Article Category: Inflation

Matt’s Market Insights

Understand how market participants think -- and you will understand which direction the markets will head. With that in mind let's take a look at another cognitive bias, hyperbolic discounting. As a reminder, cognitive biases are established tendencies of individuals to deviate from normal rationality under certain circumstances. For a broader description, please see the Daily Remarks posted on October 21, 2013.

Ever wonder why so many people these days are focused on short-term trading as opposed to long-term investing? Or why it's so hard to get younger individuals to effectively plan and save for retirement? Hyperbolic discounting can help us understand these phenomena.


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Posted in: Bonds Debt Federal Reserve Inflation

Matt’s Market Insights

The Fractal Nature of Price Trends.

Warning: this is going to be a bit complex and philosophical in nature.

The term fractal refers to an object or system that maintains self-similarity across multiple scales. Fractals exist everywhere in nature and describe the infinite complexity of our universe. Fractal mathematics is one of the principles underpinning Chaos Theory -- which can be described as the science of the unpredictable. Chaos Theory aims to understand the behavior of dynamic systems which are impossible to predict or control, such as weather, our brain states and -- yes -- the stock market.


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Posted in: Bonds Dollar Economy Federal Reserve Inflation Momentum

Matt’s Market Insights

With budget and debt issues front and center over the past couple weeks, the spotlight has been taken off the Fed. Considering how the debt drama played out, and the fact that we will be caught in this drama again at the beginning of 2014, it's unlikely that we will see tapering in December. The December Fed meeting will be the last with Bernanke as Chairman. Pending confirmation, it will be Yellen moving forward, and she is well known for her dovish stance.


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Posted in: Federal Reserve Gold Inflation Interest Rates Momentum

Matt’s Market Insights

The art of technical analysis is the ability to identify trends in markets with enough accuracy and foresight to allow us to capitalize on them. The measurements and indicators used to determine these trends are not perfect nor infallible. The astute analyst must at all times be aware of noise and disturbances that can alter the reliability of certain price movements to accurately reflect the inherent trend. While most of Washington's nonsense can usually be classified as "noise" and be dismissed as already discounted in prices, critical junctures like the one we are at are different.


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Posted in: Debt Dollar Federal Reserve Gold Inflation

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