A Journal of Independent Research, Analysis,
 Opinion and Insight

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A Wealth of Values
Jon & Mark Boyar On the Upside of the Downside; Opportunity, Cheap
Make no mistake about it, the scale of the wealth evisceration visited on the U.S. stock market in the first half’s almost all-encompassing retreat was prodigious, ($9 trillion by the FT’s reckoning), with only a few inflation/commodities-linked securities eking out gains over the six months. And the unsparing downslide, as is the wont of such ursine beasts, was as precipitous as it was sickeningly severe. 

Is it over? No one knows.

Recession Has Arrived
The Labor Market Is Next Shoe To Drop
7/29/22 8:00 AM
By Dave Rosenberg
US real GDP came in at -0.9% at an annual rate in Q2, below consensus views of +0.4% but right in line with our estimate. This follows the -1.6% contraction in Q1.

Investors Capitulated —
So Much That Now They Are Bullish? Don’t Buy It!
7/29/22 7:00 AM
By Dan Suzuki
We’ve all heard the famous Yogi Berra quote, “Nobody goes there anymore. It’s too crowded.” Investors today seem jazzed up on an opposite but similarly absurd concept: Wall Street thinks it’s a huge buying opportunity because everybody’s too bearish.

The Bear’s Other Shoe
Falling Earnings Expectations May Be Next Risk Driver
7/29/22 6:00 AM
By Scott Opsal
To paraphrase that great market historian Leo Tolstoy, “each bear market is unhappy in its own way.” Recession, interest rates, valuation bubbles, inflation, war, credit cycles, oil prices, manias & panics: the tipping point that triggers each bear market is always different. However, bearish forces ultimately manifest themselves in just two ways; declining earnings and/or declining valuations.

The Great Normalization
Pandemic’s Economic Distortions Drifting Into Slowdown?
7/29/22 5:00 AM
By John Osterweis and Larry Cordisco
The S&P 500 struggled again in the second quarter, falling by more than 16% and leaving the index down nearly 20% for the year — its worst first half since 1962. While there are several reasons for the market’s poor performance, including rising inflation, Fed tightening, and fears of a recession, we think the overarching explanation is the unwinding of the Covid economy, a process that we call “The Great Normalization.” The pandemic created several distinct but related economic distortions, including excess liquidity, abnormally strong demand, and unusually low interest rates, and each one is in the process of finding a new equilibrium in real time.

“Tedious Manual Labor”
Fills In 100-Year Gap In Data On Black/White Wealth Disparity
7/29/22 4:00 AM
By Philippa Dunne and Doug Henwood
Amid all the shiny new things, ecologists continue to dig through old records to build histories of change over time. Climate scientists study the field notes of field biologists like Edgar Mearns, Ernest Thompson Seton, and Ralph Waldo Emerson to track, for example, changes in bloom times brought on by climate change.

A Study In Conflicts
Here’s How HFT Lobby’s Latest Whitewash Came Together
7/29/22 3:00 AM
By Joe Saluzzi
Industry lobbyists are very good at spinning words and data in a way that makes it easy for policy makers to digest. They usually know exactly which buttons to push to either defend the status quo or to lobby for a rule change that would benefit their clients.

Keying On EPS
Ranting At The Fed
7/29/22 8:20 AM
By Blaze Tankersley
Market prices move about as you would expect, now clearing the 50dMA to follow up on Tuesday’s bullish breadth thrust. We were able to close over the 5/12 observation I have marked as the “internal low” which is generally constructive action. [More]

Rolling Over Soon
10-Year T-Note Yield Pointing Lower
7/29/22 7:20 AM
By Andrew Addison
The 10-Year T-NOTE YIELD is beginning to roll over to the downside. On the daily chart you can see the bearish reversal to the downside  that occurred at the 21-day moving average (arrow). [More]

Wealth Of Two Nations
The U.S. Racial Wealth Gap, 1860-2020
7/29/22 8:00 AM
By Ellora Derenoncourt, Chi Hyun Kim, Moritz Kuhn and Moritz Schularick
The racial wealth gap is the largest of the economic disparities between Black and white Americans, with a white-to-Black per capita wealth ratio of 6 to 1. [More]

Hall Of Mirrors
How Consumers Think About Inflation
7/29/22 7:00 AM
By Carlo Pizzinelli
With inflation rising to levels unseen in decades, households across the world are asking themselves how much more they can expect to pay for gasoline, groceries, and other necessities. [More]

Sharing Gas Pains
Market Size & Russian Supply Disruptions In The EU
7/29/22 6:00 AM
By Silvia Albrizio, John C Bluedorn, Christoffer Koch, Andrea Pescatori and Martin Stuermer
We assess the supply-side effects on European Union (EU) economic activity if Russian gas imports were to suddenly cease. [More]

Germany’s Exposure
Where Putin’s Gas Shutoff Will Be Felt
7/29/22 5:00 AM
By Ting Lan, Galen Sher and Jing Zhou
We analyze the potential impacts on the German economy of a complete and permanent shutoff of the remaining Russian natural gas supplies to Europe, accounting for the curtailment of flows through Nord Stream 1 that has already taken place. [More]

Natural Gas In Europe
The Potential Economic Impact Of Disruptions To Supply
7/29/22 4:00 AM
By Gabriel Di Bella, Mark J Flanagan, Karim Foda, Svitlana Maslova, Alex Pienkowski, Martin Stuermer, Frederik G Toscani
This paper analyzes the implications of disruptions in Russian gas for Europe’s balances and economic output. [More]

Acute Observations, July 29, 2022
Perceptive Commentary from July 1-29, 2022
7/29/22 8:00 AM
David Rosenberg
As markets were expecting, the funds rate was hiked 75 basis points again, to a 2.25-2.5% range... but the tone of the press release immediately started out more bleak, as the Fed flagged slowing spending and production activity.

Let’s just say, the central bank is becoming more circumspect.