ERP-RIP

If we compare like with like, we find that the semi-mythical ‘equity risk premium’ may not be quite the yardstick it’s made out to be. In fact, the right sort of bonds have proven every bit as rewarding as stock, over the years and it’s cheap to bet they might do so again

To access this post, you must purchase Annual Subscription or Monthly Subscription.

Dead Cat or Deep Value?

Since their Lockdown lows, commodities have performed as well as any other asset, though they still remain generally depressed. Can they now continue to rise?

To access this post, you must purchase Annual Subscription or Monthly Subscription.

Fiscal Free Lunch

[This is the first of a series of short bulletins called, ‘The Course of the Exchange’, in memory of John Castaing’s widely-read updates, posted in Jonathan’s Coffee House in Change Alley, 300 years ago]

With the latest CBO estimates for the US Federal budget for August just in, we are again in a position to take stock of the scale of the burden which the COVID-19 lockdowns and more general restrictions have imposed upon the nation’s finances. It does not make for happy reading.

To access this post, you must purchase Annual Subscription or Monthly Subscription.

The Fall Approaches

OPEN ACCESS FOR A LIMITED TIME ONLY.
It’s not just the leaves that often turn when the year begins, with gathering pace, to slip towards its chilly end. Markets often do, too.

Given this backdrop, the sell-off in the Nasdaq – in the marvelled-at ‘Growth’ stocks, in the FAANGs, and in Tesla – comes at a moment which is particularly intriguing for reasons which go far beyond whatever coup SoftBank may or may not have attempted and whether those irritating Lockdown Livermores have finally gotten their comeuppance.

MMT Vessels Make The Most Noise

As a sort of Keynes-manqué, Stephanie Kelton’s moment in the limelight is being granted her for much the same reason as was that of her more illustrious predecessor: she is telling free-spending politicians what they always want to hear – viz., that their habitual incontinence is statesmanship of the highest order.
With our good professor never missing an opportunity to remind anyone and everyone that her book – a veritable almanac of economic hocus-pocus – tops the non-fiction charts (surely a gross miscategorization if ever there was), we must therefore re-emphasize our view that the REAL peril of Magic Money Tree economics – aka MMT – is what it means for the private sphere in general and the scope for genuine entrepreneurship in particular, NOT whether it causes prices to rise or not. The question is one of liberty, not inflation; real prosperity, not growth.

To access this post, you must purchase Annual Subscription or Monthly Subscription.

Chasing the Dragon

As is by now widely reported, China stocks have been on something of a tear in the past few weeks, with the CSI300, for example, up by around 20% in that time. The usual suspects have been at work as the PBOC has encouraged a renewed money flood into being and those desperate for an income – and possibly with little else to do, at present – are enticed back into what is merely the latest in the nation’s rolling series of mania and speculative booms.

To access this post, you must purchase Annual Subscription or Monthly Subscription.

Hoping for Growth. Searching for Value.

Thanks very much to my old friend, Steve Sedgwick at Squawk Box Europe for the chat this morning. We looked at Growth v Value, the US v ROW, we touched on bonds and borrowing, money supply, inflation, lockdown, commodities & gold – all in under 10 minutes!

To access this post, you must purchase Annual Subscription or Monthly Subscription.

Saturn Devours His Children

A recent Wall St Journal article gave vent to a scare-story full of Underconsumptionist claptrap, carried under the catchy headline: “The Coronavirus Savings Glut”. Ironically, and only a day later, the paper ran a second piece entitled “How Coronavirus Upended a Trillion-Dollar Corporate Borrowing Binge and Kicked Off a Wave of Bankruptcies

To access this post, you must purchase Annual Subscription or Monthly Subscription.

After the Fall of Caffa

While politicians anxiously check the shifting weather-vanes of public opinion and scientists squabble over facts as well as interpretations, central banks are resolutely doing what they do best – wildly exceeding their briefs and trying to drown all problems in a flood of newly-created money. As ever, the underconsumptionists worry that a lack of demand will usher in deflation, in spite of all such efforts. Some of us, however, worry more about what it will do to supply. Here, we explain why.

To access this post, you must purchase Annual Subscription or Monthly Subscription.

Free Lunch Finance

The poster girl of the voguish crankdom that is Modern Monetary Theory (“MMT”) – Stephanie Kelton, has been out pimping her new book – “The Deficit Myth” – with a great deal of help from the unofficial PR department which she seems to have, nestled within the House Organ of Davos, the execrable FT.

To access this post, you must purchase Annual Subscription or Monthly Subscription.