, stock indices, minerals (oil, precious metals, and base metals) for the next 3 weeks.
Friday, September 3, 2010Timing of the Omen of a Financial Nemesis : FND - 8. The information within this article concerning Financial Markets is for informational purposes and do constitute a strong advise to sell securities. This article contains all you need to know about price movements on fixed rates, stock indices, minerals (oil, precious metals, and base metals) for the next 3 weeks.
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Thursday, September 2, 2010
Hindenburg Omen Misconceptions The Hindenburg Omen is buzz on Wall Street since it occurred on August 12th, 2010 and August 20th, 2010. My purpose is not to check its statistical value as a lot of technical analyst have already done that and they almost all agree on the conclusion. My purpose here is to explain what those mean in term of decision making and second to put that in perspective by introducing another data the shape of the yield curve.
Thursday, September 2, 2010Hindenburg Omen Misconceptions The Hindenburg Omen is buzz on Wall Street since it occurred on August 12th, 2010 and August 20th, 2010. My purpose is not to check its statistical value as a lot of technical analyst have already done that and they almost all agree on the conclusion. My purpose here is to explain what those mean in term of decision making and second to put that in perspective by introducing another data the shape of the yield curve.
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Thursday, September 2, 2010
The Yield Curve Twist Omen Any Crash we have witnessed have been the result of the yield curve suddenly returning from undervalued to normal. That was true for the "sub prime crisis" as it was for any other crash in history. It is the only way to account for a discontinuity in stock market value. If for other crash the easy cure was to lower short term rate, this time it will be, of course, impossible.
Thursday, September 2, 2010The Yield Curve Twist Omen Any Crash we have witnessed have been the result of the yield curve suddenly returning from undervalued to normal. That was true for the "sub prime crisis" as it was for any other crash in history. It is the only way to account for a discontinuity in stock market value. If for other crash the easy cure was to lower short term rate, this time it will be, of course, impossible.
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Sunday, August 29, 2010
Twist n' Shout: It's a Trap! This article is meant to be an update, follow up or even better, let's not be shy about it, brag on the article I call my closing argument for the market crash: Bonds Hammer Bernanke at Jackson Hole. The information within this article concerning Financial Markets is for informational purposes and do constitute a strong advise to sell securities. This article contains all you need to know about prices on financial markets.
Sunday, August 29, 2010Twist n' Shout: It's a Trap! This article is meant to be an update, follow up or even better, let's not be shy about it, brag on the article I call my closing argument for the market crash: Bonds Hammer Bernanke at Jackson Hole. The information within this article concerning Financial Markets is for informational purposes and do constitute a strong advise to sell securities. This article contains all you need to know about prices on financial markets.
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Friday, August 27, 2010
Bonds Hammer Bernanke at Jackson Hole I want here to show that the speech of Ben S. Bernanke in Jackson Hole on Friday will have a formidable effect on credit markets, debt instruments and specially on junk bonds. This is probably the most important paper I ever wrote since my article (in French) in le Brognart a defunct weekly for Paris finance professional: "La Bonde du Jacuzzi." Let's call it my closing argument before the jury gets out on Sept. 9th
Friday, August 27, 2010Bonds Hammer Bernanke at Jackson Hole I want here to show that the speech of Ben S. Bernanke in Jackson Hole on Friday will have a formidable effect on credit markets, debt instruments and specially on junk bonds. This is probably the most important paper I ever wrote since my article (in French) in le Brognart a defunct weekly for Paris finance professional: "La Bonde du Jacuzzi." Let's call it my closing argument before the jury gets out on Sept. 9th
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Sunday, June 27, 2010
Quadruple Witching Hour - Chaos After the Market Crash? After the market crash Chaos will necessarily follow: social and political turmoil, military adventures, racism and xenophobia... All the evils the world has already experienced after Black Thursday in 1929. The Deep Depression is not a fatality. Act before September 9th.
Sunday, June 27, 2010Quadruple Witching Hour - Chaos After the Market Crash? After the market crash Chaos will necessarily follow: social and political turmoil, military adventures, racism and xenophobia... All the evils the world has already experienced after Black Thursday in 1929. The Deep Depression is not a fatality. Act before September 9th.
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Wednesday, March 10, 2010
2012 The Mayan Calendar Scam. Explains why the Mayan calendar scam is meant to cause a Stock Market Crash.
Wednesday, March 10, 20102012 The Mayan Calendar Scam. Explains why the Mayan calendar scam is meant to cause a Stock Market Crash.
