Once through with feeling

Some readers may be interested in putting a voice – and even a face – to the author. Below are links to three recent audio-visual publications in which I discuss US & Chinese macro as well as the interrelations between the three great asset classes of stocks, bonds, an commodities. Following on is a wider sampling of my views. Continue reading

Gibson’s Non-Paradox

Birmingham statistician and financial forecaster Arthur H. Gibson’s so-called ‘paradox’ came about from his detailed empirical findings that the level of bond yields (as measured by the price of British Consols) tended to follow – with a lag of around a year – the price of wholesale commodities (a measure he adopted, as he himself explained, as a proxy for what he thought was the real crux of the issue, the cost of consumable necessities for which no comparable data existed). Argument has abounded as to the phenomenon’s true explanation, ever since.

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Dreams of Gerontius

At the end of last month, the Mighty Oz’s and Grand Panjandrums of central banking descended upon the rural splendours of Wyoming in order to engage in a very public display of navel gazing and to enact a ritual, group reinforcement of confirmation bias.
There, we heard much nonsense talked about low – even negative -‘natural interest rates’ and of the seeming impossibility of triggering an alchemically meaningful dose of price inflation with which to restore the balance of the humours in the global economy.

It was most timely, then, for the ever-mischievous BIS to publish a paper first presented last year by Charles Goodhart & Manoj Pradhan which challenged much of the received wisdom of our monetary overlords and which broadly affirmed arguments I, too, have long been offering against their approach.

Please click the link to read more:-

17-08-24 Gerontius

China: Turn of the Tide?

In an earlier Monitor, we alluded to a possible monetary reason for suspecting that the past year’s spectacular (and inflationary) bounce in Chinese revenues and earnings might have reached its high-water mark.

Here we take a more detailed look at the situation in the Middle Kingdom:-

17-08-21 China

The Mephisto Polka

[This article appeared in edited form in the Epoch Times and also in the Daily Telegraph]

In her recent set-piece testimony before Congress, Janet Yellen made clear that she is determined to repeat the sort of ‘gradualism’ in raising rates that proved so disastrous after the Tech bust. In other words, that she will not so much boil the frog slowly as encourage him to go out and make a further raft of foredoomed, highly-leveraged investment decisions before he realises he’s been cooked.

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Pluto’s Republic

The more our would-be Philosopher Kings attempt to display the awesome panoply of their intellectual armour, the more we think, not of the Greek sage from whom they seem to draw inspiration, but of Mickey Mouse’s dopey canine friend.

In bonds, the Bears are mounting another one of their forlorn hope charges against the central bank ramparts which is, in turn, rendering equities a little more expensive in relative, as well as absolute, terms. Commodities, meanwhile, are firmly rooted in mean reversion mode.

Please click the link for the latest comments:-

17-07-06 M4 No 7

 

Fretting on the Fed: Monitor No.5

Falling returns in the US. Tight money in China. An upswing in Japan. Deflation in India. Gold goes cold. Fretting the Fed on falling CPI and a flattening curve? No need to panic, just yet.

Please click for the latest Monitor.

17-06-20 M4 No5

Cracks in the Facade: Monitor update

The new M4 is here.

Tech tremors, Musk magic and a rich US equity market. Ex-energy to give it some gas? The pounded sterling and taking aim at the TARGET. Latest thoughts to be had by clicking on the link.

17-06-13 M4 No 4

Japan, sterling & more: Monitor Update

The latest edition can be had here:-

17-06-05 M4 No 3

Including a look at Japanese equities, the US dollar & sterling, the latest US data round, the significance of yield curves, and misconceptions about monetary ‘velocity’.

Courtesy of Cantillon Consulting