For the last 16 months I have spent very little time in these notes focusing on Europe. ECB reticence to act aggressively post the policy debacle of Dec 2015, combined with high levels of political uncertainty into 2017, created a very poor risk/reward outlook for European macro-based trades, in my opinion. In fact, in the […]

I imagine that as the finishing touches were being placed on the Fed minutes from the second floor of the Eccles building late this past Tuesday evening, the authors were all thinking - "I wonder how large the bond and stock market sell off will be after the release?". Everything about these minutes were hawkish […]

I realize that I have not written any notes since mid March - and I wanted to just give everyone an update on my brief hiatus from market commentary. Unfortunately, I needed to have two abdominal hernias surgically removed about a week ago. And naturally this has taken me fully out of commission. The most […]

It was just about one year ago that the market was licking its wounds from a second China devaluation scare. Back then I was writing notes such as “The Chinese Monkey on Our Back” (11-Feb-16), “Detente Between the Fed and PBOC Makes Spoos and Blues the Winner” (19-Feb-16), “Too Big to Peg: Can China Eventually […]

Based on rhetoric, it would be easy to claim that Trump’s foreign policy goal with respect to Europe is to encourage a breakdown. He has consistently praised the Brexit vote, explicitly stated that the EU is likely to fracture, and emphatically implied that the end of the EU would be highly beneficial for US global […]

On Valentine's Day back in 2014, when we were in full Spoos & Q's mode, I penned the following poem:   Roses are red Violets are blue Janet's a dove Buy more spoo   Then on Valentine's Day in 2015, when we were loving the Dax & Dollar trade, I put forth the following poem: […]

“Stability leads to instability” is one of Hyman Minsky’s most famous quotes. And his theory that complacency and confidence sow the seeds of future economic crises has become almost universally accepted across academic, policy-making, and financial-market circles. For Hyman, once concepts such as “The Great Moderation,” “Goldilocks,” “The Productivity Miracle,” “The New Normal,” or more […]

Since 2013, the concept of "secular stagnation" has become a key focus for both markets and policy makers. For those who need a quick refresher, the proponents of this idea argue that a combination of weak investment and strong savings causes a drop in both the equilibrium level of GDP growth and the risk-free real […]

Over the last two months my market discussions with clients and colleagues have centered exclusively on the expectations for Trump economic policies – specifically fiscal policy, regulatory policy, immigration policy, trade policy, and monetary policy. And in discussing each of these, it is worth recalling that a few days after the election, in a note […]

As our long time readers know, I do not write on a set schedule. I have no daily, weekly or monthly research product. I write when I believe there is something important to say. And my number one rule is to never waste your time. We are all sadly short time, with no easy way […]