13. October 2009 by Dan Walkow, CFA, CMT.

According to Mark Hurbert “the data from TrimTabs Investment Research shows that the net outflow for the month of September from domestic equity open-end mutual funds was $11 billion — the biggest monthly outflow since March, the month in which the bear market hit bottom. This trend continued for the first five trading sessions of October (through this last Wednesday, in other words), over which time an additional $4.1 billion was pulled out.

By the way, the other trend I mentioned in my mid-September column appears to be alive and well and, if anything, getting stronger: I am referring to mutual fund investors’ love affair with bonds. According to TrimTabs, open-end bond mutual funds in September had their strongest month of the year in terms of net new cash invested in them. And, if we extrapolate on the data for the first five trading sessions of October, October might be a month of even bigger net inflows.” Read full story here.

This rally continues to climb a wall of worry. Could the masses be wrong again with bond prices at nose-bleed levels while stocks continue to recover but only benefiting the courageous few?

Bubble bubble me thinks its the bond market!

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13. October 2009 by Dan Walkow, CFA, CMT.

Three days after the Reserve Bank of Australia unexpectedly raised interest rates, the monetary policy committee of South Korea’s central bank held a meeting. The Oct. 9 gathering was closely followed because the Australian move raised expectations that other central banks would also tighten. Korea held the line. Citing “uncertainty as to the economic growth path,” the Bank of Korea kept interest rates at an ultra-low 2%, the result of six rate cuts over the past year.

Still, it is only a matter of time before Korea follows Australia’s lead. So will the People’s Bank of China, the Reserve Bank of India, the Reserve Bank of New Zealand, the Monetary Authority of Singapore — and perhaps several months down the road, the European Central Bank. As economies recover and jobless rates fall, most policymakers will raise interest rates to head off the inflation that could result from the massive fiscal stimulus spending launched by governments around the world to combat the global recession.

Most will raise rates — but one very conspicuous central bank is unlikely to follow suit. With the U.S. jobless rate at 9.8% and still rising, the U.S. Federal Reserve cannot risk a rate increase anytime soon, despite the danger of inflation. Read full story here.

Interest rate increases around the world will only increase pressure on the downward move in the USD.

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13. October 2009 by Dan Walkow, CFA, CMT.

Many Americans dread April 15, the deadline for filing their income tax returns. But some well-heeled people are trembling over another looming tax day: Oct. 15.

Thursday is the deadline for Americans to come clean about the money they have hidden offshore, in places like Swiss bank accounts. No one can say with certainty how much money is out there — the accounts are secret — but the hoard may be tens of billions of dollars.

Several thousand wealthy people have come forward, hoping to avoid large fines or possibly even prison. But many others are still weighing their options. The choice is stark: They can confess and pay the penalties, or gamble that they will not get caught. With the deadline only days away, tax lawyers say they are being inundated by anxious clients.

Read the full story here.

This is an American story but I would not get to comfortable as a Canadian as one should expect to see similar actions from the CRA.

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