Investing in 2022

Many investors claim that in 2022, stock picking would be key.We strongly disagree for two reasons!First, it is a feel-good excuse to give false hope that you can through a minefield unhurt.Second, this year of 2022 is already shaping as a year of profound turns in Macro flows: inflation, rates, commodities, and global cross-border flows would ...

FED

The Fed needs a 75bps rate hike, followed by a 50 bps hike to have any fighting chance of arresting the inflation. With the currently planned sheepish 25 bps hikes it would take years to restore the normalcy.  ...

Intriguing pivotal junction for two key market indicator

We are at the intriguing pivotal junction for two key market indicators: technical levels for 10YUS Treasuries yields and Brent Oil10YUS Treasuries are “trying” to break through the 1.8% ceiling – going back to the January of 2020While Brent Crude Oil needs to pierce this ~$86.4 (triple top!) to overtake the previous high of October ...

Bank index vs. the real 10Y yields

I never understood investors enthusiasm about banks in this cycle:With real rates destined to be negative for at least several years, and alarming creeping wages,how can banks possibly provide compelling returns?Again, their product – loans will never be priced to reflect the real economic cost of money, while their workers would expect 7-15% salary rises.Look at the ...

COMMODITY SUPERCYCLE 2022

The World Bank issued a grim forecast for Emerging Markets, citing inflation and higher rates.Seriously?Most Emerging markets (with the exception of India, Turkey, and China) do benefit from higher inflation: they always ride the wave of the commodity supercycle, and many Western Countries to boot!But thinking broadly the multiplier effect is broad-based:As I think about ...

What is the dollar for now?

By covid standards I travel the world rather vigorously: was on 3 continents both in 2021 and in 2020.My biggest economic observation is remarkably consistent: the US Dollar is so overpriced against virtually all global currencies – from the Euro to Peruvian Sol.I am sure many economists would side with me.Yet, that tantalizing premium remains ...