Forum Topics Macro Outlook
Hackofalltrades
a month ago

New newsletter from Lyn Alden - https://www.lynalden.com/august-2023-newsletter/


Mostly focusses on AI.

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thunderhead
a month ago

Lyn is one intelligent cookie. She also has a book out, and has written it in under a year since hinting at the idea!

https://www.amazon.com/Broken-Money-Financial-System-Failing/dp/B0CG83QBJ6/ref=sr_1_2?crid=2SYYSHEREYJ5C&keywords=lyn+alden&qid=1692970947&sprefix=lyn+alden%2Caps%2C415&sr=8-2

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Bear77
a month ago

Amazon says it's currently unavailable in both hard cover and paperback, but I've added it to my Amazon wishlist for when it becomes available again. Have you read it @thunderhead ?

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CHill
4 weeks ago

I've been rather quiet on Strawman the last 12 months but still lurking reading posts. The last 12-24 months I've been so fascinated by macro and Lyn has been a great teacher over that time.

Last night Powel came out to talk at Jackson Hole. Most the headlines read that he was hawkish and there is more work to do but given 10Y bond yields were largely unchanged nothing he said could have surprised markets. He's still cautious on a second wave of inflation whilst acknowledging that it is moving in the right direction. "Although inflation has moved down from its peak — a welcome development — it remains too high,"

I'm keeping a close eye on China as this post covid "rebound" that everyone way betting on never seemed to come around. Personally I think we're closer to deflation than we are another wave of inflation. Jeff Snider from Eurodollar University sums it (China) up in a 15 minute video better than I ever could - Here

I've been having some fun trading NDQ both short and long whilst learning Macro but I'll be retiring this and going back to stock picking. Shorting markets isn't for me, I prefer to sit on my hands and let businesses do their thing.

Cal

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edgescape
4 weeks ago

Perhaps everyone overestimating the fear of China deflation

It will pay to concentrate what is happening "surrounding" China ie: the Southeast, Indo-Pacific.

But I agree there will be lots of volatility during the adjustment as people take their eyes off Asia ex-China and Indo-Pacific.

Iron Ore market could be a clue but I realise also a very contrarian and perhaps flawed metric.

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thunderhead
4 weeks ago

I only got to know she had a book out a couple of days ago when I came across a tweet (or is that 'X'?) from her @Bear77. She first announced it on October or so last year.

Sounds like an interesting read, though I have no idea when I can get to it. Also, my Amazon link was to the US site - not sure if it is available on the Oz site yet.

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mikebrisy
a month ago

Here’s the latest overview of the global macro, from my favourite economist Mohamed El-Erian. Link to video

It puts market performance August to date in the context of the bigger picture, and offers a worrying diagnosis of China.

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mikebrisy
2 months ago

US Macro - Retail Sales Update

Here is the latest "Market Takes" from WSJ with Dion Rabouin. It is a great data-driven narrative overview of where the US macro is at.

Market Takes Video

Key messages:

  • Retail data continues to support a "soft landing summer"
  • Goods in decline with services keeping inflation positive
  • Some discretionary categories moving back into positive territory - is it a one month blip?
  • Future data series on the y-o-y report will see the data starting to cycle declining inflation
  • Overall, muted market response to the data as broadly in line with expectations
  • Fed Futures Funds seeing a 97% probability of 25bps raise next week. (A hold would be a big surprise to the market)
  • On a histoical basis we are quite far into the tightening cycle - the market expects one more rise, then done
  • If Fed raises, expect to hear increased chorus of voices saying the Fed is "doing too much"


By the market close, all major US indices in positive territory.

Note that, separately on Monday, Goldman Sachs reduced its probability of a US recession in the next 12 months from 25% to 20% (if that means anything at all!)

Here's the key data from the retail report.

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Hackofalltrades
3 months ago

https://www.lynalden.com/july-2023-newsletter/

Note that these graphs are US centric.

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I'm not sure I agree with all of this. While increasing interest rates will increase debt and deficit, I I wonder it will still lower demand and inflation. My thinking here is that more federal debt here will not increase demand for goods because the debt is not being used to purchase things (instead it's just creating extra debt) like it would be with a normal government deficit where they are creating infrastructure programs or giving money to people.


Regardless of this, I think my view remains that this debt is never getting paid back without massive inflation above interest rates or monetisation of the debt.


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This is interesting on housing.

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