US large-cap blue-chip stocks are still the place to be

In December last year I outlined a number of factors that were bullish for US stocks, and said that they would continue to be the primary beneficiary of Fed policy and other favourable macro forces. My bullish outlook has not changed, and this article explores more reasons to be bullish on large-cap US equities.

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Are Banks Finally Ready To Start Lending?

In normal times, today’s combination of record low interest rates and massive infusions of capital into the banking system would ignite the mother of all expansions. That it hasn’t has confused the economists whose textbooks clearly state that it should. And it has convinced the Fed to just keep upping the ante with QE after QE.

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What’s next for the Dollar and Currencies? Updated Merk Outlook August 2013

In the short to medium term, the U.S. dollar and currencies are heavily influenced by the actions of the Fed. As the Fed may be reading tealeaves as much as anyone else, we may be facing particularly high policy uncertainty that, in turn, reflects on elevated volatility in the bond and currency markets. The good news is that this may yield opportunities for the prudent investor.

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Collateral Transformation: The Latest, Greatest Financial Weapon of Mass Destruction

In 2002 Warren Buffet proclaimed that derivatives were ‘financial weapons of mass destruction’ (FWMDs). And he was proven correct. But who cause crises? And why? And can so-called ‘liquidity regulation’ prevent the next crisis? Let’s take a closer look at proposed liquidity regulation as a response to the growing use of ‘collateral transformation’: the latest, greatest FWMD in the arsenal.

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Why talk of Fed “tapering” is just talk

Investors expect the Fed to begin reducing QE as early as this summer. However, whether or not the Fed follows through on “tapering” largely depends on whether the US economy can stand on its own two feet without support from the central bank? Our view is that it cannot and this article examines why that’s the case and why talk of “tapering” is just talk.

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