Super accommodative monetary policy has been necessary to spur economic recovery and ensure markets don’t fall into a deflationary spiral. But these same policies which have kept interest rates at record lows for so long are creating vulnerabilities in the economy as debt levels continue to rise. http://www.seasoninvestments.com/insights/the-perils-of-low-volatility/
Last Friday we caught a glimpse of the extent to which financial markets are still addicted to monetary stimulus when stocks, bonds and commodities all tumbled in response to comments made by Fed officials. When everything is grinding upward, moving All Together Now is not a problem, but that sentiment changes quickly when asset classes begin to nosedive in tandem. http://www.seasoninvestments.com/insights/all-together-now/
As any casual NBA fan already knows, Kevin Durant was in the news last week with his decision to leave the OKC Thunder for this year's NBA Finals runner-up Golden State Warriors. His decision to abandon his team in order to join a rival was seen as a betrayal to say the least. Why is this move becoming more common place in the NBA? http://www.seasoninvestments.com/insights/plight-of-an-nba-superstar/
Back in 2007 Warren Buffett issued a public challenge that the S&P 500 would outperform any basket of hedge funds. Hedge fund manager Ted Seides with Protege Partners took Buffett up on his challenge and "the Bet" was born. Now eight years into the bet, who is winning and what can we learn from it? http://www.seasoninvestments.com/insights/buffetts-bet/
We are now entering a new phase of the Fed cycle. After nearly seven years of zero percent interest rates we are finally on the precipice of an interest rate increase. In light of this, we thought now would be a good time to dig into what all this rate hike talk really means. http://www.seasoninvestments.com/insights/what-is-a-rate-hike-anyway/
The market’s reaction to the strong jobs’ report on Friday was not pretty. About the only investment that was green on the day was the US dollar. The problem the Fed now faces is whether or not to raise rates under the deflationary pressure of a strong currency and lackluster growth in other developed countries. http://www.seasoninvestments.com/insights/fasten-your-seatbelts/
Now that the Fed’s third, and supposedly final, round of QE is concluded, the next step is to begin reversing its zero interest rate policy by making short-term interest rate hikes. Predicting when the first rate hike will take place, despite being a near impossible task as we will show, has been the source of endless discussion in the financial media in recent months. http://www.seasoninvestments.com/insights/not-here-yet/
You lend the government money for ten years, and in return they’ll offer you a yield just barely high enough to cover expected inflation over that time period. Sure, you might not gain any real ground, but at least you won’t be losing purchasing power. How does that sound? Are you ready to buy a lost decade? http://www.seasoninvestments.com/insights/lost-decade-for-sale/
Last Thursday the Swiss National Bank (SNB) surprised the market by announcing that it would no longer peg the value of the Swiss Franc to the Euro. The news sent the Franc soaring against the Euro while the Swiss stock market cratered. This week we look at the reasons for the peg, why it may have ended so abruptly, and what it all means for our US-based clients. http://www.seasoninvestments.com/insights/swiss-surprise/
There are myriad reasons for the recent strength in our currency, but one of the simplest explanations is that despite its problems the US Dollar is still the “cleanest dirty shirt in the closet”. The fact of the matter is that the headwinds of over-indebtedness, soft labor trends and anemic private sector growth are not at all unique to the United States. http://www.seasoninvestments.com/insights/the-cleanest-dirty-shirt/
With quantitative easing on its way out, the next important step from US policy makers will be to signal to the markets that they are ready to begin raising interest rates. Across the pond in Europe the situation is quite different, and monetary policy appears poised to move in the opposite direction as the US. http://www.seasoninvestments.com/insights/opposite-directions/
Janet Yellen is presenting the first of two days of testimony to Congress in which the Federal Reserve Chair will deliver prepared comments that is followed by grueling questioning. All eyes and ears are fixed on any additional guidance and insight Ms. Yellen might provide into when and how the FOMC might begin to shift its policies. http://www.seasoninvestments.com/insights/an-update-on-the-fed/
Our Monthly Macro is a recurring post that appears on the first Tuesday of every month and recaps the high level macro developments of the previous month. This month’s piece will focus on the poor start to the year for stocks, Bernanke’s last move as Fed chairman and the growing belief in the global economic recovery. http://www.seasoninvestments.com/insights/monthly-macro-passing-the-baton/
Last year was not a pretty year for gold. The spot price of fell almost 28% making it the second worst year for since Nixon took the US completely off the gold standard in 1971. This has led many to question the merits of investing in gold. So what does this mean for gold and its roll in a diversified portfolio? http://www.seasoninvestments.com/insights/the-barbarous-relic/
