Commentary
The Black Swan
A black swan has flown into the pond and joined the flock. Her name is Ebola. Black Swan Theory was introduced by Nassim Nicholas Taleb in his 2001 book “Fooled By Randomness“. Black swans are unexpected events outside of financial markets that are unanticipated, undirected or “random”, and are of large magnitude and consequence, possibly having a significant role in history. …
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The Road Ahead
During the last couple of weeks investors worldwide have been taking “risk off the table” (selling equities) due to a variety of factors, the foremost of which is the rising geopolitical tensions worldwide. Russian expansionism (Ukraine), radical Islamic Fundamentalism (ISIS), and the struggle for self-governance in Hong Kong are rattling worldwide markets. Ditto, for the Ebola virus, which many ascribe …
Read MoreTaking A Bow
In our blog post of October 23, 2013, titled “The Light At The End Of The Tunnel…”, we forecast a dramatic slowing of domestic economic growth over the fourth quarter of 2013, and the first quarter of 2014 to less than 1%. We were alone, or nearly alone, in this forecast of dramatic deceleration except perhaps for a few perpetual “bears” …
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Take A Xanax And See Me In About A Month…
Yesterday, the market had a particularly tough day. We here at Sachem Rock, believe worldwide markets may have finally started a “correction” in equity prices that we believe is overdue. Actually, last Friday was likely the day the market may have kicked off the correction that only a passage of time will confirm. In recent days, economic data has been …
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Has Anything Really Changed?
It has been five years and five months since the Financial Crisis of 2008, and we find ourselves still answering the same question from existing and prospective clients alike. “Has anything really changed? Of course, what they really mean is, “Has worldwide market risk decreased substantially since the last financial crisis”? So, for that answer, we would like to first …
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Bitcoins and Tulip Bulbs…
Someone asked me the other day, what I thought about bitcoins as a possible investment. I chuckled, and responded with only two words, “tulip bulbs”. While the real financial impact of “Tulip Mania” in mid-seventeenth century Holland is subject to widespread debate; it is undeniable that it was one of the most foolhardy examples of speculative excess in economic history. …
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Put Your Hands On The Desk Please!
In our last blog posted in October, we forecast a dramatic slowing of economic growth for US economy. We believed that ObamaCare, with its onslaught of higher premiums, deductibles, and taxes beginning on January 1, would adversely affect consumer expenditures during the critical holiday retail season. Our concern about fourth and first quarter GDP was predicated on declining consumer confidence …
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The Light at the End of the Tunnel…
After five years of sluggish US economic growth, last spring, we here at Sachem Rock believed we were seeing a “light at the end of the tunnel”. Our view that we were seeing “sunlight” at the end of the tunnel, was the result of the increasing strength of the US energy sector, the recovering US housing market, and the strengthening …
Read MoreBernanke On The “High Wire”
After talking about it for months, last Wednesday the Federal Reserve Chairman backed off from his decision to begin tapering of the Federal Reserve’s purchases of US Treasury debt. Could it have been political; we doubt it, since Bernanke has nothing to gain as President Obama has announced his term will end on February 1st of next year. Bernanke most …
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A Gusher of Hyperbole
Over the past couple of weeks, the price of West Texas Intermediate Crude Oil (“WTIC”), the benchmark for grades of crude oil sold in the United States, has declined from a recent high of $112.84 to a recent low of $79.71 (about 29%). Brent crude oil (“Brent”) has similarly declined from recent high of $115.71 to a recent low of $82.93. …
Read MorePosted on: 10-17-2014 Posted in: Market Commentary