volatility
“The source of the rise in the U.S. unemployment rate is not job cuts but a rise in labor supply”
The partial unwind of the Yen carry trade unleashed so much volatility that the Bank of Japan promised no further rate hikes during times of market turbulence. The Dollar has collapsed against the Yen. The BOJ’s intention was to support the Yen, but the Dollar collapse is really about U.S. debt and deficits.
“Character is formed in the stormy billows of the world.”
Four main points: The Fed did not cut rates, the economy is doing what the Fed and markets expected, earnings reports are good but not great, and the dollar continues its collapse due to excessive indebtedness and reckless deficit spending.
“Character is formed in the stormy billows of the world.” Read More »
The “peak Fed funds narrative” is all the rage… risks have not disappeared, just conveniently ignored.
The “peak Fed funds narrative” is all the rage. The risk rally off the October 27th lows completely overwhelmed the negative market inputs of persistent inflation, excessive indebtedness, deficit spending, weak political leadership, and increased fiscal and monetary stimulus.
“Remember that how you say something is as important as what you say.”
Volatility is extreme. Risk remains elevated. Demand-driven inflation is accelerating. The cost of money is
rising. Valuations of risk assets are vulnerable. Be patient and remain defensive.
“Remember that how you say something is as important as what you say.” Read More »
“You can avoid reality, but you cannot avoid the consequences of avoiding…”
A Fed pause, or a flattening of the trajectory of rate hikes, will undoubtedly change market
valuations. It seemed slightly political for Daly and Timiraos to throw a dovish comment out there on the eve of the blackout period, but that is our world.
“You can avoid reality, but you cannot avoid the consequences of avoiding…” Read More »