Columnist, Bloomberg @business. Previously 29 yrs @FT Englishman in New York. Mexicanophile. RedSox&Seagulls4ever. Views mine except RTs Please sign up below:
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REMINDER - Points of Return is nominated for a Webby and voting closes Monday. Please vote for us, and many thanks!
Hello everyone! A year on from Liberation Day, this video explaining why "reciprocal" tariffs were nonsense has been nominated for a Webby. Please vote for it!
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The economy is growing in the US, so why are people still so unhappy and angry? This amazing chart might be the answer. (h/t Torsten Slok, @DeutscheBank)
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Dogecoin may be a hustle, but it's the people's hustle, @tculpan says. Reminds me of when Spike Milligan and the Goons found an unexploded mine, and said: "Don't worry, it's one of ours!".... bloomberg.com/opinion/articl… via @bopinion
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Quote for the ages from Argentina's possible next president:
"Central banks are divided in 4 categories: the bad ones, like the Federal Reserve, the very bad ones, like the ones in Latin America, the horribly bad ones, and the Central Bank of Argentina."
bloomberg.com/news/articles/…
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Exclude everything you want to exclude - food, fuel, shelter and used cars & trucks - and this still looks like the worst inflation spike in almost 3 decades. Now on MLIV on @TheTerminal. #inflation
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So. Bitcoin fell 53% in five weeks, and then it rallied 35% in four hours. Two observations for now:
1) Nobody in their rate mind would enter into a transaction denominated in bitcoin
2) It's too early to say the bubble's burst (or to say this is a new bull market).
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As we await the start of another week's trading, it's worth noting that the drone attack constitutes the biggest sudden disruption of global oil supply ever, topping Saddam's 1990 invasion of Kuwait. bloomberg.com/news/articles/…
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This chart from @TheTerminal shows why this #CPI number is so disappointing. The contribution of energy has declined, as expected; but services inflation is now rising sharply. Not what the #FOMC will have wanted to see.
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Now Elon Musk is worth 3 times as much as Warren Buffett, some fun with valuations. Berkshire produces the highest EBITDA of any US company, 20 times that of Tesla. But Tesla is worth 2 Berkshires. Make sense? bloomberg.com/opinion/articl… via @bopinion
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I have a personal announcement to make. This will be my last week at @financialtimes, after 29 great years. Next month, I start as Senior Editor at @business. Thank you, FT, for a wonderful career. Now for the next challenge. talkingbiznews.com/1/bloombe…
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Opinion | I believe in the president, now more than ever - in which George Conway seems to be making a bid to become a late-night comedy writer. This is very funny. washingtonpost.com/opinions/…
Opinion | I believe in the president, now more than ever
Still keeping the faith.
washingtonpost.com 36
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As former President Trump no longer has access to this platform, let me point out that the US stock market is at an ALL-TIME HIGH already after only one day of President Biden, higher than it EVER was under failing Trump administration. (And just to be clear, this means nothing).
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God what a boring year on the markets this has been so far. S&P 500 down 1.7% YTD, dollar index up 0.6%. Yawn.
Maybe if we're lucky something interesting will happen soon.
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This inflation rise may indeed be transitory; but it remains hard to ignore the fact that core CPI is the highest in almost 30 years.
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For those asking if 3month-10year inversion is a good recession indicator - yes it is. In the post-Bretton Woods era, no false negatives, and the only possible false positive came briefly in the extreme conditions of the 1998 LTCM crisis:
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Worth Reading. Paul Krugman is completely right about this, sad to say: Vaccines: A Very European Disaster nytimes.com/2021/03/18/opini…
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Oil's thunderous price drop in historical perspective; this is the biggest % fall for Brent, and first fall of 20% or more, since January 1991, when a coalition of the willing was fighting Iraq over Kuwait. This is a very, very big deal.
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This is a remarkable column. After 4 years of Trump, Americans are more pro-immigrant and more pro-trade than ever before.
Opinion | Trump has shifted the country to the left — or at least away from his own views washingtonpost.com/opinions/…
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Yikes. Exclude the big 5 (Microsoft, Apple, Alphabet, Amazon and Google) and U.S. earnings were down 7.5% in the 4th quarter. H/t @AndrewLapthorne of SocGen
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This is the most depressing chart I've seen in a while. Low US labour force participation rate is heavily correlated with opioid use. H/t Torsten Slok of @DeutscheBank
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Good grief. The T-bill that comes due on June 6 is now yielding more than 7%. At the start of this month the yield was at 4.62%. Investors are taking the #DebtCeiling imbroglio seriously:
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For context, this was the S&P 500's best day since Oct. 28, 2008. At the end of that day, the bottom was more than 4 months away, and there was a 29% fall before hitting the intraday low.
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Producer Price Inflation is above 10% for the first time since 1981 on a finished goods basis (the main measure used until 2011). On a final demand basis, it's 8.3%, highest since inception in 2011. Either way, it's worryingly high.
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The CAPE - the cyclically adjusted price/earnings multiple - of the S&P 500 is higher than it was on the eve of the 1929 Great Crash. It's only once been higher since the Dot Com bubble burst. bloomberg.com/opinion/articl… via @bopinion
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“If you look at any model” Scott Bessent tells @bsurveillance, “we should probably be 150, 175 basis points lower.” Here are some models I looked at on @theterminal:
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This is what has just happened to sterling in historical perspective. Literally off the charts. Black Friday awaits.
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Today's rise in the 10-year Treasury yield is the biggest in 5 years, save only two days at the height of the Covid lockdown, and the Monday in June when the Fed leaked its intention to hike by 75bps to the WSJ.
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There are times when I really wish I was a Sun headline writer, and this is one of them. Great headline!
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Bill Dudley, former head of the New York Fed, says the Fed has made a recession "inevitable". bloomberg.com/opinion/articl… via @bopinion
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This is now turning into a significant breakout - the 10-year US real yield is the highest since the GFC:
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Jim Chanos: ‘We are in the golden age of fraud’ ft.com/content/ccb46309-bba4… via @financialtimes
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So. The 10-year Treasury yield fell below 0.5% at the Asian opening. For the first time ever. The 5 trading days since the Fed emergency cut have really been something.
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An imbalance in the gold futures market could trigger a parabolic rise and ramifications for other markets, @johnauthers writes bloomberg.com/opinion/articl… via @bopinion
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The Urzua resignation plays into all the greayest fears about AMLO. My latest column: A Blow Against AMLO Bodes Ill for Mexico bloomberg.com/view/articles/…
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We're entering uncharted territory, where central bankers seem more scared of runaway inflation than a market downturn, writes @lisaabramowicz1. The real yield tantrum is here at last bloomberg.com/opinion/articl… via @bopinion
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Well there you go. The S&P 500 has completed its trip and is back where it started the year. Who'd have thunk?
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Good grief. U.S. Treasury 10-year yields dropped to 1.04% in early Asian trading. No reversal as yet. I suppose the next question is whether people have the appetite to take the 10-year yield below 1%.
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The Fed is lending to Apple.
NEW: The Fed has posted the 794 companies whose bonds it began purchasing earlier this month as part of its "broad market index"
Six companies were 10% of the index: Toyota, Volkswagen, Daimler, AT&T, Apple and Verizon newyorkfed.org/markets/secon…
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Dear Mr President, Here is how your stock market numbers compare with your predecessors. At this point, stocks had risen much faster under Obama. (both his terms). Other presidents also ahead. We should have made more of it. Sorry.
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This is getting surreal. As of now, the dividend yield on the S&P 500 exceeds the 30-year Treasury yield. Last and only time that happened in the last 40 years was during the crisis. So, buy stocks for the dividends??? h/t @bespokeinvest
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Farewell @FT. I've just given my farewell speech in the FT newsroom. I still haven't finished my last story, unfortunately....
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Wow. BlackRock doesn't think valuation matters - and that's someone on the active management side of the business talking, not the indexing side. bloomberg.com/news/articles/… via @markets
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Dow is back at 20k. Biggest post-election winner among Dow constituents = Goldman. Biggest loser = Walmart. Joe Sixpack must be delighted.
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Not often BBC coverage of parliament makes me laugh out loud. BUT latest question, asked seriously by the anchorwoman: "Can Boris bring a vote of no confidence in himself?" Answer from Professor John Curtice: "He'd probably lose."
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Seriously bad news for people who held crypto with Celsius (and presumably FTX): Deposits at bankrupt crypto platform don’t belong to customers, judge rules crainsnewyork.com/markets/ce… via @CrainsNewYork
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If we have a bubble, it's fueled by anger, not greed.
bloomberg.com/opinion/articl…
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How big a deal was Nixon's departure from the dollar-gold peg, which happened 50 years ago this weekend? This website argues it mattered rather a lot. Worth having a look: wtfhappenedin1971.com/
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Sell-offs need a catalyst. S&P 500 down almost 13%, rest of the world down more than 10%, since I left @financialtimes and joined @business. Sorry everyone.
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The 10-year yield's reaction to the September #CPI is exactly like the reaction to the August CPI, only even more extreme:
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Paul Krugman has some pointed things to say about bitcoin that should generate some interesting responses from the faithful:
Technobabble, Libertarian Derp and Bitcoin nytimes.com/2021/05/20/opini…
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So, I just had my 2nd Covid shot (Pfizer). I don't feel like dancing on an ice floe, but it is a big relief and I do feel very lucky. It's now turning into a very smooth process, in NYC, so let's all hope the job is finished quickly. Thanks to all who made it possible.
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Another transitory blast from the past: Last year the BLS started publishing CPI excluding Food, Shelter, Fuel & Used Cars. The idea was to exclude the main transitory effects. Unfortunately #CPI Excluding Everything You Want To Exclude, is still rising, to 4.5%:
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The investment case for #dogecoin, as fairly summarized by @matt_levine.
bloomberg.com/opinion/articl…
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If you'd bought lumber futures on April Fools' Day, you would now be sitting on a gain of 230%; if you'd suggested this at the time, everyone would have thought it was a joke.
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My 11-year-old son on the president: "Why's he being so childish?"
The SNL skit of this debate is going to be great.
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Does Chris Wallace have the power to turn off a candidate's microphone? The debate would be better if he did.
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If you're looking for someone to blame for the sell-off, George Saravelos of @DeutscheBank just sent this chart under the heading "Blame the Fed". Seems fair.
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The Coinbase IPO should have told us Bitcoin's flash crash was coming. Big IPOs tend to happen at market tops. See also Glencore and Blackstone: bloomberg.com/opinion/articl… via @bopinion
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This is the single most miserable number in the #CPI report. Services inflation has jumped to a 40-year high. A year ago, this was about the switch of expenditures from services to goods; not so any more.
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But then Buffett doesn't also own a rocket company. And there's something rocket-like about Tesla's performance this year. (Why does a pandemic increased demand for electric vehicles exactly?) h/t @charliebilello @Peter_Atwater
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It turns out, one of Paul Krugman's most-infamous predictions wasn't half bad, says @TheStalwart. The internet had no more economic impact than the fax machine: bloomberg.com/news/articles/… via @markets
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Has the S&P500 come too far too fast? Compared to previous times it hit 2800, credit spreads are wider, forward p/es are higher, earnings forecasts are falling, and volatility is higher. So, yes, it's come too far too fast. Beautiful summation by Jonathan Golub, @CreditSuisse
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Possible sell signal: the latest surge in Tesla stock has left Elon Musk above Warren Buffett in the Bloomberg Billionaires index.
bloomberg.com/billionaires/?…
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And so it ends. Obama narrowly failed to catch Clinton for title of "most market-friendly president ever". But it was close:
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Still nothing stops the FAANGs. The NYSE Fang+ index is now at a new record high relative to the S&P 500 since its inception in 2014. This must reverse some time - but when?
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You don't need a sophisticated model to show that U.S. stocks are untenably expensive, and that behavior is getting crazy. All too much hangs on the bond market - and the curve is the steepest in almost 4 years... bloomberg.com/opinion/articl… via @bopinion
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Stock markets are supposed to fall sometimes. @Noahpinion worries [CORRECTLY] that the U.S. government has propped them up too much bloomberg.com/opinion/articl… via @bopinion
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If inflation is to prove more than transitory, shelter (roughly a third of the CPI), will have much to do with it:
Rent has increased a staggering 11.4% so far in 2021 (vs. ~3% pre-pandemic).
"July's spike continues to push rents well above where they would be if growth had remained on its pre-pandemic trend." --@ApartmentList
Even big cities r coming back fast
apartmentlist.com/research/n…
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I meant right mind, not rate mind. Freudian slip. Looking forward to Twitter's editing function.
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When Nixon closed the “gold window,” 50 years ago today, he inadvertently ushered in a half-century of fiat currencies, backed only by confidence in the issuing governments and central banks. Here's my attempt to summarize what followed: bloomberg.com/opinion/articl… via @bopinion
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The consensus that 2021 will be the year of reflation and recovery is overwhelming. It's a lonely place for contrarians. We've got to think for ourselves... bloomberg.com/opinion/articl… via @bopinion
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The optics of this could scarcely be any worse: The U.S. plans to give $500 billion to large companies. It won’t require them to preserve jobs or limit executive pay. washingtonpost.com/business/…
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Bill Gates laughs again. For the first time since 2010, Microsoft is bigger than Apple by market cap, and it's back as the world's biggest company.
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Oh boy. The 2s/10s yield curve is within 1 basis point of inverting in Asian trading. It’s going to be a fun week; good luck everyone….
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This is the beautiful breakdown of the inflation numbers from @theterminal. Big fly in the ointment is services inflation, which is still rising:
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Britain is run by a very small club.
Boris Johnson, PM, (Oxford Union president 1986) has coronavirus. So
Michael Gove, his effective deputy (Oxford Union president 1988) takes press conference with
Simon Stevens, NHS head (Oxford Union president 1987).
& they're all white men.
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Sweden’s Covid-19 experiment holds a worldwide warning -to be careful with statistics. Good column from @EuroBriefing ft.com/content/9a1e118f-a4ef… via @financialtimes
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Brutal selling into the close makes this the worst single day for the S&P 500 (or the Dow, for those who care about that) since the Black Monday crash of October 1987.
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Investment lessons from 12 years of writing the Long View via @FT
Here it is, my last Long View. ft.com/content/3c740106-c273…
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I think this might be a sell signal:
My son just told me that he can only play @FortniteGame in the evening... because half of his squad started trading. He is 10. @RobinhoodApp #TrueStory
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Ummm. Core PCE (the Fed's favored inflation measure) has set a new 30-year high, and base effects have now dropped out of the equation. Not encouraging.
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A quote to remember, from Deep Throat, who we now know was number 2 at the FBI: nitter.app/kevinmkruse/status/837…
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One of the greatest news conference questions ever. A six-year-old would be hard put to come up with a better one:
US reporters shocked when this German reporter asked #Trump: "Why do keep saying things you know are not true?"
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Labour takes Canterbury. Rough equivalent, in US terms, of Democrats taking Texas. Extraordinary.
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ICYMI: @elerianm continues to up his criticism of the Fed.
This will go down in history as one of the "worst inflation calls in decades" by the Federal Reserve, says @bopinion's Mohamed El-Erian trib.al/KNGfGuM
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To buy U.S. stocks at their current prices requires a denial of the realities that confront us, even if a rally has been justified. Prospective p/es are their highest in 18 years for crying out loud... bloomberg.com/opinion/articl… via @bopinion
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MUST READ Martin Wolf on China. This paragraph is painful but accurate. It's worthy of some thought:
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Hmmm. Insiders sold $7.8bn of US stock in February (most in 6 yrs) while buying only $380m. Not positive. h/t @TrimTabsIR
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Is bitcoin a bubble? If so, it's a macho one. 97% of bitcoin holders are male. Great research from Deloitte Canada. linkedin.com/pulse/bitcoin-b…
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RIP David Swensen. By far the most influential asset allocator of the last several decades. This is the first feature I wrote about him, from the FT in 2007.
A great investor with a centuries-long horizon ft.com/content/9f954e90-15cb… via @financialtimes
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Tesla's leap in market value exceeds anything seen during the internet frenzy in 1999 and 2000. Lesson from history is that buying at the top now could mean you wait a decade to break even - even if Tesla's business goes well. bloomberg.com/opinion/articl… via @bopinion
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