Out Of The Frying Pan Into The Frying Pan

“The skill of the sports player is not the result of superior knowledge of the future, but of an ability to employ and execute good strategies for making decisions in a complex and changing world. The same qualities are characteristic of the successful executive. Managers who know the future are more [...]


The Terminator

“Our Russian psychosis has two curious features. Firstly, that an 80 per cent Christian Orthodox society for some reason reacts to a Mayan calendar which no one has ever seen. And secondly, that the end of the world is perceived as an economic crisis that can be survived on the banal [...]


Today’s Employment Report Changes Little

The BLS has reported the employment report for November (LINK).  The markets are taking this bullishly, as the jobs gains were modestly above consensus.  There are flies in that ointment; the report looks mostly like a “nothingburger”.  

Once again, the 25-54 age groups, and sub-groups within that age range, showed no job growth year [...]


“Risk On” and “Risk Off” Are Different Now

Three days ago I put up a post arguing for a “risk off” portfolio positioning.  This extends that thinking.

It used to be simple:  risk off was Treasurys, risk on was stocks and commodities.  Last summer saw mind-numbing volatility in that manner, and a quick drop in the Russell 2000 ETF (IWM) from 85 in July to [...]


Dealing with Financial Repression

Given the article posted today by Econophile on the WSJ and inflation, I thought it timely to submit some quantitative considerations for anyone with savings who has to deal with interest rates on savings that are below the rate of price increases for consumer goods and services. 

The WSJ  writer’s view is that the authorities “should” inflate away debts.  [...]


The Great Immoderation

In both 1960 and 1980, the American people were enduring their fourth recession in about 12 years.  Each time they elected as President a man who pledged to get the economy moving again.  Each had a program of tax cuts, Federal deficits, debt monetization, and increased military spending.  In JFK’s case, his Keynesian economists followed [...]


QE To Infinity: Not?

This was from Bloomberg this morning:

Federal Reserve policy makers are signaling they favor an abrupt end to $600 billion in Treasury purchases in June, jettisoning their prior strategy of gradually pulling back on intervention in bond markets.

“I don’t see a lot of gain to reverting to a tapering approach,” Atlanta Fed President Dennis Lockhart [...]


Selling The Rebound

Sir Isaac Newton posited that every action has an equal and opposite reaction.

In markets, when an action has an opposite but unequal reaction, that often points to a trend, especially when a trend is due to be interrupted or change for good.

On some truly ugly macro news yesterday, stocks were weak yesterday.  Surging [...]


Stranger And Stranger In A Strange Land

In reviewing the news this morning, I came across something which reminded me of a quote of one of T. S. Eliot’s Four Quartetst:

“What you do not know is the only thing you know”.

It is getting so that I don’t know if people are living in the same or parallel universes.  Here is [...]


Welcome DoctoRx As A New Contributor

I welcome DoctoRx as a contributor to The Daily Capitalist. The Doc writes about investing and markets, something I thought we needed to balance out my “macro” perspective on the economy. I should say that while the Doctor tends to agree with my macro analysis, he has his own views about [...]