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Hope all goes well… “When a central bank undershoots its inflation target, it can promise to the public that it will overshoot in the future,” said Chairman Powell. “As it makes up for lost inflation, the bank would also be making up for lost growth,” he added. But of course, central banks cannot make up for anything that is lost. Central banks can only choose to pull real growth from the future to the present or pus

Hope all goes well… Dusted off an old anecdote about inequality and the powerful forces that propagate it (see below). I wrote it just 2yrs ago, summer of 2017, when Argentina issued a $2.75bln 100yr bond at a 7.9% yield (40bps above the average US State Pension Plan target return). And despite having defaulted eight times in their 200yr history, the Argentina 2117 issue was gobbled up. Those bonds now trade at 38 ce

Hope all goes well… Dusted off an old anecdote about trading, risk taking, seeing the future unfold in the past (see below). I give myself a break from writing each August to get some altitude, find a little space. See you again in September with full weekend notes.  Week-in-Review (expressed in YoY terms): Mon: China’s PBOC makes the Loan Prime Rate (LPR) the new benchmark for lending (results in lower borrowin

Hope all goes well… Dusted off an old anecdote about China’s use of the power of fiat money and how it fits into their broader approach to policy (see below). It’s something worth considering as the west shifts away from central bank independence. I give myself a break from writing each August to get a little altitude, find a little space. See you in September with full weekend notes.  Week-in-Review (expressed

Hope all goes well… Dusted off an old climbing anecdote from my days in the mountains (see below). I give myself a break from writing each August and try to get a little altitude with the family. Wishing the same for you and your crew. Week-in-Review (expressed in YoY terms): Mon: China let’s RMB fall through 7.00 and announces halt to US agricultural purchases in response to US trade pressure, China Caixin services

“Guess what happened today Dad?” yelled Charlie (10), biking in slow circles, waiting for me, some new story to tell. I’d just pulled into our driveway, another day of grinding it out in markets. “I got a leech on my ball sack!” he screamed, laughing, for all the neighborhood to hear. You see, Mara and I didn’t have four kids to turn around and pay others to work around the house. They do everything. Which means our

Hope all goes well… “All consequences are at your own risk,” warned the People’s Liberation Army in their viral video, delivered in Hong Kong’s local dialect, as troops and tanks conducted anti-riot drills. Courageous protesters carried on, tear gas tumbling. 1,000 Russian pro-democracy protesters were arrested last weekend. Moscow riot police beat the crowd. 600 hundred more were arrested yesterday as spontaneous pr

AHis two youngest swam in the Sound. Racing to a buoy. The water sparkled, late afternoon. And he sat on the beach, recalling such races with his brothers, decades ago, circles around the sun. In the distance was Long Island, rising abruptly, its cliffs a warm glow. His dad told him stories when he was little, about fantastic things. Dinosaurs and Wooly Mammoths. Asteroids and ice ages. Indians and arrowheads. If you

Hope all goes well… “Saw tremendous hedging this week in VIX options,” said Roadrunner, the market’s biggest trader in equity vol. “Looks like they’re buying the S&P, then buying 3x the equivalent amount of VIX calls. When vol (and the vol of vol) gets this cheap, maybe that’s the new way people will protect their portfolios instead of buying bonds,” he said, darting a look left, right. “And, at the same time, th

A“War is the continuation of politics by other means,” said the Commander, quoting Carl von Clausewitz. We were discussing geopolitics. “Negotiations that precede every conflict continue throughout every war,” he said. “We’re seeing that play out in real time right now, but in highly charged domestic political environment.” America’s military is non-partisan, faithfully defending the Constitution, obeying Presidents.