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Jens Nordvig Profile picture
@jnordvig
Aug 11, 2020 • 5 tweets • 2 min read • Read on X
I got a few questions on the correlations we are used to observing, and how unusual the gold move is today (vs usd, real rates, bitcoin)

Just data (do not shoot messenger pls)
Gold is a 'messy asset', and while it is correlated to real rates in a levels sense (and that correlation is logical), the link is note very strong in daily changes (in part due to the mess in March this year) Image
And bitcoin has some (also moderate) correlation to gold, while it has essentially zero correlation to the USD trend (not shown) Image
And then there is silver, even if gold is having its worst day in years, silver is still managing to underperform vs its usual relationship to gold (perhaps there was some froth in that market....) Image
These are just charts (I hope they did not offend anybody). Are markets efficient? Your judgement... #fama

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More from @jnordvig

Jens Nordvig Profile picture
Apr 21
Last week, we hosted a call for @ExanteData clients on the ongoing asset allocation shift and (very negative) implications for the dollar.

Here I am just posting the opening slides from the call, that illustrates that there is nothing normal about the current regime...

short THREAD
It is highly unusual for the bond market to sell off at the same time as equities are tanking and short-end yields are going down. But this is what we have seen in April, and it is getting worse this week... Image
It is highly unusual for real yields to be moving notably higher (to a > 20 year high, except Oct 2008) when growth expectations are being revised notably down (recession fears etc) Image
Read 6 tweets
Jens Nordvig Profile picture
Mar 4
Here are some basic observations about why the current US tariff policy plans are probably the absolute worst case scenario for US growth...

The cumulative tax effects are very large, and it is a complex system, hard to administer and entailing costly uncertainty.

THREAD Image
First,

Hitting the most integrated cross-border supply chains, at the core of US manufacturing, will entail a severe hit too US growth.

The tax effect of USMCA tariffs alone are > $200bn

(USCMA tariffs = ‘own goal’) Image
Second,

We are heading down a path of a complex set of individual tariffs, still ripe for circumvention (as not global). We think 8-10 different tariff pushes are now likely.

Here is a list of key proposals, some over-lapping (not including the agricultural-tariffs, that were added to the list yesterday)Image
Read 8 tweets
Jens Nordvig Profile picture
Feb 21, 2024
Nvidia $NVDA is hardly a cheap stock. But you often hear the comparison to Cisco $CSCO in the bubble. Is that fair?dot.com
Here are the (most) basic Cisco stats from 1997-2002.

The stock peaked in 2002 at 23 x Revenue
- margin was 64%
- rev. growth was 55% Image
Nvidia is trading at 27 x Revenue (more expensive than Cisco at the peak)

BUT
- margin is at 73%
- rev growth is at 126% Image
Read 5 tweets
Jens Nordvig Profile picture
Dec 16, 2023
For those thinking that the inflation experiences in the 1970s and the 1980s are instructive to this cycle...

Just a few background charts...

(mini-THREAD I guess)
The US economy is way more open. Hence, a lot of price dynamics are a function of the global economy, not just what is happening at home

imports to GDP were just 5% in the early 1970s, for example. Now >15% of GDP... Image
Unions played a much bigger role in the economy (>20% in the 1970s vs <10% now), and wage growth will therefore not be determined in the same way Image
Read 7 tweets
Jens Nordvig Profile picture
Dec 12, 2023
Everybody knows the details of US used car prices, the technicalities of the rent calculation, and even the oddities around obscure CPI components such as medical services...

but perhaps it is better to look at the big picture (global trends and China)...

- just a few of charts Image
The trend in global core inflation is almost back to normal (chart above)

And when you look at China, you think; should we not worry about deflation?

Headline CPI is as negative as in the covid shock, and almost as negative as in the CFC shock Image
And when you look at the latest China data, things are getting worse (assuming that you do not like deflation)

Despite the re-opening in 2023, the Chinese economy is observing greater deflationary effects, with momentum getting incrementally more severe in recent months. Image
Read 5 tweets
Jens Nordvig Profile picture
Nov 29, 2023
The higher for longer narrative is looking increasingly stale

(a few big picture charts)
First, the global trend in core inflation momentum is very clear. The worst is certainly behind us... Image
Second, while some economies have shown greater resiliency to higher rates than expected, global credit is very weak, especially vs 2022, but also vs pre-covid trend. Image
Read 9 tweets

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