Thinking
Avoiding The Coffin Corner: Get Ready For A Rate Increase Sooner Rather Than Later
Both investors and policy makers cannot avoid thinking of the economy, or investment portfolios, in terms commonly used for flight. For instance, the words “soft landing”, “stall-speed”, and “crash”, all have connotations that are equally valid, and indeed guide, albeit metaphorically, policy decisions as they do the decisions of aviators. The […]
Of Mountain Lions And Tail Risks
Over the years, I have used the probability of mountain lion attacks as an example of a tail risk that I, as a trail runner in California, face every time I go out for a run in the wilderness. I know the statistics, that mountain lion attacks on humans are incredibly […]
Avoiding The Coffin Corner: Get Ready For A Rate Increase Sooner Rather Than Later
Both investors and policy makers cannot avoid thinking of the economy, or investment portfolios, in terms commonly used for flight. For instance, the words “soft landing”, “stall-speed”, and “crash”, all have connotations that are equally valid, and indeed guide, albeit metaphorically, policy decisions as they do the decisions of aviators. The […]
Will The Real Inflation Please Stand Up? Why Paying Attention To Asset Price Inflation Is Important For Investors
Will The Real Inflation Please Stand Up? Why Paying Attention To Asset Price Inflation Is Important For Investors By now pretty much everyone knows that the massive amount of financial stimulus from the central banks and the government has bid up all asset prices. But the Fed and the rest […]
Bitcoin Versus Central Bank Digital Currency And What It Means For Investors
Mario Draghi got a straight A grade from Janet Yellen as quoted in a Wall Street Journal interview (Source: Wall Street Journal, February 12, 2021): “Whatever it takes will go down in the annals of central banking history as the most important interventions ever. It’s hard to imagine where we […]
Why The GameStop Phenomenon Is Not Surprising
It is quite remarkable that GameStop (GME) has become the poster child of the current speculative fervor, one might even call “gamification”, in the stock market. This is not the first time, and not the last time these events have happened or will happen, and a careful look at the […]
An Ode To FOMO
In June of this year, as the world was still reeling from the aftermath of the COVID-19 crash in the stock market, a Wall Street journal article entitled: “The Ticker Symbol We Need Right Now: FOMO” focused on an investment strategy I have been discussing for some time Readers know […]
When BFFs Collide: How The Fed-Treasury Spat Could Create A Major Market Move
This year the combined efforts of the Treasury and Fed arguably resulted in the market averting depression-like conditions. Hats off to both Treasury Secretary Steven Mnuchin and Fed Chairman Jerome Powell for creating a once-in-a-lifetime pact out of necessity that crossed many red lines to intervene directly in markets and indirectly […]
Why China’s Negative Yield Zero Coupon Bond Is A Big Deal – For China And The Markets
On November 18, 2020, the Chinese government issued 4 billion Euros worth of debt at rock bottom yields. The star of this issuance was 750 million Euros of zero-coupon, five year maturity bond issued at a price of 100.763. The redemption of this paper at maturity will be at 100. In other words, […]
‘FAITH’ In The FAIT Of Flexible Monetary Policy Is Key To The Fed’s New Framework
The evolution of the Fed’s thinking over the last 30 plus years I have been in the business of investing has been quite remarkable, and it continues to have important consequences for financial markets. About three decades ago, right around the Volcker rule, the paradigm could be represented by a […]
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