Tuesday 1, March 2022

Wrap

Oil prices have gone up 76% YoY, 22% MoM and 15% in the last week. So far oil stocks and longer-dated contracts have not moved nearly so much, but inflation expectations are now so entrenched (in my view) that it will be a while before …

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Monday 28, February 2022

Wrap

I’ve been away, and much too busy with my day job to think much about what’s happening. We are still in the fog of war, and nobody knows that the outcome will be, but the following things might be worth thinking about:

• Russia …

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Friday 25, February 2022

Wrap

Money flowed from commodities to equities. In FX, investors sold USD for riskier currencies. Bond investors remain calm: the US 10Y is 3.5bp below 2%. Commodities sold off, apart from silver and copper, dragged down by oil, which had spiked on early news.

Main …

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Thursday 24, February 2022

Ukraine

Russia seems to have decided on a full-scale invasion of Ukraine. Markets reacted strongly this morning, with near-dated Brent futures shooting up a huge amount. Various EU and other countries condemned Russia, but at the end of the day, Russia is not going to be …

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Wednesday 23, February 2022

EU Inflation Update

Expectations, aggregate demand above productive capacity, runaway growth in credit creation. There are many explanations of inflation, most of which seem to fail in one regime or another.

It’s a very long time since anyone in fixed income markets in developed markets …

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Monday 21, February 2022

Credit markets drooping

If we are going into a bear market in equities, I’d expect to see credit markets weakening first. Bond traders are constitutionally bearish, and see the clouds on the horizon first, in my not-very-data-driven opinion. A graphic from the Daily Shot illustrates …

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Sunday 20, February 2022

Weekend Wrap

I don’t believe in technical analysis. But I also don’t believe that stock prices move in a pure random walk. The marginal buyer changes over time. Many owners of stock are siloed. Most stock holdings are passive now, which means that buying …

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Friday 18, February 2022

War games

Putin seems to be running rings around the west in relation to his strategy for Ukraine. I have no idea what’s going to happen, but markets got spooked. There were reports of shelling in Ukraine. Conspiracy theories swirl around: one that I have …

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Thursday 17, February 2022

Doomberg “Just Watch Me”

I am not Canadian. I don’t really know what the truckers in the Canadian convoy were protesting against. But I do believe in the right to protest, and I do believe that those opposed to vaccine mandates have a right to …

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Tuesday 15, February 2022

US yield curve

The world is worried about the yield curve. In a normal economy, long-dated rates carry an uncertainty premium. Lenders need a greater annualized compensation for locking up their money for a longer term. They bear a greater risk of inflation destroying the value …

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