Markets Demystified
By Aesop Advisor
Markets DemystifiedMay 17, 2023
Shifting Sentiment: Good News is Good Again
Though the Fed has not ruled out raising rates again, with an historic hiking cycle possibly nearing an end, are markets switching from a good-news-is-bad-news to a good-news-is-good-news sentiment? Click to read.
Gyrating Rates: Hawks & Doves Take Turns
Markets have been trying to guess when the Fed will end the fastest rate hiking cycle in a generation. A slew of mixed economic data amid banking turmoil have whipsawed views about the Fed’s path forward. Click to view.
Washed Out: Phony Crypto Volume
Despite being created to increase trust in financial systems, crypto markets may be more affected by manipulation than stocks. Recent crypto charges and a crypto exchange review reveals that digital assets are likely awash in the manipulative practice of wash trading. Click to read.
Banks Collapse: Fed Stands Firm
Following failures of US banks, some saw the Fed ending their rate hiking regime early to avoid causing further financial fallout. Though the Fed followed through with another hike, they acknowledged potentially tighter lending conditions resulting from the bank busts may do some of their inflation-fighting work for them. Click to read.
Netflix’s Madoff: Can It Happen Again
Bernie Madoff ran the biggest pyramid scheme ever, undetected, for at least nearly two decades. Could the same thing happen again? Click to read.
Inflation Persists: Labor Market Unfazed
Following the Fed’s last policy meeting, markets appeared to declare victory over inflation and decided only 1 more rate hike was coming. In the wake of a staggering jobs report and disappointing inflation readings, markets have now decided there will be at least 3 more hikes. Clink for print version.
Cryo Crypto: Frozen Funds, Bankruptcy & Conflict
During the pandemic, crypto lenders boomed, offering high returns for crypto deposits. Unfortunately, many firms went bust, leaving depositors uncertain if they will recover their funds. Now, crypto firms are facing intensifying scrutiny as, ironically, assets intended to enhance trust in markets have ushered in a tidal wave of fraud. Click to read.
Market Slumps: 2022 & Covid
Despite steeper losses during the pandemic, the current market downturn may be more noticeable, as it has been much more prolonged. Click to view print version.
Inflation Frontlines: Soft or Hard Landing
After a year of relentless rate hikes from Jerome Powell and the Federal Reserve Board in a struggle to simmer soaring inflation, will the economy avoid a severe slowdown? Click to read.
Day Trading: High Risk Heavy Odds
Many people are curious about day trading and wonder if it's something they can do to make extra money or even make a living from. Despite success stories that get outsized attention, research shows reality for most may be far removed from happy endings. Click to view print version.
Crypto Quantity: Satoshi’s Focus on Scarcity
Scarcity was an essential element for Satoshi Nakamoto when designing bitcoin. The anonymous computer programmer focused nearly exclusively on scarcity when discussing potential bitcoin value, and drew parallels between bitcoin and the scarceness of gold. However, a review of precious metals and currency markets may not support scarceness as a guarantee of value. Click to view print version.
S&P 500: Stock Market Standard
There are multiple stock indexes that are often cited by media outlets. However, the one that may be heard most often might be the least useful as a measure of the overall market. Click to view the print version of this podcast.
Showtime’s Billions: Realistic or Ridiculous
Although characters from Showtime’s series Billions may be in-part inspired by real people such as former hedge fund manager Steve Cohen and former US Attorneys Preet Bharara and Eliot Spitzer, how real is the show? Click to view print version.
Inflation in Focus: CPI, PCE & PPI
With the highest inflation in decades, gauges of price changes have become a center of economic focus. The Consumer Price Index, the Personal Consumption Expenditures price index, and the Producer Price Index are common measures of inflation. However, the measure that may be cited most often is not the one preferred by the Federal Reserve. Click to view print version.
Bitcoin Correlations: Crypto Tethered to Stocks
Bitcoin was intended to exist outside of the financial system and to end inflation. Therefore, it might be quite ironic that it is moving in lockstep with stocks, plummeting in the midst of soaring consumer prices and vulnerable to monetary moves by the Fed. Click link to view print version with charts and resources.
Exchange Traded Funds: Features of Diversified Passive Indexing
Exchange traded funds, often called ETFs or index funds, offer the diversification that once was only available through mutual funds, yet they have the cost-effectiveness of a passive buy and hold strategy. These key features can make ETFs a good choice for long-term retirement investors. Click for print version.
Hedge Fund Effect: Why Many Avoid Investing
Around half of Americans don’t participate in a retirement investment plan. Part of the reasons why many aren’t invested may have to do with what we call the hedge fund effect. Click to view written edition.
Recession Possible: But Not Here Yet
Recently, many media pundits have claimed that a recession is imminent, if not already present in the US. Historically high interest rate hikes by the Fed, accompanied by two consecutive quarters of declining gross domestic product has stoked recession fears, possibly causing some to sound the alarm prematurely.
Bitcoin & Inflation: Missing Links in Satoshi’s Vision
A computer programmer with no known economic or finance credentials, Satoshi Nakamoto believed bitcoin would end inflation. He emphasized bitcoin’s scarcity as an escape from currency devaluation caused by central governments increasing the money supply. However, Satoshi’s inflation views, recorded in hundreds of forum posts and emails, may reveal a vision largely built on economic misconceptions. Click for print version.
Kevin Bacon’s YOLO: Money Movies - Quicksilver (1986)
Our “Money Movies” series explores how film portrayals may be far from what can be expected from a typical finance professional. Often, finance professionals are depicted as unethical, insider-info trading pump-and-dumpers. Quicksilver (1986) starring Kevin Bacon, is an outlier in that the stock trader is portrayed as a hero, rather than a scoundrel. However, the actual trading actions shown in the movie may present Bacon’s character as more of a reckless, irresponsible speculator.
Relentless Inflation: Excess Stimulus or Suppressed Supply
It seems many have taken for granted that pandemic stimulus spending is the prime suspect for causing painful price increases. Despite the widely known mantra of eminent economist Milton Friedman, who said inflation is always related to money supply, researchers have been unable to find a relation since the 1990s. Other than the fact that no direct relationship between money supply and inflation has been found for decades, assessing stimulus details and the timing of inflation may also suggest pandemic aid is not the culprit. Read at: Relentless Inflation: Excess Stimulus or Suppressed Supply – Aesop Advisor
Time In the Market: Not Timing the Market
Stocks are firmly in bear market territory so far in 2022, having dipped more than 20% from their previous peak. Though losses in the last 6 months are painful, downturns are common and may provide opportunities for long term investors. For the average retirement investor, buckling up for the long haul may be a better choice than reacting to market moves by trying to jump in and out of tops and bottoms.
Bitcoin Beginnings: Satoshi’s Self-Fulfilling Prophecy
Even as crypto marketplaces adopt more regulation and consumer protections, it remains important to evaluate what crypto assets are actually worth. The writings of bitcoin’s creator, Satoshi Nakamoto, along with a community of cryptographers over a two year period may provide insights into why some believe the value of crypto will rise “to the moon”.
Finance Profession Titles: Grasping a Fragmented Field
With a myriad of sometimes overlapping roles, it can be tough to piece together a clear view of the finance industry. We highlight a few types of finance professionals. Despite being a focus of movies and media, perhaps the most familiar finance professional may be the least used by average investors. Click to read.
Index, Exchange, or Both: Understanding Stock Quotes
Pundits throw around multiple terms when talking stocks. We break down what they mean by Dow, S&P 500, and Nasdaq. We’ll explore how they are alike, and how they are different. Surprisingly, perhaps the most used term may be one of the least useful.
Stocks & Jellybeans: Law of Large Numbers
In this edition, we talk about liquidity and investor disagreement.
Crypto Markets: Low Regulation High Risk
April 20 edition of Markets Demystified by Aesop Advisor LLC - "Crypto Markets: Low Regulation High Risk"
Yield Curvature: Bond Rate Barometer
In this edition of Markets Demystified, we talk about the bond rate yield curve and how it often predicts upcoming recessions.
What Will Replace Income In Retirement: Stocks, Pension, or Other
In this edition of Markets Demystified, we talk about how stocks can be a good investment option compared to other assets for those who need to fill income gaps in retirement left by Social Security or pensions.
Stock Pricing Power: Makers and Takers
In this edition, we talk about how larger orders influence prices while smaller orders are price takers.
Trading Versus Investing: Risk, Reason, Time
In this edition of Markets Demystified, we talk about differences between stock trading and investing.
Money Movies: Finance Professionals in Popular Culture
In this edition of Markets Demystified, we talk about how finance professionals are often portrayed in films.
401k or IRA: Employer and Individual Retirement Accounts
In this edition of Markets Demystified, we talk about differences between employer and individual retirement accounts, and when it might be a good choice to use one or both.
Wealth, Income, or Preservation: Why Invest?
In this edition of Markets Demystified, we talk about different reasons for having investments.
Gambling Versus Investing: When to Hold and When to Fold
In this edition, we talk about differences between gambling and investing.
Inflation, Fed, Stocks: Shutdown Shake-Ups Shift to Roaring Comeback Concerns
In this edition, we talk about how inflation, the Federal Reserve, and the stock market all intertwine.
Aesop: What's In a Name
In this first edition, we thought it might be fun to talk about why we chose Aesop as the name for our firm.