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Easing is Easy, Hiking is Hard

The recent weakness in major U.S. equity indexes (that now appears ready to continue for the fifth straight day) has surely not escaped the attention of Federal Reserve officials who have been attempting to “prepare markets” for the eventual end of super-accommodative monetary policy but, as shown below via this item at The Fiscal Times the other day, we’ve been down this road many times before since the 2008 financial crisis.

On a completely unrelated note, see this Friday Funny at that weighs in on the Ted Cruz presidential campaign announcement in The Next Political Messiah.

Here’s the chart from about half-way through a highly entertaining Ted talk (due in part to a Tennessee twang) given by hedge fund billionaire Paul Tudor Jones depicting where the U.S. stands on a measure of inequality via-a-vis social ills (go here for the entire clip).

It’s not clear how that left scale is calculated, by my guess is that the American obesity epidemic is what puts this nation off the chart.

Of course, the headlines that were generated from this talk had to do with how situations like those depicted in the chart are resolved and I’ve obliged in the title above.

Trend Following and Investment Losses

Given the relationship of the two data sets shown in graphic below that depict the fortunes (or lack thereof) of John Hussman’s Strategic Growth Fund (HSGFX) in recent years, the accompanying Wall Street Journal story ($) by Morgan Housel is surprisingly kind.

Of course, the bigger story here is really how investors chase performance and how trend following can lead to investment losses. Another important point is that Hussman is not necessarily wrong to be so bearish over the last six years – he might just be early and, over the long-haul, his approach may end up looking pretty good, as it did a decade ago.

Easing is Easy

Amid all the hoopla surrounding the Nasdaq Composite Index recapturing the 5,000 level for the first time since March 2000 and other stock indexes around the world notching fresh record highs, we are reminded that the world’s central banks have been quite busy in recent months, greasing the wheels, as detailed in this story at Bloomberg.

Not shown above, India just announced another rate cut today and, of course, Canada (also not shown, for some reason) has been slashing rates with another cut expected to come before the end of the week. Then there’s Denmark who, according to another report at Bloomberg, “can’t print money fast enough”.

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