Archive | Inflation

A Pause in Treasury Yields

Thursday, June 18, 2009

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A Bloomberg item out this morning wonders whether long-term Treasury yields have moved too far, too fast:

The CHART OF THE DAY shows the difference between the yields on 10-year...

Pollyanna Creep

Tuesday, April 15, 2008

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Our April 6 post entitled “Three Reasons to Scrap GDP” considered what’s wrong with drawing too many conclusions about the health of the economy based on this one highly fretted-over number. This week it’s the inflation indexes, PPI and CPI, that will be in the news, along with the tidily trimmed down “core” readings. And what, exactly, does “core” mean? Why, it means we don’t count food or energy prices, of course. So…

Spring Migration

Friday, March 28, 2008

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By the first half of 2006, before the Federal Reserve had even stopped raising interest rates, economists were beginning to recognize where things could very well be headed: monetary policy easing, forced by a slowing economy and tightening credit, would both put downward pressure on the dollar (which already had resumed its decline by the end of 2005) and cause yields on U.S. Treasury bonds to plummet. The inflation risk was obvious to any educated consumer watching the news,…

March Monthly Review

Sunday, March 16, 2008

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You don’t have to be a grizzled value investor to agree with Warren Buffet’s two key rules of investing: “Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.” Since we opened our first trade for March expiration, the S&P 500 index is down almost 100 points – that’s a loss of over 6.6% in a little over one month, and the index is now off 12% from it’s January open. Continued weakness in the U.S. dollar means that…

What Will Happen in 2008

Sunday, January 6, 2008

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Yes, it’s time for our list of predictions for 2008. Economy. GDP growth in the United States will slow to 1.5%, prompting an annoying number of articles on the decline of the US and lots of analogies to the Roman Empire. The Fed will bring discount rates all the way down to a futile 4.25%, in an attempt to put out an economic grease fire with a fiscal bottle of Evian. Which, as everyone knows, spells “naive” backwards. Oil will…

An Irrelevant Fed?

Tuesday, December 4, 2007

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Yes, after awhile John Hussman really starts sounding like a permabear. But when we seem to be teetering on the brink of recession, it’s increasingly tough to paint that as a fault. From his weekly market comment: Pop Quiz How much “liquidity” has the Federal Reserve “pumped” into the $12.7 trillion U.S. banking system since March 2007? a) $1.2 trillion, which banks have used to firm up their balance sheets b) $600 billion, which…

Getting Worse Before It Gets Better

Tuesday, November 6, 2007

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Boring rally this morning, and we’re not buying it (either literally or figuratively). Dow now hovering around 30, not a bad time to grab some negative deltas if you need them, and if you’re into that sort of thing. Also, here’s some good reading from Nouriel Roubini: The bloodbath in credit and financial markets will continue and sharply worsen. The gist is that the major financial institutions are valuing large portions of their assets by the relatively voodoo-tastic mark-to-model…

An Unfunny Fed Joke

Wednesday, October 31, 2007

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The Fed walks into a bar. The bartender doesn’t ask the Fed what it wants, because nobody can afford to go drinking anymore since all their money isn’t worth a damn, even as prices for just about everything are going up, and therefore the bar is closing down. “A glass of Minervois,” the Fed says darkly. The bartender, surprised that it drinks wine, still picks up on the hint. Out of a job anyway, he converts his meager savings to…

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Jared Woodard specializes in trading volatility as an asset class. With over a decade of experience trading options and other volatility products ... Read More

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