Tuesday 3, May 2022
Wrap
Generally, equities were up, modestly, bonds were flat (10Y yield precisely so, safely back under 3%), FX pretty quiet, DXY falling back from 103. Most big stocks seem to be up, including Tesla, XOM and JPM.
The bond bulls, such as @macroalf, and Andreas Steno-Larsen, think that the Fed has overreached itself, and that it will have to backpedal by the end of the year. I sort of agree that things might start to break (like the housing market), which traditionally spooks the Fed, and that JPoww is no Volker, but I think there is simply too much volatility to get involved.
There were some Twitter rumours of the Fed hiking by 75bp tomorrow, but from what I can tell, the market’s not buying that rumour.
There are an increasing number of sceptics who think that Musk’s NGMI (‘not going to make it’) in his bid for Twitter. He will fail, eventually, but Morgan Stanley will want to get those juicy fees.
Weirdly, the Russian ruble is back where it started, before the war with Ukraine. Not sure it’s not being manipulated, but it’s interesting.
Image of the day
Crossroads of her life by David Sark pic.twitter.com/9ZRVSAMEor
— Abstract➿Natalija (@Unique_Abstract) May 3, 2022
Dieter Helm calls plans for net-zero by 2050 “hopelessly unrealistic”
This probably isn’t a surprise to anybody. If we, as a society, want to reduce the amount of CO2 we produce, we can take action to deliver this. If we refuse to buy our electricity from suppliers who use fossil fuels to generate it, then the world will have less CO2 going into the air. But this will come at a cost, which can be transferred to others, in theory, by the government.
I know the argument about externalities, that by using coal we impose costs on others, which are not born by either the consumer or the producer. But the government could address this by imposing a tax on consumption of carbon, rather than building lots of windmills and solar panels, which, by themselves, do not reduce consumption at all.
I know that each of us, individually, can’t supply our energy needs by building a windmill in his garden, but I am far from convinced that the government somehow magically makes costs go away by taking away our individual choice about where we get our energy from. Especially when we are told that zero-carbon electricity will be so cheap.
Tweet of the day
They’ll go after some Redditor who made $57.92 on a fractional interest in a single share of some shitco via Robinhood, pat themselves on the back, and say “job well done, boys.” https://t.co/qx90ae3Rlq
— Bill (@BillAlwaysWins) May 4, 2022
Image
Marta Zamarska pic.twitter.com/GqpBqdnfAH
— Daniel Brami (@Daniel_Red_Eire) May 6, 2022
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