“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end
The End of the Beginning
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This commentary is being provided to you as general information only and should not be taken as investment advice. The opinions expressed in these materials represent the personal views of the author(s). It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Any action that you take as a result of information contained in this document is ultimately your responsibility. Epsilon Theory will not accept liability for any loss or damage, including without limitation to any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Consult your investment advisor before making any investment decisions. It must be noted, that no one can accurately predict the future of the market with certainty or guarantee future investment performance. Past performance is not a guarantee of future results. Statements in this communication are forward-looking statements. The forward-looking statements and other views expressed herein are as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements, and there is no guarantee that any predictions will come to pass. The views expressed herein are subject to change at any time, due to numerous market and other factors. Epsilon Theory disclaims any obligation to update publicly or revise any forward-looking statements or views expressed herein. This information is neither an offer to sell nor a solicitation of any offer to buy any securities. This commentary has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Epsilon Theory recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.
“Interest rates are financial gravity” just may be the best line I’ve heard in nearly 40 years in this business.
If push came to shove and Powell were to dig in his heels on his aversion to negative rates, what could the Fed do about it? Start to liquidate some of the balance sheet? That would seem pretty weird, during the End Times and all. I think it’s probably all talk, and this will just erode the credibility of the Fed a little bit more.
I’ve believed for a while that the widening gyre is almost entirely explained as a consequence of a shrinking pie. Shrinking for the rubes, anyway, as the elites scoop up more and more for themselves. Wealth inequality has the first order effect of depriving the rubes of resources they would need to be a real threat, but also the second order widening gyre/shrinking pie that keeps them at each others’ throats to hamper their ability to use what resources they do have to effect change. Nonlinear positive feedback (to WI) makes for some kind of singularity in the future, and probably not the cool VR kind.
I prefer the phrase written as “THEY are all MMTers now”
and they’re jerks for doing it
I have a pet theory that we need a Big Project to arrest the widening gyre. Ideally one that is not a revolution or a big war. I like to poke fun at Elon Musk as much as the next guy, but SpaceX in particular is inspiring and aspirational to me.
I am so gonna steal that.
First of all this was a fantastic read!
As far as inflation is concerned I’ll share a story. In 2008 our manager came in my office and asked “ how close are we the bottom?” My reply was this — “ I don’t know but I will tell you exactly when we will hit the bottom, when I longer have the energy or the will to try to talk panicked investors from selling all of their positions.”
I was right on both counts , that day came, and it was the bottom.
My feeling on inflation is the same , once we all become convinced that this time somethings different and inflation is not coming that is when it will come. I think we have inflation now in everything but the inflation number, but I am talking about inflation that cannot be ignored or ?♂️.