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Financial historian Jim Grant reiterates that we are in a long-term bear trend for bonds after 40 years.  “Interest rates are unusual if not unique in financial menagerie, because they tend to trend in generational length phases….  It’s been true in this country since the Civil War.”

By Pucklore | September 27, 2023 | Comments Off on Financial historian Jim Grant reiterates that we are in a long-term bear trend for bonds after 40 years.  “Interest rates are unusual if not unique in financial menagerie, because they tend to trend in generational length phases….  It’s been true in this country since the Civil War.”

“Every big move in financial markets… tends to climax in some absurdity, some valuation excess.”  This one ended with negative interest rates to the tune of $15T of bonds.  “So we had 40 years down.  Before that, we had 35…

Jamie Dimon expounds on his earlier potential call of the decade of a 7% 10-year rate.  He is also urging at the front end for, “clients to be prepared for that kind of stress.”  We also need to stop thinking of China as a 10 foot giant.

By Pucklore | September 26, 2023 | Comments Off on Jamie Dimon expounds on his earlier potential call of the decade of a 7% 10-year rate.  He is also urging at the front end for, “clients to be prepared for that kind of stress.”  We also need to stop thinking of China as a 10 foot giant.

Mr. Dimon also thinks the main question with China isn’t the real estate sector but the seriousness of having, “a European democratic nation invaded under the threat of nuclear blackmail….  It’s gonna affect all of our relationships….  And India is…

Will higher rates weed our economic garden? 

By Pucklore | September 25, 2023 | Comments Off on Will higher rates weed our economic garden? 

Fair growth policies encourage responsible financial practices and the proper balance of savings and investment. But beginning in 2015-2016 the real estate market was flooded with easy money, especially, through smaller banks.  This also transferred to the venture capital world…

“We’re still playing catchup, Joe, to the fact that people are earning less than the inflation rate, and now they’re making up for that in spades,” says former Dallas Fed President Fisher.  “You have to look at the employment data.”

By Pucklore | September 20, 2023 | Comments Off on “We’re still playing catchup, Joe, to the fact that people are earning less than the inflation rate, and now they’re making up for that in spades,” says former Dallas Fed President Fisher.  “You have to look at the employment data.”

Only 10% of labor is unionized in the U.S. (7% of it is private sector.)  But small and medium sized businesses are being pressured to raise wages as well, as they are having trouble finding skilled workers.  Consumption demand is…

“What we’re seeing unfolding in real time is nothing short of a tech war between the U.S. and China….  We are going to see a bifurcation of a Chinese led technology world and an American led technology world,” says Palantir advisor Jacob Helberg.

By Pucklore | September 20, 2023 | Comments Off on “What we’re seeing unfolding in real time is nothing short of a tech war between the U.S. and China….  We are going to see a bifurcation of a Chinese led technology world and an American led technology world,” says Palantir advisor Jacob Helberg.

The new 7 nanometer SMIC chip to Huawei may be violating U.S. sanctions.  The Biden Admin. sanctions show the export controls on advanced computing will slow China’s advance but not stop it.  But this is what the sanctions are designed…

Former PIMCO economist Paul McCulley doesn’t see a reason for a recession.  Nor is there a compelling reason to forecast one.

By Pucklore | September 20, 2023 | Comments Off on Former PIMCO economist Paul McCulley doesn’t see a reason for a recession.  Nor is there a compelling reason to forecast one.

Mr. McCulley thinks that a recession is just a tail risk, “and not the base case.” Additionally, the Fed will still keep a potential rate hike on the table to prevent an unwelcome easing of financial conditions.

“I think this is more normal than zero interest for 10, 12, 14 years,” says former Barclays CEO Bob Diamond to Andrew Ross Sorkin.

By Pucklore | September 17, 2023 | Comments Off on “I think this is more normal than zero interest for 10, 12, 14 years,” says former Barclays CEO Bob Diamond to Andrew Ross Sorkin.

Mr. Diamond seems to be in the higher-for-longer camp.  He thinks we have adjusted to higher rates.  People are relaxed, so no interest rate decreases next year.  He notes that during 2008-2019 the Fed Funds averaged less than 1% –…

Michael Shumacher of Wells Fargo thinks 10-year bond yields go down from here.  He doesn’t think the U.S. Government can “tolerate” 6-7% on the 10-year.

By Pucklore | September 17, 2023 | Comments Off on Michael Shumacher of Wells Fargo thinks 10-year bond yields go down from here.  He doesn’t think the U.S. Government can “tolerate” 6-7% on the 10-year.

Mr. Shumacher thinks that foreign and domestic bond buyers would put a stop to any rise in long-term interest rates, and the 10-year will actually be around 3.50% by year end. He does not ascribe to the higher-for-longer view. But…

“Today, we just raise prices,” says Jim Bianco.  “The economy has fundamentally changed since 2020.”

By Pucklore | September 16, 2023 | Comments Off on “Today, we just raise prices,” says Jim Bianco.  “The economy has fundamentally changed since 2020.”

All of these labor battles are indicative of the new “mosaic,” whereby companies have no problems raising prices, and oil climbs higher, but there is no demand destruction.  This is a no landing scenario.  Dr. El-Erian asks Mr. Bianco if…

Zhiwei Ren of Penn Mutual questions the ability of asset managers to purchase duration.  He believes there is a risk that demand fails to meet the Treasury supply.

By Pucklore | September 15, 2023 | Comments Off on Zhiwei Ren of Penn Mutual questions the ability of asset managers to purchase duration.  He believes there is a risk that demand fails to meet the Treasury supply.

“But asset managers’ positions are very long on Treasuries already; they don’t have room to buy more duration. If no one steps in to purchase the tremendous supply of Treasuries coming to the market soon, we will have a supply-demand…

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