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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…

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…

Larry Fink still thinks bond yields will go above 5% and that inflation will be sticky.  He thinks, eventually, corporate and pension funds will sell equities and buy long bonds to more easily match liabilities.

By Pucklore | October 14, 2023 | Comments Off on Larry Fink still thinks bond yields will go above 5% and that inflation will be sticky.  He thinks, eventually, corporate and pension funds will sell equities and buy long bonds to more easily match liabilities.

Discoveries in AI, robotics and health will be the next opportunities.  This is also allowing us to “recalibrate” away from China.  If people are living longer, locking in 7-9% returns for 10 and 20 years will provide confidence and dignity…

Ken Rogoff – “Oh, I’m definitely in the school that they (real rates) are going to stay high for as far as the eye can see.” 

By Pucklore | October 12, 2023 | Comments Off on Ken Rogoff – “Oh, I’m definitely in the school that they (real rates) are going to stay high for as far as the eye can see.” 

Dr. Rogoff understands that he is in the academic minority with his viewpoint and disagrees with the latest demographic and productivity papers indicating this rates regime is transitory.  He still thinks that the fundamentals point to higher rates over the…

Paul Tudor Jones says , “With 122% of debt to GDP… you get in this vicious circle where higher interest rates cause higher funding costs cause higher debt issuance which cause further bond liquidation which cause higher rates.”

By Pucklore | October 10, 2023 | Comments Off on Paul Tudor Jones says , “With 122% of debt to GDP… you get in this vicious circle where higher interest rates cause higher funding costs cause higher debt issuance which cause further bond liquidation which cause higher rates.”

Interest on the debt will exceed defense spending in two years.  In about 4-5 years, 20% of taxes will pay interest on the debt.  This will soon be a culminating “grinding reality,” and we will have to deal with this.…

“I see more dry tinder for financial flames than I’ve seen in quite a long time,” says Larry Summers to David Westin.  Dr. Summers is concerned with the “gravity” of the fiscal situation and even thinks we need financial crisis contingency planning.

By Pucklore | October 7, 2023 | Comments Off on “I see more dry tinder for financial flames than I’ve seen in quite a long time,” says Larry Summers to David Westin.  Dr. Summers is concerned with the “gravity” of the fiscal situation and even thinks we need financial crisis contingency planning.

“We’ve got something of an energizer bunny economy….  If anything, it looks like job growth is accelerating….  Interest rates may be less restrictive than they used to be.” Back in 2008, he was more concerned about too much austerity, because…

 “That marginal dollar that’s sitting in cash… will just sit there,” says Jim Bianco.  “It will be harder to drag that money out.”  You get 2/3 of the historical stock market return of 9% with almost no risk in money markets.

By Pucklore | October 4, 2023 | Comments Off on  “That marginal dollar that’s sitting in cash… will just sit there,” says Jim Bianco.  “It will be harder to drag that money out.”  You get 2/3 of the historical stock market return of 9% with almost no risk in money markets.

So Mr. Bianco says that this is what the stock market is competing with now.  He agrees that we are generally in a secular bond bear market.  And in the short term, he is looking for an old-fashioned capitulation, as…

Howard Marks thinks that the new sea change will make people want to own more fixed income, because rates will be higher for longer.

By Pucklore | October 4, 2023 | Comments Off on Howard Marks thinks that the new sea change will make people want to own more fixed income, because rates will be higher for longer.

He points out that the S&P 500 has returned about 10% per year for the last 100 years – “That’s a good rate of return.”  Today, you get high single digit returns on publicly traded debt securities or low double…

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