Guild’s Basic Needs Index
Stablecoins May Not Excite, But They Matter — A Lot
The Biden administration has engaged substantively on digital asset regulation. It is preparing an executive order, after input from various agencies, including the Financial Stability Oversight Council, which will set the stage for the development of a comprehensive digital asset strategy document later this year. The executive order will likely
Nuclear: The End of Europe’s Energy Nightmare?
Most observers would agree that Europe’s energy sector has reached a point of crisis. Political, geopolitical, and macroeconomic trends are colliding in a volatile mix that has led to significant price volatility and public anxiety. Gas has been a key culprit. Source: Jefferies Equity Research The forces that are at
The Markets This Week — 10 February 2022
Interest Rates, Inflation, and the Fed’s Coming Gut Check This morning’s CPI print hit 7.5% year-over-year, up 0.6% from the previous print, and slightly worse than expected. Some (not us) had believed that December’s number would be a peak; it was not. Given trajectories of energy and housing costs, February
Crypto Comments: Defi Hacks and Central Bank Digital Currencies
An Instructive DeFi Hack Last week, Qubit Finance, a defi (decentralized finance) project operating on the Binance Smart Chain, was hacked to the tune of $80 million — haplessly offering the anonymous hacker a $2 million reward to “do the right thing” and return the funds. (He hasn’t done so
The Markets This Week — 3 February 2022
Tactical Shifts Bring Improvement U.S. markets — stocks, bonds, and real estate — are all still very much in the process of digesting the arrival of higher rates. The recent respite from volatility may have had something to do with technical factors. First, managers who harvested losses at the end
The Markets This Week: The Fed’s Signals Trump Good Earnings
How To Understand Current Volatility, and What To Expect Markets are beginning to digest the arrival of higher rates and the start of the Fed’s balance-sheet runoff. Even more than usual, there is a host of cross-currents influencing markets as the aftershocks of the pandemic continue to reverberate through the
Interest Rates, Inflation, and Earnings: What Matters Most?
This past weekend we were invited to present our views on the current investment landscape to the local chapter of the American Association of Individual Investors (AAII). As our title indicates, there are many macro factors at work, all of them of fundamental interest to investors. How do we rank
GBNI Update
As we noted last week, our in-house real-world inflation indicator, the Guild Basic Needs Index, has cooled from last fall’s recent year-over-year high of 31.9%. It now stands at 23.7%. It’s down from the peak, as is to be expected as the pandemic wave recedes. What we think will be
The Markets This Week — 20 January
Above, we noted the potential political consequences of inflation. Certainly, inflation, and erosion of real wages, is a primary element in the electorate’s increasing dissatisfaction with the current administration. It is not the only one, however. In many metropolitan areas, including those that saw protests in favor of police reform
Commodities: Crosscurrents and Undertow
Another month, another blistering inflation report; the consumer price index rose at a 7% annual rate in December. Of course, as our regular readers have heard us say often, the methodology used to calculate that rate has changed often over the decades — invariably in a way that understates the
The Markets This Week — 13 January
Looming higher rates — and now, the looming run-off of the Fed balance sheet — have finally begun to penetrate market consciousness, with the result that the sell-off which had been happening “under the hood” spread more widely and visibly to the major indices. As usual, the median stock has
Energy Chaos In Europe and the Transition to a Green Economy
Current events in Europe show that even if it’s inexorable, the decarbonization of the global economy is unlikely to be smooth. The latest drama swirls around natural gas and the new German government elected in November, which includes more powerful representation from the Green Party than ever before. The Greens
Crypto Comments: Chainlink
While bitcoin launched crypto as an asset class, its primary function is simply that of a digital currency. Currently it seems to be displacing gold in the minds of a generation of investors newly concerned about irresponsible monetary policy and fiat debasement — though of course it is for the
The Markets This Week — 6 January 2022
Current events in Kazakhstan underscore the significance of uranium, as nuclear energy enjoys a renaissance. Of course, although Kazakhstan accounts for roughly 40% of world uranium production, it is unlikely that unrest there will be an enduring problem for uranium supplies, although it may be unfortunate for ordinary Kazakhs. The
S&P Tech Dominance, Why It’s Unlikely to Change, and How It Can Help You Combat Inflation
With all the ups and downs that have accompanied the pandemic — stay-at-home stocks duking it out with reopening stocks in rounds that have tracked the virus anxiety cycles — mega-cap technology stocks have continued to outperform the broad market. This is a trend visible since early 2020 (top graph),
Market Summary — 30 Dec 2021
Two days before year-end, the S&P 500 is once again near all-time highs. In hindsight (as far as the US stock market is concerned), 2021 was a year where it would have been a good idea to: tune out all of the political haranguing and off-the-charts debt spending, ignore the
