Markets and Trading
Buy Ebola, Sell the Fed
The stock market began to recover from its recent selloff as initial ebola fears abated. Meanwhile bond markets remained strong.
Conclusions? The fed-fueled bubble bull market in stocks isn’t over. Ebola won’t kill us all. Future Ebola outbreaks will have to be much more severe to generate market reactions of similar magnitude. (Corollary: The next Ebola-inspired market selloff will be a buying opportunity, and thus may not happen.)
Caveats. Watch for a govt bond selloff, perhaps as a result of unexpected events. The entire financial world has been watching for this for the past several years. It could happen in two weeks or two years, but it will happen eventually.
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Disclaimer: This is not investment advice. You would be crazy to listen to me and probably shouldn’t even be reading this, as I have predicted twenty of the last 2 bear markets in bonds.
Market Shrugs Shoulders at Ebola
One of the ways I like to put “disasters” into perspective is to try to understand what the markets, in general, think. This from today’s Bloomberg Municipal Market Brief:
Debt issued for Texas Health Resources is gaining even after the death of a patient from Ebola and the infection of two nurses raised questions about practices at one of its 25 hospitals. Bonds sold through an agency of Tarrant County, Texas, that mature in February 2021 traded Wednesday at an average yield of 0.55 percent, or 0.09 percentage point above benchmark munis, data compiled by Bloomberg show. That’s the smallest yield spread in at least 20 months. Obligations due in 2036 and 2040 changed hands this week with the least extra yield since last month.
Hospital debt has gained 12 percent this year, better than any other investment-grade area of the muni market, Barclays Plc data show. Texas Health has the fourth-highest grade from Moody’s Investors Service, which said in August it could raise the nonprofit’s rank. That was enough to make David Jaderlund of Jaderlund Investments LLC a buyer Wednesday. “I’ve been following them for years and they continue to have
strong debt coverage — I’m really not worried,” said Jaderlund. “I’ve been a buyer of that hospital for years and will continue to be. I’m not concerned and the market doesn’t seem to be either.”
Well, I guess, at least for this company, Ebola doesn’t seem to be that big of a deal, for now anyways.
Miami Condo Boom
Funny how this kind of thing sneaks up on you.
Prepare to be overwhelmed with the most comprehensive bus tour of the nearly 60 new condo towers proposed for Greater Downtown Miami.
Miami condo expert Peter Zalewski – who has been cited more than 1,000 times by local, state, national and international news outlets – is scheduled to narrate the 10 AM morning tour of the Greater Downtown Miami preconstruction condo market where more than 17,300 new units are proposed. The 2 PM afternoon tour of Greater Downtown Miami is narrated in Spanish by licensed Florida real estate broker Jenny Huertas. Zalewski will ride on the afternoon tour to answer any questions.
17,000 new units. Of course it’s unlikely that all of them will be built, but still. And this time around the developers aren’t borrowing so much, and many of the buyers are paying cash, but still. Wasn’t it just last week that we were in the midst of an endless economic stagnation? Or maybe it was a bubble. It’s easy to lose track.
It looks like there’s a lot more US dollars in Latin America than anyone thought. Or could it be inflation? Nah. If there were inflation we’d see crazy stuff like the Dow at 17k and $12 hamburgers. . .
I’m sure it will all end well.
John Quincy Adams on Gaza
Our relations with Spain the Palestinian National Authority (PNA) remain nearly in the state in which they were at the close of the last session. The convention of 1802 Oslo Accords of 1991 and 1995, providing for the adjustment of a certain portion of the claims of our citizens for injuries sustained by spoliation, and so long suspended by the Spanish PA Government has at length been ratified by it, but no arrangement has yet been made for the payment of another portion of like claims, not less extensive or well founded, or for other classes of claims, or for the settlement of boundaries. These subjects have again been brought under consideration in both countries, but no agreement has been entered into respecting them.
In the mean time events have occurred which clearly prove the ill effect of the policy which that Government has so long pursued on the friendly relations of the two countries, which it is presumed is at least of as much importance to Spain the PLA as to the United States Israel to maintain. A state of things has existed in the Floridas Gaza Strip the tendency of which has been obvious to all who have paid the slightest attention to the progress of affairs in that quarter. Throughout the whole of those Provinces to which the Spanish Palestinian title extends the Government of Spain the PLA has scarcely been felt. Its authority has been confined almost exclusively to the walls of Pensacola and St. Augustine the West Bank, within which only small garrisons have been maintained. Adventurers from every country, fugitives from justice, and absconding slaves have found an asylum there. Several tribes of Indians Islamists, strong in the number of their warriors terrorists, remarkable for their ferocity, and whose settlements extend to our limits, inhabit those Provinces.
These different hordes of people, connected together, disregarding on the one side the authority of Spain the PA, and protected on the other by an imaginary line which separates Florida the Gaza Strip from the United States Israel, have violated our laws prohibiting the introduction of slaves, have practiced various frauds on our revenue, and committed every kind of outrage on our peaceable citizens which their proximity to us enabled them to perpetrate.