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Part of the reason is improving liquidity, a surprise trend, despite the Fed’s ongoing Quantitative Tightening (See chart titled “Overall Liquidity.”). However, the biggest reason is this: The stock market is having itself a Pivot Party. After a long hawkish campaign, the Fed pulled an about-face last week and hinted that rate cuts are next, starting …

How hot has the stock market been recently? Even the lowly Russell 2000 index has traversed back to its range highs, although it remains some distance from its all-time highs. The “Everything Rally” has brought even the small caps to the party. Read More »

For thousands of years humans have tried to predict, manage, and control the future. Our ancestors looked for advice from oracles and read the stars. In more recent history, we have turned to science to determine future trends. But a fixed and knowable future doesn’t exist. As I look back on 2023, I recognize – …

Being Human in the Age of AI Read More »

Although China is moving to change that calculus, it will take a lot of effort, changes in their foreign currency policy, changes to how imports and exports are handled, changes in banking requirements, increased transparency to attract more FDI, and a determined effort to lighten up on U.S. Treasuries. Perhaps we will see significant progress …

While the US$ represents 59% of world reserve currencies, the Yuan is a paltry 2-3%. Read More »

It’s a stunning reversal, from the top end of my bond model at 5% right through the middle at 4%, which my model calculates as fair value, based on potential GDP growth and the forward curve. The model shows 3.5% is the bottom of the range. (See chart titled “US Bond Valuation.”) What’s next? My guess is …

Let’s talk about bonds: The “Everything Rally” has taken the 10-year bond yield from 5.02% in late October to below 4% last week, taking the term premium back below zero. Read More »

The growing debt is not new. Things started to get out of control after the banking crisis of 2008. Interest rates were pushed to zero. Taking on new debt to stimulate the economy was almost free money. We’d found the philosopher’s stone of finance: MMT. We could print as much money as we wanted. We …

The towering monolith of government debt is scraping the heavens. The endgame is looming. Read More »

“Michael Saunders, who was on the Monetary Policy Committee between 2016 and 2022, said the £126 billion ($161 billion) “lifetime cost” to the taxpayer of central bank money printing…”