employment report

“I didn’t have time to write a short letter report, so I wrote a long one instead.”

Newsletter /

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.

“I didn’t have time to write a short letter report, so I wrote a long one instead.” Read More »

“I thought by now you’d realize, there ain’t no way to hide your lyin’ eyes.”

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Stagflation reigns. Slow growth (2.5%) with rising inflation (4%) — driven by the rising cost of labor (+5%) — is the very definition of a stagflating economy. This forecast remains the dominant theme for the economy, markets, and investors. Stagflation has been the Perry International Capital Partners (PICP) forecast for two years, and we continue to be more worried about rising inflation than we are about slower growth.

“I thought by now you’d realize, there ain’t no way to hide your lyin’ eyes.” Read More »

Men rise to great fortune “more through fraud than through force.”

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Valuations are extreme, liquidity is falling, optimism is at record levels, and speculators are longer than they have been all year. The icing on the cake is that the market thinks there will be 6 Fed rate cuts this year. Policymakers at the Fed, most of whom are non-voters, think there will be 3. I think there will be none. The market is ahead of itself.

Men rise to great fortune “more through fraud than through force.” Read More »

“You never know what is enough unless you know what is more than enough.”

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I thought very hard about increasing exposure to Long Treasuries and the S&P 500 a month ago; I decided
not to. My decision was based on my forecast—earlier this year—of a 3.5% yield. We spiked from that level
up to 4.33% and then right back down, which I did not expect. Volatility quite elevated. Therefore, my cash
position continues to migrate toward Treasury Bills. Consequently, I must ask… what is wrong with a
guaranteed return of 4% until the dust settles and volatility settles down. Not much, in my opinion!

“You never know what is enough unless you know what is more than enough.” Read More »