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Jim Bianco Profile picture
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24 Oct, 4 tweets, 4 min read
The United States
(1/4)

Deaths, survival, and hospitalizations, are important but they do not drive behavior and policy. The "reaction function" is case counts.

When does this rise stop? What should the US do?

@ErikSTownsend @ttmygh @EpsilonTheory @chrismartenson @MishGEA
The Midwest
(2/4)

WI and OH are swing states? How does this impact them?

1. Blame Trump?
2. Republicans will vote, Democrats will stay home?
Western Europe

Does this vertical rise stop double again in the next few weeks? Double after that? Or is it peaking now?

When does it stop? What should Europe do?
(3/4)
The World (4/4)

The world never stopped its first wave. Now winter is returning to the northern hemisphere. What next?

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More from @biancoresearch

Jim Bianco Profile picture
2 Oct
Too many are "misreading" the polls, betting markets and investor opinion around the election. They are not the same.

Please read this short thread ….

The poll analyzers were only giving Trump a 10% to 20% chance of winning (shown are FiveThirtyEight and the Economist)

(1/5)
Betting markets gave Trump a 42% chance of winning yesterday before the announcement of the positive COVID test. His odds were 47% before Tuesday’s debate. Now they give Trump a 39% chance. This marks Biden’s largest lead.

(2/5)
Investors were more aligned with the betting markets than the polls.

FT – (Sep 25) Investors anticipate Joe Biden election win

UK pollster Survation found that 60 percent of 91 investment professionals polled in Sep, most based in the US, believe Mr Biden will win

(3/5)
Read 5 tweets
Jim Bianco Profile picture
25 Sep
ft.com/content/98ae29…

The survey by UK pollster Survation found that 60 percent of 91 investment professionals polled in September, most based in the US, believe Mr Biden will win the upcoming matchup slated for November 3.

(1/4)
We have argued investors view the election in the same way the betting market views it.

As highlighted above, 60% of investors think Biden will win. This is nearly identical to what the betting markets have discounted.

@PredictIt

(2/4) Image
These probabilities are not close to how the poll analyzers see it. @FiveThirtyEight gives Biden a 77% chance of winning. The @ECONdailycharts models give Biden an 85% chance of winning.

projects.economist.com/us-2020-foreca…

projects.fivethirtyeight.com/2020-election-…

(3/4) ImageImage
Read 4 tweets
Jim Bianco Profile picture
16 Sep
A thread explaining why the bond market is asleep and what wakes it up.

---

The next chart shows the MOVE Index (Merrill Options Volatility Estimate). It is the “VIX of the bond market” and is near its lowest reading in history (which was set on July 30).

(1/10)
Should interest rates be this low? Consider these 2 charts.

The bond market often moves in tandem with commodities. But as the boxes show, that has not been the case recently.

Commodities are suggesting interest rates should be moving higher, but they are not.

(2/10)
* Top panel shows the SPX (log)
* Orange bars show the VIX’s close on days the SPX hit an all-time high (ATH).

VIX hit 26.57 when the SPX hit an all-time high on Sep-2. The VIX has never been higher with SPX at ATH.

Stocks are not exhibiting low levels of volatility.

(3/10)
Read 10 tweets
Jim Bianco Profile picture
14 Aug
bloomberg.com/news/articles/…

He would be comfortable with inflation around 2.25% or 2.375%. The policy, known as average inflation targeting, would be a shift from the Fed’s current way of keeping prices stable, in which it targets 2% regardless of what happened in the past.

(1/4)
What Avg?

Below uses YoY chg in core PCE (orange) and the 6-mo Avg of this chg (yellow).

Kaplan's target has only been reached one time in the last 25 yrs, 06/07.

What would the reaction to Kaplan's comments if it was spun as "Fed ok with a 25-year high in inflation"?

(2/4) Image
To be fair, the Fed says they target headline. I would argue they really mean core.

The difference is largely gas prices.

Why core? Every time headline inflation surges because of gas prices, they call it a "tax" on the economy and back away from hiking rates.

(3/4)
Read 4 tweets
Jim Bianco Profile picture
9 Aug
The most active @PredictIt now is VP betting, regularly over trading 1M contracts a day (bottom panel). Total Open Interest is 20.8M

Harris leads has always led. But she is going the wrong way and now under 50%. Rice and Whitmer are rallying. No one else above 5%.

(1/3)
The decision is expected next week

My interpretation of this price action, Harris is the default choice they will settle with but they are desperately looking anyone/someone else.

(2/3)
Remember our view ...

Betting markets aggregate all known information into one probability into a type of real-time poll.

Does mean they are right, but all the KNOWN information suggests these are the most likely probabilities.

(3/3)
Read 4 tweets
Jim Bianco Profile picture
23 Jul
Today's case count hit 70k again ...

(1/6)
… led by the southern states ... but note some hope ... the seven day average (orange line) might be peaking.

(2/6)
Now for the bad news ... a potential new hot spot unfolding ... the upper Midwest. The 7-day average (orange) made a new all-time peak today, taking out its May peak.

(3/6)
Read 6 tweets

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