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Media Centre


The Reverse Feedback Loop
04 March 2025 Differences of opinion between market participants are often (not always) a matter of time horizon. From our perch,...
Mar 3


Too Fast, Too Furious
The way price responded to China’s NDRC Press Conference today raised two key observations about recent developments. First, the rally...
Oct 8, 2024


No Bull
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...
Sep 19, 2024


The Growth Scare
Last week we suggested that US markets were priced for the optimal combination of disinflation, aggressive Fed easing, growth near trend,...
Sep 4, 2024


Don't Believe in Fairytales
The past two months over the northern hemisphere summer have been extraordinary for markets. The euphoria of the AI boom contributed to...
Aug 27, 2024


Japan & the Gamma Hammer
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...
Aug 6, 2024


The Great China Constraint
To outperform the crowd, you must dare to be different. Put another way, the best investments are typically made from a position of deep...
Jul 31, 2024


The Mighty Dollar
It is important to remember that currencies are always a relative price. Interest rates, growth, inflation, and external positions are...
Jun 27, 2024


When Thunder & Lightning Strike: The Gamma Hammer
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...
May 7, 2024


Enter the Dragon & the Third Element
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...
Feb 7, 2024


Equities Say Yes, Bonds are Screaming No!
The decline in Treasury yields (rise in bond prices) since late October has been impulsive, rapid, and emotional. Suddenly all the slack...
Dec 6, 2023


Pet Rock & the All-Time-High
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...
Dec 4, 2023


Three Things Ruin People....
“Three things ruin people: drugs, liquor and leverage”. Charlie Munger R.I.P There are so many excellent quotes and so much wisdom from...
Nov 29, 2023


The Non-Predictions for 2024
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...
Nov 27, 2023


That's not a Knife
The price action over the past two weeks while we have been out meeting investors has been fascinating. We are not surprised that there...
Nov 23, 2023


A Pivotal Week
From our perch, the price action last week was pivotal. It was almost as though the Federal Reserve had announced a rate cut last...
Nov 6, 2023


Even the Good Outcome is Bad
An astute English friend noted overnight that so much IQ is focused on linguistic and microanalysis of what the Federal Reserve may do,...
Nov 2, 2023


Stability is Destabilising Part II
The way price responds to news is often more important than the information itself. Price can also influence fundamentals by affecting...
Nov 1, 2023


The Texas Hedge
A Texas hedge is a financial hedge that increases exposure to risk. An excellent example in the current episode has been long duration...
Oct 26, 2023


Despair and the Bond Bear
The rapid and emotional or non-linear rise in fixed income yields since 2022 has been catastrophic for investors in long duration fixed...
Oct 23, 2023


Stability is Destabilising
As we often note, there is an intimate link between liquidity, volatility, and leverage. Put differently, long phases of low volatility...
Oct 13, 2023


The Gamma Hammer in a Short Convex World
As we noted recently, human beings are not particularly good at non-linear thinking. From our perch, a key reason why there is resistance...
Oct 11, 2023


Armchair Generals
Despite having a background in Political-Economy we are careful not to speculate on topics where we have limited or insufficient...
Oct 9, 2023


The Bullish Case for Pet Rock (Gold)
From our perch, the hyper-bullish conditions for gold occur when the US Federal Reserve is “inflationary” not when there is actual...
Oct 9, 2023


Doctor, Doctor sell me the Spooz
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...
Oct 5, 2023


We Recommend You Panic
Hugh Hendry once quipped “we recommend you panic.” From our perch, investors ought to be deeply uncomfortable again today. Markets are in...
Oct 4, 2023


Truth versus a Good Story
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...
Oct 3, 2023


Gradually, then suddenly
Human beings are not particularly good at non-linear thinking. While many participants would like to believe that economics and markets...
Oct 2, 2023


Weak When Narrow
A common phrase often expressed by the financial media is that “markets hate uncertainty.” Of course, markets are always uncertain...
Sep 26, 2023


Going Straight to Sell
This year has been particularly challenging for consensus positioning and beliefs – “it’s transitory to soft landing” now being hit by...
Sep 22, 2023


Addicted to Dove
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...
Sep 21, 2023


What if it works?
A key question our friend Dave Dredge at Convex Strategies often asks policy officials in Japan about extreme measures (ZIRP, QE, YCC...
Sep 20, 2023


Just Can't Get Enough
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...
Sep 18, 2023


A Year of Contras
As we have noted recently 2023 has been the year of the contras where swings in major macro trends have caught consensus positioning and...
Sep 14, 2023


Blind Leading the Blind
In August we noted that a key characteristic of 2023 has been swings in the prevailing bias on major macro trends that have caught...
Sep 13, 2023


The Twisted Logic of Bad Equals Good
One of the key characteristics of 2023 has been swings in the prevailing bias on major macro trends that have caught consensus...
Aug 31, 2023


A Rolling Loan Gathers No Loss
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...
Aug 23, 2023


The Great Fall of China
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...
Aug 18, 2023


If the First Wave Doesn't Get You the Second Wave Will
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...
Aug 11, 2023


Eternal Hope or Revulsion?
From our perch, a behavioural error analysts and investors often make is to extrapolate cyclical dynamics as structural. The macro cycle...
Aug 7, 2023


The Bond Market Woke up and Chose Violence
“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...
Aug 4, 2023


Downfall Rising
A couple of weeks away from the screens is often a good time for perspective and reflection. Earlier this year the prevailing bias among...
Aug 3, 2023


Buzz Lightyear is Back
We once described Japan as the Buzz Lightyear market “to infinity and beyond”. Clearly that was an exaggeration to emphasize the impact...
Jun 21, 2023


The Hawk Baulk & Asia
As widely expected, the FOMC left the funds rate unchanged at 5.25% at the June meeting. However, consensus beliefs on the terminal rate...
Jun 15, 2023


A.I... All In like it's 1999
The divergence in consensus beliefs between the current leaders and laggards in the stock market is extraordinarily large. As several...
May 31, 2023


Nick Ferres on Bloomberg's "IC Your Trade 3"
"Yield curves have never been this inverted and not signalled a recession. Bank lending standards have never been this tight without...
May 30, 2023


The Antithesis of Euphoria
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...
May 30, 2023


Stealth Tightening
Not surprisingly, an agreement appears to have been reached to raise the debt ceiling. While negotiations were fraught, the debt ceiling...
May 29, 2023


Between Reality and Misconception
As a behavioural investor, the current episode has been fascinating and clearly challenging at the same time. The “everything bubble” as...
May 26, 2023


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