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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…

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…

Bottom line for Leon Cooperman is 20 times earnings for the S&P 500 is too high in this environment.  He also thinks 5-5.5% on the 10-year is reasonable.

By Pucklore | October 16, 2023 | Comments Off on Bottom line for Leon Cooperman is 20 times earnings for the S&P 500 is too high in this environment.  He also thinks 5-5.5% on the 10-year is reasonable.

Mr. Cooperman doesn’t think there is any reason for interest rates to go down.  He still thinks many are playing the stock market too aggressively.  He thinks the play is individual stocks instead of the S&P.

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…

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