Overall: “Stimulus fears drag $1trln of bonds back to positive yields,” cried the Financial Times. And he sipped a skinny latte, afraid of whole milk. “The EU is in a critical situation,” warned Merkel, the headline racing through the Twittersphere, embedding itself into the homepage of every website on his iPad. The horror of European disintegration flashed through his mind, which was even scarier than the prospect

  “John McEnroe would lose 6-0, 6-0, 6-0 to today’s top ten players,” he said. “Literally, he couldn’t even play this game.” We were watching Djokovic dismantle Monfils at the US Open. “The history of competition is the study of knowledge and skill.” McEnroe’s skills have long since become common knowledge. “For decades, knowledge and skill were highly integrated in our industry. Which was probably correct, beca

Hope all goes well… “Kimberly Clark fell 3.25% on Thurs/Fri, that’s more than one year’s worth of dividends, up in smoke in just two trading days,” said the CIO. “Kinder Morgan fell 2.5%, also more than the annual dividend.” The DJ Utility index fell 3.4%, that’s equal to one-year’s dividend. Apple’s 4.8% two-day decline exceeded two year’s of dividend payments. “And for those who own bonds to protect their equity po

Overall: Kaboom! The earth shook. A manmade tremor. The chubby North Korean kid had popped off another plaything. The dark side of mankind’s technological coin. You see if Apple can waterproof an iPhone 7 supercomputer, any paranoid dictator can eventually miniaturize a nuclear weapon; if we allow him. And we have. Naturally, every coin has two sides, and mankind’s eternal tale is shaped by how we react to our tails.

Overall: “The biggest things tend to be done by people who primarily believe in a mission and are not trying to build a company,” said Mark Zuckerberg in Rome, describing common traits of successful entrepreneurs. “They’re done by teams, not by individuals; and by people who just don’t give up,” he continued. A SpaceX rocket exploded. An awe-inspiring fireball. A shockwave whose force rippled outward in direct propor

“There’s no way out, they need to stimulate through it,” said the CIO. In 1965 the government spent 3.25% of GDP on research and development, today its 1.25%. That missing 2% of America’s $18trln economy equals $360bln of annual R&D investment. Gone baby gone. In 2000, NYC spent 8% of its budget on healthcare and pensions, today that’s 29% and rising. “Taking these factors into account, developed economies have t

Hope all goes well… “The Fed faces the choice between allowing a US bubble to form and blowing up the world,” said the CIO. “And they’re trying to have it both ways.” No one likes facing a dilemma, particularly PhD’s. They’re too smart. “US banks have deleveraged, corporates too. Households deleveraged and the government took on that debt.” America is inoculated from deflation relative to the rest of the world; we’re

Hope all goes well… Dusted off an anecdote from summer 2015 that’s worth a repeat in the context of promising political dynamics in South Africa, Brazil, India and Argentina (see below). Taking my annual August break from writing. See you next Sunday with full weekend notes. Week-in-Review (stats in YoY terms): Mon: S&P maintains negative HK outlook, India appoints Urjit Patel central bank governor (inflation haw

Week-in-Review (stats in YoY terms): Mon: S&P maintains negative HK outlook, India appoints Urjit Patel central bank governor (inflation hawk), UK economic surprise index 3yr high, Mexico Q2 quarterly GDP contracts 1st time since 2013 (+2.5% yoy), Fed’s Fischer “inflation within hailing distance of 2%,” S&P 500 trailing 12mth PE hits 25.3x (vs post War avg 19.2x), S&P -0.1%; Tue: China FX basket new lows

Hope all goes well… Dusted off an anecdote from summer 2015 about quantum transformation (see below). Taking my annual August break from writing. See you again in September with full weekend notes. Week-in-Review (stats in YoY terms): Mon: Japan GDP +0.2% (exp +0.7%) IP -1.5%, 10yr Gilt yield record low 0.50%, US declares Puerto Rico Zika health emergency, US Empire manufacturing survey -4.8 to -4.2%, S&P +0.3%;