Month: October 2023

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Leon Cooperman reiterates his conviction that interest rates will go higher, and the S&P 500 (at 19 times earnings) is too high.  He is concerned that the wealthy won’t be able to handle the deficit at 8%.  Even a 6% bond yield isn’t exciting.

By Pucklore | October 30, 2023 | Comments Off on Leon Cooperman reiterates his conviction that interest rates will go higher, and the S&P 500 (at 19 times earnings) is too high.  He is concerned that the wealthy won’t be able to handle the deficit at 8%.  Even a 6% bond yield isn’t exciting.

Mr. Cooperman still thinks the market is going nowhere for a very long time and reiterates the story of the Pharoah’s dream interpreted as having 7 prosperous years followed by 7 lean years.  We’ve pulled forward a lot of fiscal…

Roger Altman of Evercore doesn’t think the current environment is, “conducive to equity investing.”  IRRs will be declining.  He adheres to the opinion that the last 15 years was abnormal for interest rates, and we will be higher for longer.

By Pucklore | October 30, 2023 | Comments Off on Roger Altman of Evercore doesn’t think the current environment is, “conducive to equity investing.”  IRRs will be declining.  He adheres to the opinion that the last 15 years was abnormal for interest rates, and we will be higher for longer.

If you look at medium and long-term rates, the path of Fed policy, fiscal policy and the geopolitical landscape, it’s not a good environment for equities.  We are incentivized right now to invest in fixed income.  Becky Quick adds that…

Jason Mudrick says almost half the levered credit market is levered at more than 7 times EBITDA (excluding generous addbacks).  “That just doesn’t work in a 12, 13, 14 cost of debt market.”

By Pucklore | October 27, 2023 | Comments Off on Jason Mudrick says almost half the levered credit market is levered at more than 7 times EBITDA (excluding generous addbacks).  “That just doesn’t work in a 12, 13, 14 cost of debt market.”

2/3 of non-investment grade credit is floating rate, so they will feel the pinch in real time.  However, Mr. Mudrick generally expects defaults to be “protracted” in nature, and there won’t be a tsunami wall (except for commercial real estate…

Humble victory lap for Jim Bianco – he essentially says stay the course.  “We’ve gone up by 500 bps, but we haven’t tightened by 500 bps….  The first several hundred was just getting back to neutral.”

By Pucklore | October 25, 2023 | Comments Off on Humble victory lap for Jim Bianco – he essentially says stay the course.  “We’ve gone up by 500 bps, but we haven’t tightened by 500 bps….  The first several hundred was just getting back to neutral.”

He reiterates his thesis.  Most people think the economy will turn down with rates to follow.  That hasn’t happened, and hands have been bloodied catching the falling knife.  In fact, we could get a 4% GDP print.  The current yield…

Larry Fink unequivocally reiterates at the FII, “We are going to see higher interest rates, David….  We will not see a hard or soft landing in 2024.”

By Pucklore | October 25, 2023 | Comments Off on Larry Fink unequivocally reiterates at the FII, “We are going to see higher interest rates, David….  We will not see a hard or soft landing in 2024.”

Mr. Fink agrees with Mr. Dimon that the environment right now reminds him of the 1970s.  “The 70s was all about bad policy.  Today it’s about bad policy again.”  Inflation surrounds us everywhere, and it’s going to stay, so, “you…

One of the most accurate higher-for-longer market forecasters, Jim Bianco, says, “Ultimately, I still think we’re going to go higher (on rates) and see a capitulation.”

By Pucklore | October 24, 2023 | Comments Off on One of the most accurate higher-for-longer market forecasters, Jim Bianco, says, “Ultimately, I still think we’re going to go higher (on rates) and see a capitulation.”

Mr. Bianco says that if we are going to un-invert the yield curve, rates need to go higher than the 6 month T-Bill rates of 5.5%.  Again, jobs are strong, we’ll have a 4% GDP print, and the last ten…

Larry Summers thinks the Fed will keep rates unchanged at the November meeting, but the December meeting is uncertain.  He also addresses the magnitude of losses the Fed has on its Treasury purchases.

By Pucklore | October 21, 2023 | Comments Off on Larry Summers thinks the Fed will keep rates unchanged at the November meeting, but the December meeting is uncertain.  He also addresses the magnitude of losses the Fed has on its Treasury purchases.

Dr. Summers agrees with Chairman Powell.  However, the Fed will have to engage with the markets about the enormity of Treasury debt.  The real neutral rate should be in excess of 1.5%.  Also, the term premium rise is putting breaks…

Most important line of Fed Chairman Powell’s speech, “It may be just that rates haven’t been high enough for long enough.”

By Pucklore | October 20, 2023 | Comments Off on Most important line of Fed Chairman Powell’s speech, “It may be just that rates haven’t been high enough for long enough.”

He reiterates the strong resiliency of the economy, especially, from the strong job market, termed out corporate debt and home mortgages.

As time goes on, more Convoys will happen at the margin, says Jim Grant.  It’s from emerging contractionary credit markets.

By Pucklore | October 20, 2023 | Comments Off on As time goes on, more Convoys will happen at the margin, says Jim Grant.  It’s from emerging contractionary credit markets.

Mr. Grant declares that the yield spike on bonds is from the last 10 years of interest rate suppression – the lowest rates in 4000 years – whereby $16T of bonds had a negative yield.  This beachball suppressed under water,…

JPM’s Oksana Aronov says, “The 10-year is still… very much priced for a 2% inflation world.”  Jay Powell wants to “demolish” the unhealthy relationship between asset prices and Fed policy, so don’t wait for the Fed punch bowl to come back.  Also, the default cycle is underway.

By Pucklore | October 18, 2023 | Comments Off on JPM’s Oksana Aronov says, “The 10-year is still… very much priced for a 2% inflation world.”  Jay Powell wants to “demolish” the unhealthy relationship between asset prices and Fed policy, so don’t wait for the Fed punch bowl to come back.  Also, the default cycle is underway.

Unless we see the economy in complete freefall, the Fed will hold.  The Fed has only raised 25 basis points since May, but the long end of the curve has reacted substantially.  30% of outstanding Treasuries are maturing in a…

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