Category Archive: Finance
The Fed Is Confused About What Drives Inflation
On October 4 2017, the former governor of the Federal Reserve Daniel Tarullo in a speech at the Brookings think-tank in Washington said Fed policy makers do not have a reliable theory of what drives inflation. According to Tarullo, central bankers should pay less attention to theoretical models and more to actual data. However, how […]
Inflation: An X-Ray View Of The Components – Monday, October 16
Here is a table showing the annualized change in Headline and Core CPI, not seasonally adjusted, for each of the past six months. Also included are the eight components of Headline CPI and a separate entry for Energy, which is a collection of sub-indexes in Housing and Transportation. We can make some inferences about how […]
How VarSwaps Work And Why Knowing Is Important
Exchange traded volatility products like ETFs and ETNs continue to grow in popularity, and this rapid expansion into a relatively complex asset class has left many investors confused about some of the fundamental concepts needed to reasonably understand the market that underlies these popular retail products. Equity volatility trading has been around in one form […]
Recession Red Flag Rears Its Ugly Head – Treasury Yield Curve Crashes To Post-Crisis Flats
Probably nothing… The last two times the spread between 30Y and 5Y Treasury bonds was below 90bps, the US economy entered recession… And the 2s10s curve is tumbling too – to its flattest since the crisis… But, but, but, how can a recession be coming with stocks are record highs?
Predicting Dow One Million – Was Warren Buffett Being Bold Or Overly Cautious?
In a recent speech, Warren Buffett came down boldly on the side of optimism when it comes to both the economy and financial markets. What he said was “being short America has been a loser’s game…And it will continue to be a loser’s game.” And to throw down the gauntlet against some the current negative talk in […]
Letter You Don’t Want To Read
I just got off the phone with a hedge fund manager I have known for 30 years, and he gave me the bad news. He was hanging it up for the year. The risk/reward in the market now was so poor that it was no longer worth wasting time trying to find good trades. The […]
Tech Profits: Looking Beyond The FANG Stocks
FANG stocks have dominated financial headlines and rewarded shareholders for several years now. Most people have heard of the “FANG” stocks. The term was popularized by a TV personality when asked about his top picks for investors. The “F” stands for Facebook, at least that much is certain. But the other letters are somewhat interchangeable. […]
Third Time Lucky For Oil?
Whilst the fundamental landscape for oil remains much the same, with OPEC continuing to maintain supply control for both member and non-members alike, the technical picture is once again approaching a key price region and one which is likely to set the tone for oil prices moving forward. That price point is $52.50 per barrel […]
You Ignore Geopolitical Firestorms At Your Own Peril: Chief Economist
Who’s worried about geopolitics? That’s a joke. No one is worried about geopolitics. Or at least not according to risk assets, which are grinding inexorably higher across the globe despite a laundry list of flash points that has now grown to include a secessionist bid in Catalonia and a shooting war between Iraqi forces and […]
China’s Producer Prices Surge In September
Growing domestic demand and reduced industrial capacity in China increased factory prices in September. The Produce Price Index climbed 6.9 percent year-on-year in the month, up from 6.3 percent in August. This is faster than the 6.4 percent forecast by economists in September. Manufacturing PPI sub-index rose 7.3 percent, the highest in nine years. Aggressive […]
