We did it — with 8.5 million fewer workers

Last week, the BEA released its first estimate of real GDP for Q1 2021 at $19.09 trillion. In order to generate this level of GDP, the economy utilized an average of 143.35 million total non-farm workers throughout the quarter. Now if we look back one year ago,...

Is there a better hedge than the J’s?

So far, my spoos & J’s trade for 2021 is up over 10%, annualizing at just around 40%. In addition, my decision to steer clear of any form of traditional risk parity rate-style hedge for spoos and to opt instead for Janet and Jay (aka the J’s) looks to have been a...

Treetops over Weeds

Not a day goes by without a note coming through my inbox that contains a catchphrase like “in the weeds” or “under the hood” or “deep dive” or “market internals.” Now, to be sure, going for a deep dive in the weeds in order to study those market internals under the...

CNBC Appearance (17-Mar-2021)

A discussion of the FOMC meeting and inflation expectations on 17 March 2021. Watch video replay here. Subscribe today to read all of David's Recent...

BBHCs to throw their UST toys out of the pram

In the coming weeks, possibly even at this week’s FOMC meeting, the Fed is likely to indicate that it is not renewing the changes it made last year to the supplementary leverage ratio (SLR) rule for big bank holding companies (BBHCs). The original decision had...

Inflation is never and nowhere a fiscal phenomenon

The single most famous quote by Milton Friedman is almost certainly “Inflation is always and everywhere a monetary phenomenon.” And while we have all come to accept that there are many other cyclical and structural factors besides monetary policy affecting inflation,...

Macro Zoom (01-Mar-2021)

A discussion on the recent volatility in Treasury yields and how that will likely feed back into the risk asset, currency, and commodity markets. Watch video replay here. Subscribe today to read all of David's Recent...

Spoos will LOVE a 2% 10yr note

Today I want to make the case that higher expected future short-term interest rates will actually be quite supportive for risk asset markets. Of course, this notion runs counter to standard textbook stock/bond relative valuation arguments. Typically, higher future...

The Roaring DEFLATIONARY 20s

Everywhere one turns these days, somebody is using a “roaring 20s” metaphor. From CEOs to market pundits to Reddit short squeezers, the storylines are all the same. Pent-up demand, like we saw following the 1918–1920 pandemic, will very shortly kick off in the 2020s....
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