As debate (or, empirical feeling out) of the evasive neutral rate continues, the key thing about the Fed actions is simpler:
Finally the money is not free – that madness is over. When money costs at least something nominally (1-2-4-5% – pick your number) it starts curtailing unproductive, speculative investments. Zero interest rates – good riddance! ...
The key puzzle about the drop in the US GDP in both Q1 and Q2 is the following:
how come the economy has contracted despite adding 2-3 million new workers? Possible answers look disturbing: 1) a dramatic drop in hours worked 2) a dramatic drop in productivity Thoughts? ...
One more anecdote defusing the popular notion of the “demand destruction” caused by higher gasoline and oil prices.
On the recent earnings call Valero (largest independent US refiner) said the following: “there’s really no indication of any demand destruction. In June, we actually set sales records. We sold 911,000 barrels a day in the month of June, which surpassed our previous record in August of ’18 where we did 904,000 barrels a day.We ...
The darling of both the Wall Street and retail investors, Apple reported earnings 8% LOWER year over year.
– Aren’t Technology companies supposed to grow day in and day out? Apple reported revenues growth of 2%, way below inflation and below the old dog IBM (which grew 9% year over year). Check this chart on long term earnings of Apple suggesting how much their earnings SHOULD decline for the next 2 years based ...
When people hope for a short and shallow recession, can we reexamine the setup?
Shallow and short recessions are preceded by lack of any meaningful excesses without any serious overheating. Do we have that? Hell, no! We had serious, serious overinvestment in: 1) Technology – 13 years bull run in Tech 2) Venture Capital – propelled by the trillions in returns in IPOs 3) Cryptos – massively overbuilt, despite ...
The price of Natural Gas (Henry Hub US) is close to retaking previous highs, signalling that the lack of supply in Europe would resonate globally.
How could it be otherwise, our promise (and even if Australia and Qataris) will step by LNG shipments to Europe, other LNG buyers (S. Korea, Japan) would start bidding up prices immediately to secure their own supplies. That is further reinforced by the merciless reality that even if the US, Qatar, Norway and Australia put ...