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2017 Commentaries

2018 Financial Market Outlook

This time of year you are no doubt receiving volumes of research from banks and brokers on the financial market outlook for 2018. And most likely these publications (if printed) would resemble oversized coffee table books. Now I’m sure there exists something of value inside many of these documents – but given all the sanitized […]

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Dammit, Janet....again

We had three major central bank meetings during a 24-hour period this past week, and in the aftermath the global financial markets collectively yawned. I suppose after a year characterized by never-ending “Yksnim” moments, it was a fitting conclusion to 2017. However, underneath the dull surface of statements, press conferences, and projections, there was a […]

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The current set of bears have forgotten that QE worked

Last week provided yet another example of why spoos and blues is such a powerful trading strategy. This past Thursday, between 11am and 11:30am, spoos air-pocketed 1.6% on what was later confirmed to be an incorrect ABC news story. Now that might not sound like a large move in the grand scheme of things, but in […]

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Economic Machines That Go “Beep”

Over the last week or so a number clients requested both clarification and elaboration on my most recent note, “Fiscal Stimulus: Another Force for Disinflation.”. Generally speaking, folks wanted more precision on the impact of corporate tax reform on wage rates, goods prices, and share prices. So let me, in my own peculiar way, give […]

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The Taper Trance and Contraction Coma

Earlier this month the Fed began to cap the quantity of maturing proceeds they regularly reinvest back into the Treasury and agency MBS markets. This marked a crucial turning point for the Fed balance sheet, as it kicked off the first meaningful contraction of the post-crisis era. In addition, last week the ECB cut back […]

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Market message to Trump: Please, no JT!!!

The Powell trial ballon went out last week and risk markets applauded. This week Taylor got a nudge into the center ring, and traders are all choking on their breakfast sandwiches. Most market folks, myself included, have leaned toward the idea that the Trump Fed would NOT be led by a hawkishly indoctrinated academic who […]

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