Overall: She smiled. A forced, uneasy smile. Puckered up, blew a kiss. And turning from the mirror, Janet made her way down the hall. To a private office. Its walls covered by her only remaining forecasting tools. You see, the Fed’s models ceased working long ago. Taylor Rules, Phillips Curves, and so many other fantastic formulas all failed to explain our new reality. Which left one tool; television. The window into

Hope all goes well… “The poor are angry,” said the CIO. “The rich are angry too,” he continued. “Both feel manipulated by politicians and policy makers.” The last bond vigilante cried out in agony. Equity bears groaned in the distance. As the power of negative interest rates rippled across the globe. “We all feel manipulated, everyone sees injustice.” But computers don’t feel injustice, they don’t care, they ride tre

“Today’s most important question is whether the inexorable trend toward zero is good or bad for stocks,” explained Lithium, hands free on Highway One. “The more we have considered this simple question, the better we’ve become at articulating a simple answer.” Low rates are quite obviously supportive for stocks, at least in America. Where the S&P 500 now trades at all-time highs, with bond yields at historic lows.

Hope all goes well… Dusted off an anecdote about unconventional policies from Feb 2015 (see below). Happy Fourth. See you next Sunday with full weekend notes. Week-in-Review (stats expressed in YoY terms): Mon: Renminbi hits new lows, Israel/Turkey restore full diplomatic relations, EU M3 +0.3 to +4.9%, Spain’s People’s Party (Rajoy) wins 33% of votes, Italy wage growth record lows, BIS warns of “risky trinity” of hi

Week-in-Review (stats expressed in YoY terms): Mon: Renminbi hits new lows, Israel/Turkey restore full diplomatic relations, EU M3 +0.3 to +4.9%, Spain’s People’s Party (Rajoy) wins 33% of votes, Italy wage growth record lows, BIS warns of “risky trinity” of high debt-low productivity-maxed out monetary policy, Moody’s cut’s UK outlook to negative, Mexico retail sales +10.6%, Brazil current account positive (2nd time

“When I was in the third grade I thought that I was gay, because I could draw, my uncle was, and I kept my room straight,” sang Teddy, exuberant, wild, dancing. “I told my mom, tears rushing down my face, and she’s like: Ben you’ve loved girls since before pre-K,” he cried out, hands high, our family singing ‘Same Love’ along with Macklemore, our favorite rapper, performing live. “Yeah, I guess she had a point,

Hope all goes well… “What does it mean to leave the EU?” was Google UK’s top EU-related question following the Brexit vote. “What is the EU?” was the 2nd most popular. “Which countries are in the EU?” ranked 3rd. “What will happen now that we’ve left the EU?” came in 4th, though it should’ve been 1st. And when I typed “Why” into Google, of the infinite potential auto-fills, it selected “Brexit?” as my 1st choice, “di

Nothing really matters, except things that really matter. When the Berlin Wall fell in 1989, that really mattered. Because it marked the end of a war that divided. Beginning a prosperous peace that united. Then the Maastricht Treaty was approved in 1992. It contained convergence criteria that paved the way for Europe’s disparate nations to integrate economically. We’ve been on that path ever since, investors rewarded

Overall: “The economic outlook is inherently uncertain, so each participant’s assessment of appropriate policy is also necessarily uncertain, especially at longer time horizons,” said Janet Yellen, uncertain. “You know, obviously, there is a lot of uncertainty about what will happen to productivity growth, but productivity growth could stay low for a prolonged time and we have aging societies in many parts of the wor

“Today’s macro carry trades are found in emerging markets, and they’re inevitably cross asset trades,” explained the CIO. These opportunities arise because people who trade equities, foreign exchange, interest rates and commodities don’t really talk to each other; literally and figuratively. Correlations between these markets exists, but no one seems to care. Which creates opportunity. “It’s why in February you bough