Why CPI Numbers Suggest Interest Rates Are Too Low Vs. Inflation

ByBrad Lamensdorf

The following chart from Shadow Statistics by John Williams compares the official government Consumer Price Index (CPI) with the significantly higher CPI that Williams calculates if the index was measured by pre-1990 methodology when interest rates generally were higher than inflation.  Williams believes that there’s been a sharp deterioration in the last couple of decades…

Market Sentiment Gauges Warn: “Be Fearful” 

ByBrad Lamensdorf

“Be fearful when others are greedy and greedy when others are fearful.” – Warren Buffett Short-term and intermediate-term sentiment gauges are signaling investors have become greedy –  warning signs that that stock prices are too high. The CNN Fear and Greed Index is now in greedy territory at 63.  Meanwhile, the Ned Davis Research (NDR)…

Beware: Default Rates Could Be Set To Explode

ByBrad Lamensdorf

Debt as a percent of nominal GDP has approached a 30-year high (yellow line), while defaults are hovering at all-time lows (green line). Why does that matter to you? Over the last three decades debt accumulation tended to occur several quarters before the default rates began to accelerate.  This setup, illustrated in the chart,  indicates…

Market Sentiment Gauges Flashing Mixed Signals

ByBrad Lamensdorf

Short-term measures of investor market sentiment are flashing warning signs. The Ned Davis Research (NDR) gauge has moved up to a sell signal at 78, a very high number for this short-term measure. Meanwhile, at  62, CNN’s Fear/Greed gauge has moved higher into the greed zone, also warning investors to be cautious. from a contrarian…

Sentiment Remains Elevated

ByBrad Lamensdorf

“Be fearful when others are greedy and greedy when others are fearful.” –Warren Buffett  Overly Optimistic Investor Market Sentiment Continues to Flash Warning Signs Short-term market sentiment indicators were showing slightly less investor optimism last week. But, as  contrarian indicators, they were nowhere close to buy territory.  The CNN Fear/Greed index fell back to 48…