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Explaining my shift in tone briefly
I have an interview with Mark Ritchie coming up in an hour and I wanted to write a specific post about the changing tone on Credit Writedowns because of it. I last spoke to Mark in June. And he was a wide-eyed bull, telling me that the 3-…
Thinking about the blowoff top
Oh, how the world has changed!
The threat of a mutant-inspired viral wave and lockdown still lurks in the background, yes. Even so, the balance of risks is now completely tilted to the upside in the US economy. And that means we have to…
A reckoning in the EU and more on US yield curve steepening
Two separate issues here today. The first is on the yield curve in the US. And the second is on the slow vaccine rollout in the EU and its impact on the economy.
The three yield curve outcomes
Let' start with the yield curve. We began the…
Shades of 2018 as steepening yield curve great for banks, not tech
I had some bullish economic thoughts last week. But I also embedded a warning about support for bonds being broken. Yields at the long end of the US Treasury curve are rising, potentially to the top of a range between 1.00% and 1.50% and…
Bullish economic thoughts and the three yield curve outcomes
Let's look at upside potential instead of downside risk today. And then let's put it in the context of the three yield curve outcomes I have posited.
The virus
I'll start with the thing that everything else seems dependent on these days,…
Weak jobs data highlight the economic impact of pandemic
Happy Friday!
Let's use this time to run through the latest employment numbers and what they mean regarding the economic outlook. And so, I want to start from a self-quote I made yesterday from a January 8 post.
The reverse radical…
Jobless claims show US coast is clear except for mutations
Economically, I would say we're out of the woods for a recession now except to the degree mutant variants force new lockdowns. Four data points, real quick here.
The 14-day change in hospitalization is -23%, with 91,440 hospitalizations…
Epidemiological tail risk in an era of missing price signals
The title of the post is supposed to marry what's happening on the pandemic front with what's happening in financial markets. The gist is that, in a world where unexpected levels of economic resiliency has been the norm, we should wonder…
The pandemic, gamma squeezes and intergenerational conflict
You know this is going to be a redonkulous post by the name. So I am warning you ahead of time. It's going to be super macro - so half thought piece and half tactical. Let's see how many different interrelated topics I can manage to…
Three yield curve outcomes and grey swans
I am in an even more hopeful mood now than ever. But, at the same time, I still have my worries about downside risks given how euphoric asset markets have been and how mediocre economic data have been. I think that split between hope and…