Wrap

The steepener trade caught a bid. The ostensible reason is that J Powell made a statement that the Fed would not raise the short end of the curve until they see real evidence of inflation. All too often the Fed has not waited until it saw the whites of the eyes of its deadly enemy, inflation, and tightened too soon. The result is that since the GFC of 2008 most economies have had monetary policies which have been too tight. A few voices in the wilderness have been saying this since the beginning (notably Scott Sumner), but most people seem mesmerized by the idea that if nominal rates are below one percent monetary conditions must be loose. This totally fails to recognize that real rates have an inflation component (what Lacy Hunt calls the ‘Fisher Equation’ but most other economists just seem to think is so obvious as to not warrant a special name).

Well, with Powell being dovish, and (presumably) deciding that the only way he’ll get to do a second term is to persuade Harris/Biden that he’ll run a hotter economy than the rest I think the market is waking up to the reality that the long end is going to rip. Of course, I might just be talking my book. Or, I might as well say that we’re all Modern Monetary Theorists now: certainly large sections of the Democratic Party are, including influential ones, like one lead by AOC.

I leave you with evidence. Note that this is from Koyfin, which has had a makeover and now covers “international” equities and generally is a whole lot better. Websites like Koyfin, and Trading Economics really provide a wealth of market and economic data.

Bitcoin

I was cold called by a boiler room operation today. A guy was trying to sell me an investment opportunity buying bitcoins. This is not interesting in itself, except to the extent to which the guys that runs these scams have antennae which are finely tuned into what the unsophisticated investor wants to buy. The pitch was along the lines of “this thing has gone up so much lately, you have to buy, because otherwise you’re missing out.” I didn’t really give the caller a chance to expand the pitch, as there was no way I was going to buy, and I felt it was wasting his time to make him recite it. But, this surely is a indication that $BTC is at a top.

Tesla

Elon Musk is saying that he’s open to offers from other companies. He is also saying that he’s trying to cram down costs. The stock has reached (IMHO) unsustainable levels, way beyond what even he thinks is warranted, but at the fag end of a bull market stocks can still go up violently as the last bear capitulates. At some point, there are no more buyers and the short squeeze reverses, but this can take an agonizing time. Ben Graham’s “Mr Market” does not predictably swing from irrational buying to irrational selling. He keeps buying for years longer than anyone things is sane.

PC software

I downloaded a new release of Thunderbird today. If you want a multi-platform classic email client (MUA in the jargon), it’s damn hard to beat. It has built in support for gnupg (equivalently openpgp), which is great. It seems odd that with Bitcoin proving the security of public key encryption, more people aren’t turning to it for security and signing. I am frequently required to sign contracts, and (for me) the perfect way is to publish my public key (added at the bottom of this post) and then sign using gpg, which is available on all platforms, but somehow people don’t use much in practice. It really is very slick, and works flawlessly.

(In practice I tend to use concord, which is a bit over the top, but is free, and easy to use for non-techies.)

I should also give an honourable mention to Zettlr. I have been writing all my posts in it for a month or so, and it goes from good to better.

I’d also like to put in a mention of the full node self-hosted wallet for bitcoin: Bitcoin Core. Once this thing syncs, it uses up negligible CPU. Seriously, you can’t find it in the process list. I’d recommend it. It’s really very easy to install. (I did try to install the equivalent for XMR but gave up.)

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