Monday 1, August 2022

Wrap

Oil was a big loser today. The nearby month of the WTI future dropped by 4.7% to $93.9. Presumably, this was a delayed reaction to the negative GDP print last Friday. Whether or not the US is in recession is an arcane topic …

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Weekending 31 July

Conservative leadership contest

Things are looking bad for Rishi. The master of detail and the straight-A student has failed to learn that to get elected you must promise the undeliverable. Truss, who has on several occasions embraced policies that even Milton Friedman would have approved of, understood …

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Thursday 28, July 2022

Recession or not?

Will we have a recession? If inflation hits 10%, it seems almost impossible to avoid. We’d have to increase nominal GDP by more than 10% to avoid real GDP going down, for two quarters. The BLS (or some quango in the USA …

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Wednesday 27, July 2022

Wrap

Markets showed once again how unpredictable they are. The Fed announced (at 6pm, after markets closed) that it would hike by 75bp. This was not a surprise. Powell threw a bone (bucket of hay?) to the bulls by saying that the Fed would adjust its …

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Monday 25, July 2022

Dollar strength

The dollar has been rising a lot. It has paused over the last week, but it is still maybe 7% higher than it was a few weeks ago. This is going to hurt US producers, whether exporters or not. Finally, equity markets where the …

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Sunday 24, July 2022

For most people, the biggest spend they will ever make is on a house. It’s not surprising, then, that the biggest asset class on the planet is residential housing. Housing is the market, the one that all other markets are connected to. When house prices …

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Friday 22, July 2022

Hollow men

Ben Hunt has a compelling message. It’s that unconventional monetary theory, practice in Japan, the US, and basically throughout the developed world, is destabilizing because it systematically increases inequality. He says it in a rather verbose style, which reduces his impact, in my …

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Thursday 21, July 2022

Wrap

The BoJ is not expected to react to core inflation in Japan exceeding 2% for the third month in a row. Biden has Covid, but nobody seems to be worried. Reports suggest that Russia and Ukraine will do some sort of deal to allow export …

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Wednesday 20, July 2022

Inflation — long and variable lags

The small countries in the EU which have yet to join the Euro are being hammered with inflation. Their central banks are, in some case, hiking rates hugely, but so far it isn’t working. Slovakia is the exception: it has …

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Tuesday 19, July 2022

Heat exhaustion

In my office today, the temperature hit 36.4 deg. C. That’s too hot. It’s 34.8C now, which is still too hot.

Wrap.

Rampant risk-on. NDX up 3% on no news. In fact, BofA Global Fund Manager Survey showed lowest equity …

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