Bonds

“Mr. Biden and his party have been given the chance to avoid a dire fate for their country and the world. They should seize it.”

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The S&P 500 once again touched an all-time high (5,523) but closed on a down note for two reasons. First, inflation remains persistent. The Fed’s preferred inflation gauge (PCE) showed prices are still rising substantially more than they were pre-pandemic (+2.6% vs +1.3%.) The key (outside-down-day) reversal lower insured that for the 9th. straight day, the U.S. equity index failed to close above the psychologically important 5,500 level. Second, Biden’s Presidential term is likely finished. The damaging and likely permanent fallout from the debate is devastating. More on that below.

“Mr. Biden and his party have been given the chance to avoid a dire fate for their country and the world. They should seize it.” Read More »

“History’s cunning passages, contrived corridors & issues deceive us with whispering ambitions & guide us by vanities.”

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Perry Capital is positioned for slower growth and higher inflation into the Summer. The economy continues to be supported by above-trend consumer spending from asset owners and way-above-trend increases in government spending. The Fed, or the Treasury Department, does not need to stimulate the economy, but it may do so to bolster the present administration’s re-election.

“History’s cunning passages, contrived corridors & issues deceive us with whispering ambitions & guide us by vanities.” Read More »

“There is an inevitable divergence, attributed to the imperfections of the human mind, between the world as it is and the world as men perceive it.”

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Stimulus remains ample, and Mr. Powell was more dovish than even the most strident risk asset bulls anticipated. Government activism in the economy and capital market and economy remain and are accelerating.
The performance of the U.S. equity and credit markets is excellent, and they are aggressively testing the Fed, which doesn’t see the threat unless, of course, they see something that we don’t. Three cuts are still expected in 2024. Stocks should remain encouraged but for how long?

“There is an inevitable divergence, attributed to the imperfections of the human mind, between the world as it is and the world as men perceive it.” Read More »

“History repeats itself, but in such cunning disguise that we never detect the resemblance…”

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77.25% of the Perry Capital portfolio yields 5.09% with principal guaranteed. I sold my short 25% Treasury
positions and because the Fed is going to raise rates and keep them there for much longer than the market expects. This will exert an enormously negative influence on trillions of outstanding credit market
exposure.

“History repeats itself, but in such cunning disguise that we never detect the resemblance…” Read More »

“The Future has many names. For the weak it is unattainable. For the fearful…”

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The Perry Capital Portfolio remains unchanged (75% cash.) The discipline to maintain a cash position
throughout the year was not easy but proved fortuitous. Those who correctly expected a hawkish Fed beat the market in 2022. Those who did not, underperformed. It will be more complicated in 2023.

“The Future has many names. For the weak it is unattainable. For the fearful…” Read More »