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Blog
A collection of 123 issues
Blog: Inflation trend is still up
While there was quite a to-do in the markets today because headline inflation didn't fall back as much as expected, worse news was that underlying "core" inflation was universally up continuing an unbroken trend. I'm not talking about the "ex-food and energy"
Blog: The MOVE Index is not what it seems
The MOVE index is widely misunderstood. It's based on the implied volatility of a 20/20/40/20 combination of 2,5,10 and 30 year treasuries and then translated into basis points. But most still interpret it like the VIX. When the MOVE is high, it means
Blog: "Soft Landing" is off the table
A Bloomberg article today mentioned that Powell has dismissed the possibility of a "soft landing" and is now going for a "growth recession" which sounds like an oxymoron. But it seems to mean that they're hoping for a mild contraction which still does not
Blog: The Fractal Market Hypothesis in Action
Bloomberg recently featured an article titled “Lockstep Stock Market is Forcing Everyone to be a Macro Trader.”1 The article noted that the correlation across stocks has increased substantially. Markets seem to be less concerned about individual stock stories than about the overall economy and its effect on all stocks.
Blog: "Peak Inflation" not confirmed
When the Consumer Price Index (CPI) data was released a couple of weeks ago, there was a sentiment of relief. Headline CPI and Core CPI measures had dropped a bit on year-over-year basis, leading many investors and market pundits to hope that we’re close to “peak inflation.” That is,
Blog: The two PMIs and the Fed
The Purchasing Managers Index (PMI) is a measure of manufacturing activity that has become widely followed in the last five years or so. I’ve used PMI data in research for some time, though. I’ve always liked the PMI, because it gives us a view of the economy from
Blog: Fed Policy-Is the "neutral rate" a myth?
The Fed and other central banks have now stated that they are raising rates to remove “accommodation.” Basically, they want to stop stimulating the economy and go to the much sought after neutral rate, which balances growth/employment and inflation. But what is this neutral rate? How will they know
Blog: Bitcoin are Pork Bellies, Not Gold
Bitcoin proponents often refer to cryptocurrencies as “digital gold.” But aside from both having few practical uses, bitcoin and gold have little in common. Yet despite its lack of utility, bitcoin continues to trade. Along with other cryptocurrencies, bitcoin seems to have taken on a life of its own as
Blog: When a Recession is not a "Recession"
In my last post, I noted that the definition of a recession is not as precise as people think. The rule of thumb is two quarters of negative GDP growth. Yet, the decline in 2020 only lasted two months, March and April. So what gives?
The two quarter definition is