Here is What I Am Watching, Lately

Every few months, I like to pull together an assortment of unrelated items that I find interesting (See this). These items include things that are not quite fully baked in my mind, not yet a full column. While I wait for these to jell, I like to put them on paper to create a bookmark of ideas, and to see what generates feedback and debate.

The main qualification is that they are both interesting and potentially significant. Here are my 10 random items to round out our week:

1. All-time highs: Markets are within a few percent of record highs. Each and every pullback, if we believe the noise, is the end of the rally and the start of the next bear market. Unless it isn’t, in which case, never mind, we will be back with the same forecast when the market is 5 percent higher. I can’t recall so much angst amid so many all-time market highs; every pullback is the end of the world. It is both fascinating and perplexing

2. Housing: Housing has begun to sputter. New starts have been lower, permits soft, existing home sales disappointing. Yes, I know, the weather was awful in January and February — but it’s now May heading into June, and that excuse no longer carries. This is prime residential real-estate selling season, and it seems to be limp.

The entire post-crash housing recovery has felt artificial, part of an attempt to prop up the big banks that had billions of dollars in bad loans on their books. The past five years of zero-interest-rate policy was designed to buy time so banks could get out from under their sour mortgages, But inventory is low, and interest rates are falling, so I am unsure how this plays out. Regardless, there are going to be some fascinating analyses written on the real-estate boom, bust, reflation, and whatever comes next. Look for it in whatever replaces your local bookstore in 2025.

3. Secular bull market?: Jeff Saut of Raymond James believes we are in a secular bull market. He noted that in the 1980-85 period many investors continued to doubt that the earlier 16-year bear market was over. Very, very few were willing to accept that the cycle had turned. There are many parallels between this era and that, and I am slowly moving into Saut’s camp.  Continues here

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