Number #1 question being asked now sounds like this: “Why should I invest now?” The Fed is raising rates, recession risks have surged, economic demand is being destroyed, and volatility... read more →
Tougher/tighter financial conditions and an aggressive Fed still playing from behind with regards to rates and inflation are purposefully destroying economic demand. Last week US housing data looked softer. This... read more →
We have been talking about tighter financials conditions (higher rates, higher yields, tougher lending, etc.) and the theme of demand destruction (how the Fed is attacking inflation) for the past... read more →
This morning’s GDP report noted contraction for the second quarter in a row. We can debate inventory builds and trade imbalances and the math underlying the calculation of real GDP,... read more →
The bond market already has hiked rates to 3%. The Fed is playing catch up but will get there in the coming 3 months. What they do from there will... read more →
Volatility fatigue led to extreme weak investor sentiment which has now finally translated in defensive portfolio positioning. Actions speak louder than words. Fund managers surveyed have now taken up their... read more →
The demise of meme stocks, day trading, and Robinhood (HOOD) Excess money supply growth led to excess inflation which led to a rise in bond yields. That’s the secondary source of... read more →
The pain inflicted on high quality, long duration bonds Between March 2020 and December 2021, the US produced about $8 trillion in stimulus to economically battle the pandemic. Roughly half... read more →
Higher prices have led to tighter financial conditions. Mortgage rates up a lot, gasoline prices up a lot, UST yields higher, credit spreads wider. For the past five months, both the bond... read more →
The Fed can’t do anything about the supply of goods and services but does control the creation and destruction of economic demand. In 2020 and 2021 the Fed was creating... read more →