When people contemplate the coming risk of a recession hitting Emerging Markets (EMM) harder than the developed markets, I see little objectivity in that conclusion.

It reflects nothing but hyperbolic retrospection of the 90th, when Emerging Markets were over levered and the Developed World debts were very low. Let’s look at the Debt/GDP ratio (vertical axis) vs. the 10Y interest rates (horizontal axis): It is so striking that Emerging Markets have much lower Debt to GDP (40-80%) vs. the Developed ...

Financial markets and physical markets are telling two different stories

Crude Oil futures offer 40-60% annualized returns,assuming even if the oil would not go any higher ...

As the price of crude oil stopped its advance and looks to be stabilizing, let’s see at the price of that noble effort:

The amount of crude oil released from the SPR since the end of 2021 is the steepest drop in US history.Now the SPR holds the crude oil amount equivalent to the 1987 level, when our economy, the population were much smaller…. Obviously, this current release was done with a single goal in mind – arrest ...

Foreigners still have/had MAJOR overallocation to the US assets for more than a decade, and post-Covid policies just amplified these trends.

We had this breakneck outperformance of the US assets being solidly grooved in since the 2009:  1. US equities were booming2. US Treasuries (sovereign bonds) were booming3. US corporate credit was booming4. US Real Estate was booming5. US Dollar was booming6. US Venture Capital was booming This outperformance grew increasingly in conflict with the fundamental, ...

Today’s report from JP Morgan, when they suspended stock buyback, has clearly reminded us all of the important issue that, unfortunately companies do NOT like to buy their shares when things are tough or getting tougher.

Well, the conventional logic – we have money to buy back shares when things are good, denies the reality that the goal should be to buy a stock cheap, not when it is advancing…It is a clear misallocation of capital by Treasuries and Boards to authorize buy backs at the top – these are counterproductive.While shares buybacks ...

Given the current government intention to tax the “windfall” profits of energy companies (never mind that in 2020-2021 about 90 US energy companies went belly up), is a review of what happened during the 1973 Oil Embargo.

In 1973, OPEC boosted prices and the newly created Department of Energy, led by William Simon, imposed taxes on so those “bad” oil companies couldn’t “take advantage” of the higher crude prices created by OPEC to reap “windfall profits”.Contrary to expectations, these windfall taxes forced US companies to reduce output and underinvest in drilling, etc. ...