Blog Posts

Negative bond yields don’t make sense at first glance. Why would anyone pay somebody to hold their money for them? Normally when you put up a lump sum of cash to invest, you expect a return stream out of that in the future. It doesn’t seem prudent to see that pile of money decrease in […]

Let’s start with a basic trading principle: When one country slaps tariffs on another country’s tariffs that is bullish for the tariff-implementing country and bearish for the country on the receiving end of them. It is an external shock that reduces national income for the recipient. The ongoing trade conflict between the US and China […]

US dollar liquidity refers to the amount of dollars available in the commercial banking system. The US Federal Reserve lends dollars to other central banks through swap lines, which the commercial banks in those other countries can use as a funding source. Many traders believe the US dollar will decline in the coming months. Speculative […]

Cryptocurrencies are a fledgling asset class that has produced, and is continuing to produce, mainstream speculative interest. Their widespread run-up in price throughout 2017 brought large-scale public attention. However, whether you’re a day trader, active swing trader, or buy-and-hold investor, trading is a business. In order to trade well, you have to know asset classes […]

Gold is a type of shadow currency with a valuation proportional to currency and financial asset reserves in circulation divided by global gold reserves. Put another way, it can be considered the sum of a weighted average of the yields of all global financial assets relative to their volumes divided by the global gold stock. […]

This article was published on August 7, 2019 The Trump administration recently upped the ante on tariffs with China, putting another 10% rate on $300 billion worth of goods. A general trading principle is that whenever one country imposes tariffs on another country with a floating exchange rate, that’s an adverse shock that will cause […]

This article was published on August 7, 2019. Last Friday, the Wall Street Journal published a very important article regarding the rampant accounting fraud, financial reporting improprieties, and securities infractions that occurs in the Chinese capital markets. For many day traders, prop traders, and high-frequency algorithmic trading operations, fundamentals are often of secondary importance. However, […]

This article was published on July 31, 2019 The developed world is awash in low interest rates and is about to get rates that are even lower. Traders look heavily toward the US Federal Reserve and other central banks for clues on where asset markets will go. This has been covered in other posts on […]

The idea that computer- or algorithmic-driven trading (sometimes called ‘quant trading’) will drive out human traders, or at least make it extremely difficult for them to compete in the markets, is not new. Computers react to news and information within milliseconds that no human trader could ever do. For this reason, it’s practically impossible to […]

Risk should always be proportional to reward. Therefore, one of the most basic ways to determine whether market trends are sustainable is to look at the comparative yields between cash, bonds, and stocks. Stocks should provide a positive expected yield above bonds, and bonds should provide a positive expected return over cash, and by the […]