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Rate Hike Timing and the U.S. Treasury Yield Curve are Divorcing

December 13, 2017

Summary The fed funds rate nearing and/or exceeding the so-called reversal rate explains the recent divergence between rate hike timing and the U.S. Treasury yield curve. Investors remain in a ‘show-me’ mindset regarding inflation, refusing to follow the Fed’s lofty goals until inflation and wage growth become realized. Comment The chart below shows market-based expectations for… Continue reading Rate Hike Timing and the U.S. Treasury Yield Curve are Divorcing

Newsclips

The Financial Conditions Paradox

December 13, 2017

The influence of ECB and BOJ policies is contributing to looser financial conditions even as the Fed marches on in tightening policy.

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Newsclips

Talking Bitcoin

December 13, 2017

Comment Yesterday Jim was on CNBC with Rick Santelli discussing bitcoin futures and Europe.  The Wall Street Journal – John Burbank’s Passport Hedge Fund Hopes for New Savior in Bitcoin Fund plans to launch a new arm that focuses only on cryptocurrencies John Burbank made millions spotting a bubble in subprime mortgages before the financial crisis.… Continue reading Talking Bitcoin

Newsclips

The FOMC Decision Is Today

December 13, 2017

The Wall Street Journal – A Faster Pace of Fed Rate Increases Could Rattle Markets Two years into the cycle, stocks have been rising steadily and 10-year Treasury yields have lingered near key level of 2.4% Investors have greeted the Federal Reserve’s recent string of interest rate increases with some of the most docile market conditions… Continue reading The FOMC Decision Is Today

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Newsclips

Hedge Funds Look Towards Machine Learning

December 13, 2017

The Financial Times – AQR to explore use of ‘big data’ despite past doubts Hedge fund runs experiments to see if it can find profitable patterns using machine learning The $208bn hedge fund group led by Clifford Asness has begun to explore how “big data” such as satellite imaging can help it manage money, a… Continue reading Hedge Funds Look Towards Machine Learning

Newsclips

Alabama Senate Race – Another Blown Call

December 13, 2017

The New York Times – Alabama Election Results: Doug Jones Defeats Roy Moore in U.S. Senate Race Doug Jones, a Democrat, won the special election on Tuesday to fill the United States Senate seat vacated by Jeff Sessions, now the attorney general. Mr. Jones aimed to create a lead in the urban counties that include Birmingham and Montgomery,… Continue reading Alabama Senate Race – Another Blown Call

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Monthly Reports

Inflation Watch – Energy Props Up The Headline Number

December 13, 2017

Bloomberg – U.S. Inflation Picks Up on Energy Costs; Core Gauge Slows U.S. inflation picked up in November thanks to a jump in energy prices yet unexpectedly cooled when excluding food and fuel costs, which could factor into Federal Reserve discussions this week on how fast to raise interest rates. The consumer price index rose… Continue reading Inflation Watch – Energy Props Up The Headline Number

Newsclips

Is The Dollar Too Hated?

December 13, 2017

Bloomberg Business – Traders See No End to the Dollar’s Pain in 2018 For the almighty dollar, 2017 has been nothing short of abysmal. Next year might be even worse. Despite a recent bounce back, analysts and investors say the greenback could lose more ground against the euro and yen as the prospect of strong economic… Continue reading Is The Dollar Too Hated?

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Newsclips

Bond Investors Have Their Eyes On The Fed

December 13, 2017

Bloomberg View – Charles Lieberman: Fed and Bond Investors Face a Rude Awakening More rate hikes could become a necessity as the increased cost of labor brings higher prices. Putting this all together, policy makers are unlikely to know when they need to hike rates until it is too late. After they go over the edge… Continue reading Bond Investors Have Their Eyes On The Fed

Newsclips

More On U.S. Oil Exports

December 13, 2017

Bloomberg.com – The U.S. Is Exporting Oil and Gas at a Record Pace U.S. crude production, refining rates rise to historic highs Sweet, light and cheap U.S. oil attractive to global buyers The world’s largest oil consumer exported more hydrocarbons than ever before in 2017 and shows no signs of slowing down. You name it —… Continue reading More On U.S. Oil Exports

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Newsclips

Money Flow Update

December 13, 2017

     OPEN  Webcast: Money Flow Update In the webcast above, Jim Bianco discusses ETF flows during the ongoing record risk-on period.

Newsclips

The Fed vs Tax Cuts

December 13, 2017

The Wall Street Journal – Justin Lahart: The Fed Versus Tax Cuts The central bank has pushed back against tax cuts in recent years by raising rates The Republican tax plan has been driving the market. The Federal Reserve could be next behind the wheel. The tax plan’s final details are still in flux, but whatever form… Continue reading The Fed vs Tax Cuts