Blog: The Road to Stagflation
Stagflation is a stop along the road from growth to recession. But it's still a nasty place, and it's now a strong possibility.
Topic
Market Uncertainty
A collection of 96 issues
Newsletter: Liquidity and the MOVE Index - An Early Warning Signal of Financial Crisis
Liquidity has been in the media a lot lately. It’s one of those things we take for granted, until it’s dried up. In Fractal Market Analysis (1994) I made the point that markets don’t exist to give you a fair price (an assumption of the Efficient Market
Blog: "Cyclical" Core PCE still not encouraging.
Blog: The Fed's Three Body Problem - Inflation vs. Employment vs. Financial Stability
In physics, the “three body problem” involves predicting the motion of three objects, or bodies, when the bodies are attracted to one another by gravity. Newton solved the two body problem, but not the three body equivalent. The French mathematician, Henri Poincare, studied this problem in the late 19th century,
Blog: The MOVE Index is not what it seems - Part 2
On Sept 1, 2022 I posted that the MOVE index is often misinterpreted. Last week's SVB failure makes this discussion relevant and worth continuing.
The MOVE is an implied volatility index of US Treasuries. The index uses options on 2, 5, 10, and 30 year on-the-run US Treasuries.
Blog: Reflation comes back - For one last scare?
Newsletter: From Fragile to Turbulent - But "Minsky Moment" risks have passed
The shift in the Market Uncertainty State Indicator (MUSI) from Fragile to Turbulent requires commentary this month. First, what the change in market state means, and second, why it happened.
Fragile vs. Turbulent
A shock can break a Fragile market. A Turbulent market will bend chaotically, but not break.
Both
Flash Report: Market Uncertainty State Moves from Fragile to Turbulent (Corrected)
Flash Report: Market Uncertainty State Moves from Fragile to Turbulent
Blog: Hard, Soft or Aborted Landing?
Aeronautical terms have been popular form of market jargon for a long time. These days, of course, it’s what type of recession we’re going to have: a “hard” landing (which is a nice way of saying, a crash) or a “soft” landing, where we glide in without disturbing