Morning

All quiet on the eastern front. All professional investors getting nervous, while the Robinhood crowd count their winnings: A random example.

Fleck thinks that yield curve control is coming, even though the Fed says its not (it has form). He seems to think the dollar has gone down too far. If it rallies hard, it will be bad news for risk assets.

I am surprised that there is not more attention paid to the dollar. The level of debt being issued by the US Treasury is unprecedented. It is very hard to see how it can ever be paid down other by inflating it away, which would be very negative for the dollar, which would be negative for the dollar, except that every other country on the planet either is already on the same path, or soon will be (maybe).

Interest rates and savings

Oldies are in trouble. You can see why so many people think that as interest rates go down, people are forced to save more of their income. This is the opposite of what the naive LS-IM model would predict. The whole model seems ludicrously naive. There are so many interest rates in the economy, not just a single one. Of course a zero or negative nominal rate might co-exist with a horribly large real one, which we might yet see if the economy stalls.

Finally

Some amazing charts showing the impact of Covid on the economy. Talk about whiplash! It will be interesting how algorithms cope with these totally unprecedented moves.

High Entropy Secrets

I don’t really know what these are, but I was surprised to be told that I’d committed (in the git sense) a high-entropy secret to the repo that this blog is saved in. What was quite spooky was that I hadn’t appreciated that some clever software was scanning my blog for this, or anything else. I probably did sign up for gitlabs, so I’m not suggesting that anything happened without my consent. Read more here.

I am convinced that there is a lot of fraud going on in the ESG space. Greenwash is a great way to make people not pay attention to what is a terrible business model. This example is probably worth looking at closely.

Close

Generally risk on. Yields (developed markets sovereign) down, equities up, VIX down, commodities generally down, except NG. Dollar up, against most currencies except a few commodity currencies (e.g. Ruble). $AAPL and $TSLA up a lot. I’m not sure that even counts as news nowadays.