1) Our first virtual Salon may not have had the delightful food and drinks of past dinners but it had the same distinctive style and ground rules (one chart, no social sharing, trolling or showing off). 👇 stray-reflections.com/article/148/Gl…
2) The most dangerous asset you can have in a portfolio is the 30-year Treasury…
But so far, no one is worried because the last 10 years of QE didn’t create inflation.
But what if there is actually a change in monetary regime?
3) Pandemics have a way of shifting the course of history, and not always in a manner immediately evident.
We’ve crossed some chasm by directly giving money to people. stray-reflections.com/article/149/Cr…
4) For more than a decade, investors have questioned the durability of the European project.
But landmark EU budget deal reached by the European Council on July 21 should put an end to that.
5) We have reached the climax of Euroscepticism.
We could start to see risk premia compress across European assets. European banks, senior subordinated debt, CoCo bonds could all do well. stray-reflections.com/article/150/Th…
6) “When the US got medical supplies shipped in during the height of the pandemic from China and Russia, that sort of felt like a poignant moment for what may be the reversing of American exceptionalism.”
7) But it would be wrong to turn bearish on US stocks if American exceptionalism has indeed come to an end.
It will get priced through a weaker dollar while stocks counterintuitively zoom higher.
8) The election will be decided by the trend of Covid cases and the economy. Both trends are supportive of Trump at the moment. stray-reflections.com/article/151/Co…
9) The ingredients for “creating an incredible soup for a risky asset bubble” exist.
10) All the levers of risk taking are going to get yanked by the collective pension funds of the world to meet their return requirements. stray-reflections.com/article/152/Th…
11) This enormous tailwind will join the other tailwinds of central banks’ new inflation policies and fiscal “MMT” type financial relief programs.
12) Could we be in for an inflationary boom, with pension funds chasing assets, with governments around the world searching for ways to put money in the hands of the people, and shall it be on the backs of a declining dollar with the end of American Exceptionalism?
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