Autist repetition
I know I sound like Bill Cash droning on about Europe, but the sheer weight of interest in inflation recently has been amazing. A lot of mainstream press is suddenly saying “Whoa, why are interest rates going up? Is there really no negative consequence of the US Treasury pumping 25% of GDP into the economy via ‘stimulus’? Has anyone tried this before, and if they have, what was the outcome?”
Tweets
This is a ridiculous framing. It’s not that you’re getting $1400 and it’s costing you $5757 – it’s that you’re getting $1400 and it’s costing your kids $5757, plus interest. https://t.co/8x0umfP0S7
— Zack Kanter (@zackkanter) March 6, 2021
If you ever wondered whether you would have had the confidence to be a contrarian during the tech bubble, you're getting a chance to find out right now.
— Jesse Livermore (@Jesse_Livermore) March 7, 2021
Wrap
This from Trading Economics:
The Dow Jones surged more than 600 points to a fresh all-time high on Monday as investors focus on prospects of a global economic recovery and progress towards fiscal stimulus and shrug off stubbornly high Treasury yields. The Senate approved President Biden’s $1.9 trillion stimulus bill on Saturday and the House is seen passing it on Tuesday while Treasury Secretary Yellen said she doesn’t see the new aid package causing an inflationary problem. Comments from David Tepper, founder of Appaloosa Management, also helped to lift investors’ mood. Tepper said it’s very difficult to be bearish on stocks right now and thinks the sell-off in Treasuries that has driven rates higher is likely over. Meanwhile, the S&P 500 was up almost 1% while the Nasdaq struggled to book gains as rising rates are set to hurt companies relying on easy-borrowing and lead to less favourable valuation models for some hot technology shares.
In particular:
- long duration (FAANG etc.) stocks down,
- short duration stocks (DJIA) up,
- commodities fairly flat,
- bond yields up, but not materially: 10Y at 1.6%,
- the dollar continues to rally, against virtually everything,
- Chamath SPACS (CLOV, IPOE, IPOF) all fading. These stocks, along with Tesla and ARKK have been relentlessly pumped on CNBC and are finally coming down towards the NPV of their dividends.
I know @Zerohedge is complete trash that will immolate your wallet, but at least back in 2012 or so when I was last a regular reader, I never noticed them publishing pump pieces from paid stock promoters as news. The level of grift in this market is embarrasing for humankind.
— Midwestern Hedgie (@MidwestHedgie) March 8, 2021
It's not like I wanted to research all this stuff.
— Rudy Havenstein, West Coast Chillin' (@RudyHavenstein) March 8, 2021
Many years ago I naively thought we had people in authority who would step in to stop bad guys.
Now I realize the people in authority often are the bad guys.
Politics
The real reason kids are going hungry, according to Rod Liddle, is that changes to the economic structure of society have resulted in a huge change in the role of women in the past generation or two. He particularly identifies the downgrading of the role of fathers in bringing up their own children. He has a point, even though he makes it in a particularly confrontational way.
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