Posts
SPX Sentiment Index
June 10, 2022 No change in sentiment. May 11, 2022 No change in sentiment at -16. Strategy hits new highs in this sell-off. May 6, 2022 Our SPX sentiment index continues at negative 16. There was a 1 day long reversal from -16 to +4 but this had no real impact...
Economic and company news – April 2022
April 8, 2022 - Canada Average Hourly Wages. A year on year increase of 3.4% is behind the latest inflation rate of 5.7% in Canada meaning workers continue to fall behind. Whilst employment continues to grow, those finding work, in the most part, are experiencing falling real incomes. April 7, 2022 -...
TINA – there is now
We've previously always heard the acronym, TINA (there is no alternative to holding stocks). Whilst stocks may not have themselves offered an attractive yield compared with history at least they were paying more than the 10 year US treasury. As such this was often put forward as an argument to prefer stocks over bonds. However,...Continue reading
Economic and company news – March 2022
March 31, 2022 - US Personal Spending. This number which covers both services and manufacturing is holding up well, though it could be argued there is a lower trend. March 31, 2022 - US Personal Spending. As prices jump, we'd expect spending to fall. The prior 2 months were all over the place...
The Fed should not have control of monetary policy
Does the Fed understand QE? Over the time the Fed has been conducting QE, there has been and continues to be much talk of its failure to achieve its aims*. In this post, I'll look at those criticisms and ask why perhaps the Fed continues to conduct the same policy year after year despite openly...Continue reading
3D Economics: Part 2. The avalanche awaits.
The current dilemma central banks are struggling with is how to move money away from the savings economy and into the current, consumption economy. Unfortunately, this will require them to undo much of what they have spent the last decade doing, buying financial assets. Whether people chose to hold their wealth in the form of...Continue reading
3D economics – the confines of monetary & fiscal policy
This post discusses why monetary and fiscal policy require certain economic conditions to be present if they are to be successful in raising real GDP. In this article I explain the interaction of monetary and fiscal policy inside an aggregate economy framework which can be visualised in 3 dimensions. This 3D shape morphs over time...Continue reading
Bitcoin is the new reserve currency
Given the title, this may seem a strange starting point. Bear with. The below is a chart of Tesla. Love it or hate it, it doesn't change the fact this company has seen stellar growth in its share price. The chart below shows a price increase from around $4 in 2010 to over $800...
The future will be very different from the past
This is more of a sci-fi type prediction of some dystopian society and hence hopefully very unlikely to play out for real! Here is how events may play out. There is a need for massive fiscal and monetary support whilst the virus is spreading; Governments and central banks work together to stimulate spending, round after...Continue reading
2021 Investment outlook
Whilst 2020 was a tough year for many, that does not mean 2021 cannot be even more extreme. Monetary policy will continue to be extremely easy throughout 2021 unless the virus is beaten back and inflation shows up very quickly. Whilst the Dems took both Houses, they do not have a majority that would allow...