Blog Archives

Out of the Long Emergency

Out of the Long Emergency

I’ve been wrestling with the theory that we have had a regime change from the credit dislocation cycles that have led to emergency-type measures from the Fed via balance sheet expansion and near 0% interest rates to one that has inflation as much more of a central concern due to powerful fiscal expansionary tendencies and other factors such as onshoring of manufacturing,

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Here We Go Again

construction employment

Just when the market prices in four cuts for 2024, either the Fed comes out to talk the market down or data is released to suggest investors are being too aggressive in pricing in the number of Fed cuts.

We are now back to the point where the market and Fed are once again aligned on the number of cuts in 2024.

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GDPtopia

GDP

Last week, the GDP report for the 4th quarter was released as well as the Fed’s favorite inflation index, the Personal Consumption Expenditures price index (PCE). The Fed should be very pleased with what the reports revealed and how it has defied the overwhelming consensus that a hard landing was necessary to break the back of inflation.

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Patience Is A Superpower: Charlie Munger and Sudoku

Charlie Munger

The world lost an intellectual and investing giant with the passing of Charlie Munger. He was due to turn 100 on January 1st. He passed away rather quietly and surprisingly for someone with such a large personality and admittedly big mouth.

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Breaking Bad? (or Good?)

Breaking Bad? (or Good?) hawkish pause

Last week may have finally been the week when the Fed aligned with markets that the peak in rates may be in for this cycle. The Fed held rates in what was initially categorized as a “hawkish pause.” It was during the Jay Powell press conference that the market started to believe that maybe the Fed was done raising rates.

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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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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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M2 and Taking the Air out of the Inflation Balloon

M2 and Taking the Air out of the Inflation Balloon

Milton Friedman famously said that “Persistent inflation is always and everywhere a monetary phenomenon.” I have never been much of a monetarist because I thought there were many other factors influencing inflation, particularly demand factors, technological innovation, demographics, and the presence or absence of animal spirits among investors and capital providers.

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Turning up the Heat and Icarizing the Economy

CWS Turning up the Heat and Icarizing the Economy

Last week was my birthday, and I chose to celebrate it by heading to my home in the desert to check out some work that had been done and to play tennis.  This picture from my car dashboard shows a couple of pieces of interesting information.

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R.I.P. Sam Zell

Sam Zell

Legendary real estate investor Sam Zell passed away last week at 81. He was clearly a larger-than-life figure who communicated in a very unfiltered way such that you always knew what he thought and where he stood. 

In the last year or two,

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