Tag Archives: QE3

A Market Update and our thoughts…..Congrats to Donald “The Brain”

Many may blame the election results for the recent market movement, but this is not 100% true.  We would argue that the sugar induced (QE3)  market has run its course from the FOMC’s recent announcement and we are just now back to reality, and closer to fair value, by our estimate.

Here is a chart of the S&P 500:

Over the last several days, post-election, capital markets have been droopy and retreated slightly. It is worth taking note of our description,  “droopy” and “retreating” as the total market movement from the Bernanke “Juice is Lose” run is just 5% lower from its peak.

Markets can, and do, overshoot on the downside, just as they get too optimistic on the upside. The good news is they usually find their footing and these over reactions create opportunities for those willing to keep a steady hand.

Have a Great Day!

JK

PS Donald “The Brain” carded his first hole in one recently…congrats Donald we know your investment picks are as good as that swing…Well Done!

214-706-4300
http://www.jkfinancialinc.com
8222 Douglas Ave # 590
Dallas, TX 75225

The Race to the Race….

With Big Ben’s double barrel QE3 announcement over (a major surprise/disappointment to us), and the FOMC’s plans in motion, all eyes will turn to the Race to the Race….Presidential race that is, Tuesday November 6, 2012.

Our favorite two sites for getting probabilities on an election outcome are Intrade and Real Clear Politics.  Given the announcement last week the probabilities have increased for an incumbent win according to both sites. Here is the latest chart from Intrade.

According to Intrade above, there is a 67% chance of an incumbent win and according to Real Clear Politics about at 48% incumbent versus 45% for Romney win.  Of course in both cases these probabilities are just that, estimates and will certainly change over the coming Race to the Race.  We will keep you posted if the odds change again dramatically in either direction.

Have a Great Day!

JK

214-706-4300

http://www.jkfinancialinc.com

8222 Douglas Ave # 590

Dallas, TX 75225

More Cowbell Mr. Bernanke? and Stage 1 JK Technology Upgrade Complete

Today we will get the official answer….Did the Fed actually leak information to their respective favorite reporters last week and are planning on additional stimulus?

If they did not and are not planning on more “Cowbell” market participants may be disappointed. For that matter, it is highly likely market participants will turn negative on anything short of a major announcement, in our opinion.

“We have never seen that before!”

That is our most hated phrase regarding technology improvements and upgrades… especially when coming from those doing the upgrade. While we thwarted that phrase, our optimistic view of no hitches were not achieved. The conversion occurred prior to dark but well after the original scheduled time frame. Today we will hopefully feel we have a Tiger by the Tail with our new speed.

Next step, Phones…..this wil not occur until late August, we will share the adventure with you.

Have a Super Day!

JK

214-706-4300  http://www.jkfinancialinc.com

PS I will be traveling the coming two weeks.

To Print or Not To Print, That is the Question!

Today the FOMC concludes their latest two-day meeting, one in which no matter their decision, someone will be angry at them. (Hey, no one ever said this job would be easy!)

If the FOMC does not continue to “Twist and Shout” better known as operation twist (buying of longer term treasuries to twist the yield curve down i.e. longer term rates low) rates may begin to rise, making anyone who believes a 1.55% 10 year rate is too high, angry.

If the FOMC pulls the so-called punch bowl and let’s operation twist expire shortly, as it is scheduled, many will say the economy will falter as they believe it is too weak to sustain itself.

Here is a humorous take on the situation from Merk Investments.

We think there is a small possibility of a continuation of operation twist, however if we had our way, and our most logical outcome is to pull the punch bowl. (We can always bring it back later if ABSOLUTELY necessary.)

Have a Great Day!

JK

PS: After a failed family fishing trip yesterday (the fish were left very safe) I was able to spend a much greater time than usual reviewing the various media outlets last night. While we think there will be no extension and hope there will not be as well, we are in the 30% minority (70% opinion chance of continued printing estimated by most.)  We have always been contrarians!

214-706-4300  www.jkfinancialinc.com