The Philosophical Investor's Blog

The Braveheart Fed

Jay Powell vs. Paul Volcker

I must say that when I read this tweet last week, I felt heard, listened to, and understood. It was cathartic in a way.

The Kobeissi Letter September 27, 2023

I know I’m being a bit melodramatic, but there are so many cross-currents in the economy that it has made forecasting quite challenging.

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More Ackman: We Aren't in Kansas Anymore

I have written continuously over the last year or so about critical yields for the 10 and 2-year Treasuries such that if they were breached, the probability of them going higher would be quite elevated. 

Looking at the following 10-year Treasury chart,

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China Rebalancing: Daunting Math that Will Impact the World

 China Rebalancing: Daunting Math that Will Impact the World

Given China’s importance to the world economy, I wanted to focus this week’s post on some of the challenges China is facing in the short and long term.

China’s Economy

From an investor perspective, there is very little optimism that China’s economy will experience stronger growth after severely disappointing in the wake of its Covid reopening.

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Beans, A fly, Zverev, Djokovic, and Russell

Bertrand Russell Novak Djokovic

What Happened_ Alexander Zverev

Beans the Cat

Heather and I have ended up with a rescue kitten. I won’t go into the circumstances, but his name is Beans. This is what he looks like.  

As you can see, his eyes are very intense.

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On Second Thought: Lessons from Frozen Blueberries

frozen blueberries

The pictures that follow seem odd at first. It’s not unreasonable to ask why I took pictures of frozen blueberries and felt compelled to share them via my blog.

I had an epiphany recently when adding frozen blueberries to my smoothie.

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Jackson Hole and a Future Toll?

Jackson Hole Powell Signals

Fed Chairman Jay Powell spoke last Friday at the Jackson Hole conference for Central Bankers. He was pretty clear that the Fed would remain vigilant in its fight against inflation. 

Powell Signals Fed Will Raise Rates if Needed Jackson Hole August 2023

The economy is doing better than the Fed expected,

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Break on Through to 2 + 2

Break on Through to 2 + 2

You know Covid destroyed supply

Stimulus exploded demand

Inflation ran

The Fed cried

(What does the 10-year do?)

Break on through

To the other side

The 10-year Treasury yield broke through to a new cycle high and is now back above where it last peaked in 2008.

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Zip

ZIP CPI

Last week the CPI report was released. One can see that shelter is now by far the biggest component of inflation. Non-Housing Services are growing at a moderate rate while Core Goods prices are declining.

Core CPI Major Component August 11, 2023

This chart shows how CPI excluding shelter has been moderating quite significantly,

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Only Time Will Tell and Bill Ackman Battling Back

Bill Ackman

This will be a rather short blog following up on last week’s focus on key levels for the 2 and 10-year Treasury yields. 

I’m a bit tired as last night (Thursday), I had a flight connection through D/FW Airport to return home to Orange County.

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All Eyes on the Consumer

All Eyes on the Consumer GDP

One of the things I’m constantly reminded of from playing tennis is the power of consistency. If you can play each facet of the game reasonably well, you don’t have any glaring weaknesses, and you have the anticipatory skills and speed to have effective court coverage,

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