Inflation

John Plender argues that central bank action will make treasuries and gilts (so called “safe assets”) less safe, in that it will increase the correlation of their prices with those of corresponding equities. It’s not Plender’s finest work, but it shows how inflation fears are being reported on almost daily now in the mainstream media. I think that the FT should allow columnists never to update their photos. The new one of Plender is awful. I’d prefer to think of his as never-changing old profile pic.

An economics professor points out that for ordinary consumers prices are rising faster than official statistics. Again, this is a well documented phenomenon, but the volume of articles pointing it out has risen.

Market report

Markets getting more skittish. Sept. VIX future up around 29. Has been going up since around 27th Aug. It is twice the level of Feb., even though the market is higher and seemingly sailing on a millpond. Bonds too have been going up (yields down) since then. Gold has been basically going nowhere since this time (executed a ‘prarie dog’ formation). LB is on a clear downward path. Food commods are pretty quiet, in spite of news of high food inflation in China. There may be some complication about how China is disconnected to US commod. futures. Copper down 1% to under $3/lb (NYMEX).

$TLSA is down about 7%. Maybe the Robinhood bagholders are starting to read up about stock splits and dilution. Or maybe it’s just a cunning bear trap laid by Elon, who currently in Germany subsidy truffle hunting.

Wrap

NDX (NASDAQ) down 5.2%. A healthy correction before a retrace tomorrow? The beginning of the end? Who knows? Certainly not me! Global equity down.

Ten year yields of govt. bonds up across the board, except Germany.

Commodities down, including down.

There are not many places to hide. Currencies broadly unchanged.

Thought for the day

Wetherspoons have a great app, and are very busy locally to me. A lot of the bien pensants sneer at this unpretentious value-for-money pub chain, not least because Tim Martin is so Brexity, but he has adapted to Covid-19 with characteristic efficiency and will see off more of his competition by the time this crisis is over.