Friday, 21 April 2017
Hillary voters on strike/ freakout.
Tuesday, 11 April 2017
ECB LTROs/ QE leaked into Treasuries in a x-currency carry trade. But as the Fed hikes there is potential for the carry to go negative between funding costs and US curve flattening.
If Italy's Target 2 imbalances went over 100% of GDP (currently about 22%), it would make the economic case for a Lira and deval quite difficult given much of the banking system's liabilities would stay in Euros... You could say this is Germany's doomsday machine to stop countries leaving.
Tuesday, 4 April 2017
Fed rate hikes will bring forward the destructive consequences of the 'fourth turning' as positive regeneration is driven by wage growth and the Fed stays deliberately behind the curve as we enter a wage-inflation cycle.
Yellen's replacement will be key to this playing out as will tax reform and infrastructure spending. Without these demand supports in the economy the rate hikes will trigger a debt deflation triggered recession, and the bond market seems to be still fixated on this downside scenario.
From an investment standpoint you need to back the new structural winners, while getting out of the new structural losers, ie areas that have been the winners since the early '80s.
You also have to wonder if Trump will attack North Korea or Yemen.