weekend notes

Hope all goes well… “What comes next?” We hit levels of inequality last seen in the late-1920s. QE amplified it by inflating asset prices, sparking political upheaval. “So how can QE be the dominant solution to our next downturn?” asked the CIO. The next cycle will bring something new, vast infrastructure spending, direct payments to people, possibly UBI, but funded by what? Budget deficits are al

“Schumpeter’s creative destruction no longer applies to America’s economy,” said the pioneer in Modern Monetary Theory (MMT). “Our companies do well, expand. Then we have a financial crisis.” Almost always policy-induced. “Companies with the best capital structures survive.” No matter how useful their products are, they’re left standing. “Schumpeter’s creative destruction is where the companies wi

Hope all goes well… “Vice Chairman Clarida said policy normalization is like crossing a dark room barefoot — you step carefully,” said the CIO. “This implies that the biggest risk the Fed faces is a stubbed toe and a quick retreat.” But given the dominant role of liquidity in today’s market structure, the profound complexity of our financialized global economy and its growing susceptibility

“Can’t really go into it Dad,” said Olivia (15). I’d asked for details, she’d come home at sunrise, empowered, electric, alive. “Mom said you had an intense all-nighter. I want to make sure you’re okay Liv.” In the 1970s, an inspired paramedic created America’s only first-responders program manned entirely by high school students. Forty-nine years later, every 911 medical emergency within our smal

A“The pendulum has returned to its starting point,” said the CIO. “We had a massively regulated, terribly inefficient economy,” he continued. “Carter started deregulating. Then Reagan. They got government out of the rule-making business.” Efficiency surged. “Deregulation made the market the final arbiter of which businesses succeeded and failed.” But as lobbyists swarmed the swamp, antitrust legis

Hope all goes well… The US government remained shut. But pollsters carried on. 81% of Likely Democratic Voters favor a Green New Deal, focused on climate change, income inequality and racial injustice — 63% of Republicans are opposed, Independents are evenly divided. 59% of voters support raising the marginal tax rate on the richest Americans to 70%. Democrats overwhelming support the tax hi

Hope all goes well… “I’m not bothered by the government shutdown,” said the investor. “I feel for the people directly affected, but it won’t last forever. And besides, if you shut the government two months of every year, I bet we discover how to make it more efficient,” he continued. “And I’m guessing Trump wants a deal with China, so I’m not overly bothered by that. I’m more worried about how the

Hope all goes well… “Abandoned babies in the streets,” bellowed Biggie Too. “Crawling around crying about this and that,” continued the Chief Investment Strategist for one of Wall Street’s too-big-to-fail affairs. “They’re screaming – the economy is slowing, GE is going broke, Mommy, Mommy, where you at?” barked Biggie, in baritone. The Dec 19th Powell comments left everyone scared our Fed C

Hope all goes well… Wishing you and your family a happy, healthy, prosperous new year. As you know, I take late-Dec off from writing. Lindsay Politi has stepped in. She is launching a fund focused on emerging opportunities in inflation-related markets that will complement One River’s existing Long Volatility and Systematic Trend funds. We see the world in a period of major economic and political t