2022-12-01

Wrap

Today was quite scary. There was a lot of economic news today, most of it bad. This included retail sales, industrial production, PPI (down) and capacity utilization (down). Bonds rallied, but particularly at the five-year maturity. Rather than the curve steepening across the full range of maturities, it …

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Should we be ruled by the brightest and the best?

Our masters are those who managed to climb the greasy pole the fastest. Their reward is their dominion over us. Life’s also-rans may not be happy about this state of affairs, but probably console themselves with the idea that …

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Friday 13 Jan

Oil

Oil prices have been trending down for half a year. Given the number of times that ‘high energy prices’ have been used as an excuse for things getting more expensive, you may be surprised to read this, but it’s true!

All the factors that made …

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2023-01-12

Equity markets and their headwinds

This calendar year has started with a burst of gloom:

• Rising interest rates, driven by central banks trying to fight labour shortages by making capital more expensive,

• central banks promising to double down on their fight against inflation, in spite of the pain being …

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2023-01-11

My brush with private equity

A very long time ago, I wanted to get funding for a software startup. This was in the 1980s. I was young and naive, and so was my business partner. The PC was a new thing, and very little software was available for it …

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2023-01-10

The barbarous relic at the gate

All right-thinking economists dismiss gold as money. Keynes famously declared it a ‘barbarous relic’. But even after all these years, the yellow rock still gets investors and journalists excited (e.g. in today’s FT)

Part of the appeal of gold is its …

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Bonds

Bonds have had a good run, but maybe now is not the time to own them. ($BOND is a PIMCO ETF, but I’d be very surprised if its performance was not representative of an investment-grade bond index).

People imagine that the Left don’t worry about balancing the …

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2023-01-07

Technical analysis

Technical analysis, the studying of price history charts, like the Ancient Romans studied the entrails of animals or palmists study lines on one’s palm, has an ancient pedigree.

Like fortune tellers, the best chartists study fundamentals and the macroeconomic environment as deeply as any market participant …

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2023-01-06

Currency commentary

Money is a complicated thing. Ratios of values of complicated things are … doubly complicated. There is no shortage of economic literature on what FX rates should be, but no economist ever got rich by using economic theory to position his FX exposure.

Well, possibly Keynes actually did …

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2023-01-05

Where are we with equities

For me, equity prices are dependent on so many factors, it’s hard to know what is driving them over any given timescale. With forex, there are a variety of simple models, such as covered interest rate parity, which help one think about why …

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