Articles by Clive Hale

A picture is worth a thousand words

Well OK charts not pictures, but getting a visual fix on the markets is helpful for some of us. For others technical analysis is akin to astrology or witchcraft, but I prefer to think of it as an aid to behavioural psychology and we all need help on that front. Doug Kass has an interesting way of summing up the debate. A technical analyst and a fundamental analyst are chatting about the markets in the kitchen. One of them accidentally knocks a kitchen knife off of the table, and it lands right in the fundamental analyst’s foot. The fundamental analyst yells at the technician, asking him why he didn’t catch the…


January 24th 2016…The Big Short?

Last week saw the opening in the UK of the movie of the same name. It is a must see for market historians as well as diviners of the future. It will remind us of the abject greed, arrogance and unremitting belief in a system that was in fact falling apart; in other words denial was the theme, unobserved by the many. The few were laughed out of court until the dénouement. Is history, in its own peculiar way, repeating itself? The movie ends with the observation that there are now more open CDS contracts than there ever were leading up to the “great” financial crisis. There is also significantly more corporate…


January 8th 2016…Technical update after an “interesting” week

The year has started with the worst week ever for the S&P 500. This update considers what might be in store for the rest of the year. We recommend clicking here to access the full version with charts that are referred to in the text. A 6% fall in 5 days for the S&P 500 is the worst start to a year in the US…ever. In the great scheme of things this is a completely meaningless statistic, but, taken along with recent market action, could there be some genuine cause for concern? Looking firstly at the UK (page 3), there is something of a line in the sand at 6,000….


December 23rd 2015…Not another forecast

At this time of year tradition dictates that we peer into the future and pretend that we have the foggiest idea about what is coming down the track. Those with the courage to look in the rear view mirror find they may have got a few of last year’s guesses right and those that don’t…well they just keep on guessing. Here is an interesting observation from Macro Man – http://macro-man.blogspot.com – I had to laugh when Yellen said that she “wasn’t aware of a better model” for forecasting inflation….because I wasn’t aware of a worse one! The Fed’s inflation forecasting track record is, to put it bluntly, appalling. If you…


November 28th 2015…Watching and waiting

There’s a title of a song in there somewhere, but we watch and wait upon the ECB and the Fed, which is of course a song and a dance routine. It is widely accepted that everyone knows that everyone else knows that the central banks are not going to let anything untoward happen to the markets. This “belief” started with the Greenspan “put”, morphed seamlessly into the Bernanke “put” and until recently to the Yellen “put”. The present Chairwoman has had her work cut out to maintain the Fed’s credibility as Masters of the Universe, but it does seem that at long last she is about to lay an egg…


November 9th 2015…My name is Bond

Bond has been on my mind a lot of late but, unlike many people, it is not the Daniel Craig film but the horror movie – or perhaps the comedy of errors – that is the fixed income sector I have been watching through my fingers. This world is not full of fast cars and vodka martinis – well, perhaps for a few of the fund managers it might be – but the rather more mundane considerations of duration, liquidity and the direction and timing of interest moves. The numbers of actors who have played 007 on-screen may be growing but it has nothing on the fixed income cast-list. In…


October 5th 2015…History never repeats

It is not totally clear that Mark Twain ever penned these words and forgive me for using another hackneyed cliche, but it feels like deja vu all over again. The financial crisis from which we are recovering / have recovered depending on which government / talking heads mouthpiece you might care to listen to was preceded by increasing levels of corporate malfeasance, an ever burgeoning level of debt and a laisser faire attitude to problems of global conflict, stock market exuberance, “unfathomable” financial complexity – the junk bond complex – and central bank indifference (Bernanke – “the sub prime crisis has been contained” – “there is no bubble in the…


A bear in a China shop – September 7th 2015

The traditionally quiet month of August, when all good city folk should be sunning themselves on the Riviera, has exploded into action. Now that we have high frequency traders running the show, allegedly supplying liquidity, which must be one of the biggest jokes perpetrated on a largely unsuspecting investment community, volatility has been eye watering. From the 23rd to the 28th the Dow Jones Industrial Average moved up and down by a total of 5,612 points! It has been the same story in commodities, notably oil where Brent crude started the week around $46 a barrel got down as low as $42 and then traded above $50. Bond markets usually…


Greece isn’t fixed…by a long way – August 12th 2015

Click here to get PDF download Don’t take my word for it. Here are four opinions that come to the same conclusion; the euronauts are living in cloud cuckoo land. ‘It seems to us that the plan rests on initial forecasts for the economy and public finances which are little short of fantasy. Recent survey evidence suggests that the economic impact of capital controls has been catastrophic, with measures of activity collapsing to levels way below those seen even when the economy was contracting at annual rates of 9pc in 2010-11. Of course, such extreme weakness may end when the controls are lifted. But it is not clear that will be…


A summer trio; Greece isn’t fixed, the Fed is in a fix and gold is being “fixed” – August 10th 2015

Click here to get PDF download It’s summer and it’s August; the month when even the Eurocrats take a break. And so the illusion that Greece is fixed is maintained. Here are some assumptions dangerous or otherwise – The current total accumulated bailout for Greece is €326 billion Greek GDP will remain at €216 billion Interest rate on the bailout will be 0% Greece can immediately achieve a surplus of 3% of GDP Greece will hold that 3% surplus for as long as it takes to pay back €326 billion  Every penny of Greek debt surplus will go to pay back creditors Now let’s have a look at the maths courtesy…