Yesterday Jim Bianco, Ben Breitholtz, and Peter Forbes hosted a conference call titled Low Volatility & Concentrated Returns. The handout can be found here (starts with the second post). The mp3 replay can be heard below: Your browser does not support the audio element. The webcast replay is below:
Bloomberg Business – Slower Hiring, Lower Unemployment Offer Mixed U.S. Labor Signs Wage growth remains slower than peak of previous expansion Participation rate declines, as does underemployment rate The U.S. labor market gave mixed signals in May, with a decline in the unemployment rate to a 16-year low contrasting with below-forecast hiring and wage growth, Labor… Continue reading Employment In Pictures
Council on Foreign Relations – A Few Words on China’s “New” Exchange Rate Regime So far, though, the appreciation against the dollar hasn’t done more than offset the downward drift in the yuan’s value against the basket that occurred earlier this year as the dollar generally depreciated. The dollar’s “Trump” rally has more or less… Continue reading Deciphering the Latest Moves in the Yuan
Comment The chart below shows Citigroup Economic Surprise Indices in the top panel and Data Change Indices in the bottom panel by region since 2014. Nearly all of the world’s economies have been suffering a streak of data misses sending surprise indices toward zero. Economic data change indices, which measure data changes in relation to one-year… Continue reading Risk-off on the Horizon with Concerted Turn to Economic Data Misses
Bloomberg – How Trump’s Chaotic Presidency Threatens the Economy Few have adequately priced in the possibility of 5 large, unusual downside risks. Here are the five biggest scenarios I’m aware of, and how the chances of each have changed since Trump won the presidency in November: 1) Trade War (unchanged), 2) Government default/shutdown (increased chance), 3) The president causes… Continue reading Policy Uncertainty Abating, Markets Still Couldn’t Care Less
Comment Despite some tightening in recent polls and complaints by The Economist (below), bettors believe May is still the overwhelming favorite. The vote is next week. The Economist – The middle has fallen out of British politics The leaders of both main parties have turned away from a decades-old vision of an open, liberal country It is… Continue reading The UK Election Is Next Week
The Washington Examiner – Fishwrap: Newspaper circulation at 77-year low Circulation of daily newspapers has dropped to a 77-year low, signaling an end to print and a shift to all-digital delivery, according to a new industry review. The Pew Research Center said that circulation has reached a new low of 34.6 million, six million less than… Continue reading Newspapers Go From Bad To Worse
The Absolute Return Letter – Oil Price Target: $0 (by 2050) Low-cost, high-grade coal, oil and natural gas – the backbone of the Industrial Revolution – will be a distant memory by 2050. As I see the landscape in front of me, as far as energy is concerned, three observations stand out: * the world is… Continue reading The Most Bearish Oil Call Ever
Research Affiliates – Public Policy, Profits, and Populism – The recent decades-long public policy focus on economic stability has resulted in the unintended consequences of a profits bubble, collapse in securities yields, and wage stagnation. – In response to labor’s diminishing income share, a swell of populism suggests change is coming, and the form that change takes—reform… Continue reading Policy, Profits, and Populism
The Economist – What if the bitcoin bubble bursts? Is the latest frenzy like tulip-mania, a gold rush or the dotcom boom? This may seem like a dangerous way to generate innovation. Investors could lose their shirts; a crash in one asset class could spread to others, creating wobbles in the financial system. But in the… Continue reading Bitcoin, A Healthy Bubble?
Bloomberg Business – Fast Growth Is Actually a Threat to Trump Last week’s drama surrounding the firing of the FBI director, James Comey, resulted in very little movement in Gallup’s daily job approval for President Donald Trump. On May 6, 40 percent approved of the president while 54 percent disapproved. A week later, 39 percent approved while 56… Continue reading GDP Growth And Trump
The Financial Times – Grantham says higher valuations here to stay Healthy profits, low rates and lack of euphoria suggest no bubble for Wall Street The US stock market has entered an era of permanently higher valuations and probably has further room to rise, according to Jeremy Grantham, the founder of asset manager GMO and a… Continue reading A Bear Throws In The Towel