Category central banks

Balloons and Common Sense. Lots of improbable things to consider over breakfast.

Rugby, Balloons and Employment Data – so much to consider this morning, but what this market needs a dose of common sense, understanding of central banks, and catharsis. Real interest rates and normalisation will provide solid foundations for real growth and recovery – not market froth!

Euphoric Hasty Markets are Mispriced – Steady and Calm – Consider Tesla.

Markets have a habit of getting over-excited. They get FOMO and become over hasty. Although the outlook is improving, there is certainly little to justify some of the more speculative hype dominating market moves. Time a bit of rational thinking and common sense – consider Tesla as an example of misplaced hopes.

Forget inflation – its interest rates that will set markets and drive new growth.

Around the globe everyone thinks inflation is beaten. It may well be, but the consequences will persist. Interest rates may not “pivot” the way market optimists hope, with profound implications for equities and bonds. We are into a new market cycle of normalised rates and corporate fundamentals. All-in-all, that’s a good thing for growth!

What Does 2023 Hold For Markets – Some Best Guesses!

I’ve no idea what might happen in 2023, but I don’t think its going to be as bad as some expect, but neither will it be as rewarding as others predict. Its likely to be another year of trading on what the mood is, what the numbers mean, and hoping to call it right. Hope, as they say, is only a strategy when you simply don’t know!

Kwarteng wins Financial Idiot of the Year as IMF warns on the dangers of debt and swaps… and Buttcon worth $1?

Good is bad, and bad is good as Kwasi Kwarteng wins the Financial Idiot of the Year award as the IMF warns about the consequences and dangers of $80 trillion of hidden swap debt and rising global debt levels. Should we worry? Probably.

Did the Fed just make a long term mistake? Is inflation a bad or good thing?

Jerome Powell signalled a slow-down in interest rate hikes – and markets loved it. But did he just make a long-term mistake by not decisively signalling the end of the era of monetary and market distortion? There are lessons to be learnt, not least being the role of inflation in a buoyant economy.