04 March 2025 Differences of opinion between market participants are often (not always) a matter of time horizon. From our perch,...

The way price responded to China’s NDRC Press Conference today raised two key observations about recent developments. First, the rally...

As we warned earlier this week,  never underestimate the Fed’s ability to out-dove the market. The FOMC delivered a 50-basis point cut to...

Last week we suggested that US markets were priced for the optimal combination of disinflation, aggressive Fed easing, growth near trend,...

The past two months over the northern hemisphere summer have been extraordinary for markets. The euphoria of the AI boom contributed to...

It is an understatement to say that the price action over the past week has been impulsive, rapid, and emotional (chart 1). There is an...

To outperform the crowd, you must dare to be different. Put another way, the best investments are typically made from a position of deep...

It is important to remember that currencies are always a relative price. Interest rates, growth, inflation, and external positions are...

Human beings are not particularly good at non-linear thinking - an observation we have made in the past. From our perch, a key reason why...

Enter the Dragon & the Third Element This year we enter the Zodiac year of the Dragon. Let’s hope it is a lot more auspicious than the...

The decline in Treasury yields (rise in bond prices) since late October has been impulsive, rapid, and emotional. Suddenly all the slack...

The barbarous relic (gold) made a new all time high this morning in Asian trade on Monday. From our perch, the shift in consensus beliefs...

“Three things ruin people: drugs, liquor and leverage”. Charlie Munger R.I.P There are so many excellent quotes and so much wisdom from...

The non-predictions for 2024. The US equity risk premium will not end 2024 narrower compared to end 2023. The US high yield bond index...

The price action over the past two weeks while we have been out meeting investors has been fascinating. We are not surprised that there...

From our perch, the price action last week was pivotal. It was almost as though the Federal Reserve had announced a rate cut last...

An astute English friend noted overnight that so much IQ is focused on linguistic and microanalysis of what the Federal Reserve may do,...

The way price responds to news is often more important than the information itself. Price can also influence fundamentals by affecting...

A Texas hedge is a financial hedge that increases exposure to risk. An excellent example in the current episode has been long duration...

The rapid and emotional or non-linear rise in fixed income yields since 2022 has been catastrophic for investors in long duration fixed...

As we often note, there is an intimate link between liquidity, volatility, and leverage. Put differently, long phases of low volatility...

As we noted recently, human beings are not particularly good at non-linear thinking. From our perch, a key reason why there is resistance...

Despite having a background in Political-Economy we are careful not to speculate on topics where we have limited or insufficient...

From our perch, the hyper-bullish conditions for gold occur when the US Federal Reserve is “inflationary” not when there is actual...

Dr Copper, the industrial metal with an honorary PhD in Economics is down 18% from the January 2023 high and 29% from peak. For the macro...

Hugh Hendry once quipped “we recommend you panic.” From our perch, investors ought to be deeply uncomfortable again today. Markets are in...

Never let the truth get in the way of a good story. Small companies, as measured by the Russell 2000 index are trading below 2020 trough...

Human beings are not particularly good at non-linear thinking. While many participants would like to believe that economics and markets...

A common phrase often expressed by the financial media is that “markets hate uncertainty.” Of course, markets are always uncertain...

This year has been particularly challenging for consensus positioning and beliefs – “it’s transitory to soft landing” now being hit by...

As widely anticipated, the US FOMC left policy unchanged at 5.5% at the September meeting. However, the dot plot was marked up again by...

A key question our friend Dave Dredge at Convex Strategies often asks policy officials in Japan about extreme measures (ZIRP, QE, YCC...

I Just can’t get enough I Just can’t get enough The markets slip and slide when we end the dove And I just can’t seem to get enough...

As we have noted recently 2023 has been the year of the contras where swings in major macro trends have caught consensus positioning and...

In August we noted that a key characteristic of 2023 has been swings in the prevailing bias on major macro trends that have caught...

One of the key characteristics of 2023 has been swings in the prevailing bias on major macro trends that have caught consensus...

Long end yields have recently broken to new cycle highs. From our perch, as we noted earlier this month, this likely reflects a few key...

The Economist Cover on August 29th, 2015, was titled the “Great Fall of China.” While that was not quite the trough in that episode or...

Earlier this week we suggested that the odds of a soft landing remain low. There have been only 2 out of 12 episodes since 1957. The most...

From our perch, a behavioural error analysts and investors often make is to extrapolate cyclical dynamics as structural. The macro cycle...

“No Mr Bond… I expect you to die.” As an astute investor noted today, yield curves re-steepen (un-invert) as long bonds worry about...

A couple of weeks away from the screens is often a good time for perspective and reflection. Earlier this year the prevailing bias among...

We once described Japan as the Buzz Lightyear market “to infinity and beyond”. Clearly that was an exaggeration to emphasize the impact...

As widely expected, the FOMC left the funds rate unchanged at 5.25% at the June meeting. However, consensus beliefs on the terminal rate...

The divergence in consensus beliefs between the current leaders and laggards in the stock market is extraordinarily large. As several...

"Yield curves have never been this inverted and not signalled a recession. Bank lending standards have never been this tight without...

As we noted last week (see “how much can a panda bear”), the unwind of enthusiasm for China’s re-opening has been warranted. China’s hard...

Not surprisingly, an agreement appears to have been reached to raise the debt ceiling. While negotiations were fraught, the debt ceiling...

As a behavioural investor, the current episode has been fascinating and clearly challenging at the same time. The “everything bubble” as...