The minutes from the Federal Reserve Board's last meeting have come out and they are dovish. While on the one hand, we should praise the Fed for showing it is data-dependent as it has professed to be, on the other hand the abrupt change in…
The macro environment right now is disinflationary as many countries struggle with product and labour ‘overcapacity’. The missing element is demand to meet supply. I want to talk about Fed monetary policy and the new Chinese currency regime…
The US economy’s upswing over the last six years has been predicated on credit like the cycle before it because wage growth has been lacklustre. I want to describe where credit activity has created a lift in consumer spending and in capital…
Despite the title, this is not a mono-themed post but more of a highlight of recent news and data and their importance in interpreting the direction of the economy and potential effect on markets. I do want to concentrate on European and US…
Ukraine will have global impact
More sanctions are coming but will be somewhat limited
The global financial system is moving away from the US
US auto subprime is going to blow up
The economic and business paradigm in place in the United States is predicated on a secular increase in household debt that I believe will not last through another cyclical downturn without serious deleveraging. The reason we saw…
There are widespread signs of credit market froth. This is a telltale sign of top of the cycle or near top of the cycle excess. Think 2005, 2006 or 2007. The key bit here is that credit markets transmit distress in a way that equity markets…
I believe investors are reaching for yield and there are multiple signals indicating such. This is a direct outgrowth of easy money policies by central banks as nominal yields are at record lows and real yields are negative.
Investors,…
There are two potential issues with the current re-leveraging cycle. First, the increase in the latest report, outside of real estate related mortgages as shown in the chart below, was primarily driven by increases in student and auto loan…