Financial Engineering

08 Nov
Is Everything Now Too Big To Fail?
Today, we’ll discuss how the “too big to fail” concept has evolved since it was first used back in 1984.

The U.S. stock market to pension funds relation shows that even the stock market is simply too big to fail.

In Europe, the situation is even worse. Everything there is too big to fail, from countries to corporations to junk bonds.

Introduction

“Too big to fail” is a concept that you probably recognize from the 2009 financial crisis when many corporations, particularly financial institutions, were considered too big to fail due to the negative impact their demise would have on the whole economic system.

In order to prevent massive negative effects on the economy, and also to prevent a 1930s depression-style situation, governments intervened and bailed out the distressed assets. More →
By Sven Carlin Banks Bonds Central Banks FED Financial Engineering Inflation Interest Rates Investiv Daily Stocks US Economy
11 Sep
Out Of This World Debt Levels Will Damn Future Generations
Debt levels are the key driver of economic growth in developed countries. So keep an eye on debt.

The velocity of money, household debt, car loans and sales aren’t telling a good story.

Globally, the situation isn’t much better. However, there are a few exceptions.

Introduction

In today’s article, I’ll analyze the current global debt environment.

Debt is an economic factor that is unwatched as long as things are going well but as soon at things turn south, everyone will be screaming about a debt crisis and the end of the financial world as we know it.

Given this, it’s extremely important to know what is going on, how sustainable the current debt levels are, what the impact of debt on the economy is, how to position your portfolio, and perhaps even how to take advantage of potential black swans arising from future debt instabilities. More →
By Sven Carlin Auto Industry Bank of Japan Central Banks China Debt Emerging Markets European Union FED Financial Engineering Global Risks Inflation Interest Rates Investiv Daily Market Forecast Monetary Easing Recession US Economy
08 Aug
Are Stocks & Bonds In A Bubble? Sven Thinks So…
Earnings have been growing in the last 12 months, but haven’t grown that much over the last 20 years.

Even the Swiss central bank owns almost $3 billion worth of Apple’s stock.

After the dot-com and the housing bubbles, school books will talk about the central bank bubble in the future.

Introduction

All we see right now is the stock market continuing to go up. The S&P 500 is already up 9.7% year to date, and there is no sign that the trend might weaken or reverse. Over the last 8 and a half years, the index is up 242%. More →
By Sven Carlin Bank of Japan Banks Central Banks Corporate Earnings ECB FED Financial Engineering Inflation Interest Rates Investiv Daily
20 Mar
Is This The Beginning Of The End For The Era Of Financial Engineering?
Most developed world economies can’t continue to grow without financial engineering.

However, inflation forced tightening will eventually have a significant impact on credit.

This will only lead to more accommodation and toward an eventual crash, so be prepared.

Introduction

Each significant historical bear market has an initial trigger. Weak home and car sales killed the 2003 – 2007 bull market, while the realization that stock valuations had gone too far initiated the bear market in March 2000.

But what will trigger the next bear market? Well, there’s a great possibility that it will be monetary tightening. Perhaps it won’t be the latest quarter percentage point rate increase, but it will probably be one of the next rate hikes. More →
By Sven Carlin Bear Market Credit Cycle FED Financial Engineering Inflation Interest Rates Investiv Daily US Economy