By: R. Christopher Whalen

Housing & Mobility

New York | When William Clay Ford Jr., Chairman of Ford Motor Co. (NYSE:F), fired CEO Mark Fields earlier this year, he in part confirmed the view expressed in the book “Ford Men: From Inspiration to Enterprise,” that figuring out which supposed techno trend to believe (and invest in) will be a challenge. After surviving the automotive equivalent of nuclear winter in 2008-2011, Ford and the rest of the auto industry rebounded nicely in terms of sales and profits, peaking last year at 18 million

Bank Earnings & Fed Chairs

Earlier this week we appeared on CNBC’s “Squawk Box” to talk about bank earnings and the Fed.  The results from the top-four banks – Bank America (NYSE:BAC), JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C) – are really no surprise to readers of The IRA.  The largest banks all beat small on revenue and earnings, but showed weakness on fixed income and the mortgage banking lines. We suspect that there will be even more pain on the mortgage banking line for WFC, JPM and BAC

US Equities: Unwinding the Yellen Leveraged Buyout

“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing,”Citigroup CEO Chuck PrinceJuly 2007Watching new era car company Tesla (NASDAQ:TSLA) getting knocked down a couple of notches last week, it occurred to us that the Fed’s program of quantitative easing or “QE” amounts to a leveraged buyout (LBO) of the US equity markets.  How else can we explain TSLA, a firm whose financial performance

Do Stress Tests Help Bank Stocks?

Q: Are the annual stress tests good for bank stocks?Early in 2009, when the Federal Reserve Board began the annual exercise of “stress tests” for banks, confidence in the US financial institutions was nonexistent. The year before, Treasury Secretary Hank Paulson almost single handedly cratered the US economy by embracing the creation of a “Super SIV” to buy bad assets from the largest banks.  Paulson’s ill-considered comment told investors that US banks like Citigroup (NYSE:C) were insolvent. 

View from the Lake: Stress Tests & Tight Lines

The IRA is writing today from Camp Kotok, which is held each year at Leen’s Lodge in Grand Lake Stream, Maine.  We are in Washington County, which is on the border of New Brunswick, Canada, and about 200 miles north of Bangor up Rt 9.  This is Down East Maine, the land of Thoreau with rolling hills and lots of beautiful rivers and lakes.The conversation this year is much the same as the narrative on Wall Street, focused on the new records for asset values and questions about what happens next

Inflation Trade: AMZN + WFM

“Markets go up on an escalator, they come down on an elevator. This is the most hideously overvalued market in history.”David StockmanLast week’s action by the Fed was an effort to restore normalcy, but in the context of extraordinary action by the central bank. When you tell markets that the risk free rate is zero, it has profound implications for the cost of debt and equity, and resulting in different asset allocation decisions.  Ending this regime also has profound implications for investors.