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May 26 • 5 tweets • 2 min read
1/5. A Bloomberg article this morning discussing the Fed minutes put me onto a resource I was not aware of before: the Cleveland Fed's 'Inflation Now Cast'.

clevelandfed.org/our-research/i…
2/5. Does not bode well for official Private Consumption Expenditures (PCE) inflation index (Fed's favourite) release out tomorrow. Both 5.00% y/y & 0.45% m/m core PCE figures for April are slightly ahead of consensus. Trading Economics has core PCE y/y at 4.90% & m/m at 0.30%.
3/5. Note also that in the Working Paper backing this Now Cast Inflation model, the Cleveland Fed claims that its #s are superior to a the most popular consensus forecasts.
4/5. The Working Paper also has this data time line if you are confused over the release schedule of the PCE and CPI. The link to the Working Paper is below.

clevelandfed.org/en/newsroom-an…
5/5. Cleveland Fed says that they update their CPE & PCE Inflation Now Cast daily. Definitely will be a resource I will be checking in on from time to time.

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More from @shortl2021

One Bubble to Rule Them All Profile picture
May 27
A couple of people in the comments to my book recommendations have flagged this one. Since I loved Bookstaber’s “A Demon of Our Own Design”, the long weekend appears a perfect time to tuck into it. Image
I’ll dig out the tweet. I haven’t done a long thread, but just to get started I picked out 5 of what I believe are ‘must reads’.
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One Bubble to Rule Them All Profile picture
May 27
1/9. Wow, EVERYONE should read this. There could not be a clearer demonstration that we are in Cold War 2.0. Out goes the diplomatic language of things 'better left unsaid', and in comes statements like this:

state.gov/the-administra…
2/9. "China is the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military, and technological power to do it...."
3/9. "....Beijing’s vision would move us away from the universal values that have sustained so much of the world’s progress over the past 75 years."
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One Bubble to Rule Them All Profile picture
May 27
1/9. I think the Fed may be far too complacent over medium- & long-term inflation expectations remaining anchored.

libertystreeteconomics.newyorkfed.org/2022/05/what-d… Image
2/9. The last time inflation hung around the 5% level for any length of time was in the late 1980s. Since then we have just had 2 one-year wonders when inflation blipped up and then went straight back down again.

whitehouse.gov/cea/written-ma… Image
3/9. In a fascinating YouTube conversation between @JackFarley96 & Michael Ashton @inflation_guy a week or so back, Mike pointed out that expectations are set by those items consumers purchase most frequently. Obviously, those would be food and gasoline.

Read 9 tweets
One Bubble to Rule Them All Profile picture
May 26
1/25. Managing Money in a Crash, Part 2a: Risk Compliance

A want to return to the topic of how (from personal experience) hedge funds are not able to act as automatic stabilisers during major market drops, or the charmingly named market 'pukes'.

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2/25. As an old git, I've lived through three of these market routs, being employed in different capacities along the way. During Black Monday, the 'Big Daddy" projectile vomit-style puke of all time, I was working as a financial editor at Nomura Securities HK office.
3/25. For the GFC & Lehman shock, I was managing a very aggressive institutional long-short Japanese equity hedge fund out of Tokyo.
Read 25 tweets
One Bubble to Rule Them All Profile picture
May 26
1/4. And while the Bloomberg article is not really Crypto focused, I just happened to be checking out all the crypto charts. They seemed to find a support around May 11, but one by one are breaking to new lows today.

bloomberg.com/news/features/… Image
2/4. From the Bloomberg tech article:

"Since the start of the year, the Bloomberg Galaxy Crypto Index, which measures the performance of the major cryptocurrencies, is down 48%....."
3/4. "....The mania seemed to reach its most “something ain’t right here” moment during this year’s Super Bowl, when NBC broadcast crypto ads starring LeBron James, Matt Damon, and Larry David...."
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One Bubble to Rule Them All Profile picture
May 26
1/14. Fascinating analysis of supply chain diversification out of China by @MacroPoloChina (HT to @Noahpinion). Reading the article, my first reaction would be "Diversification? What Diversification?".

macropolo.org/analysis/suppl… Image
2/14. And what did come out of China was low end:

"Delving further into these suppliers, many of the sites Apple removed from China were specializing in labor-intensive work such as packaging and metal production...."
3/14. "....At the same time, Apple added 14 new Chinese suppliers to its roster in 2021, many of which were higher value, knowledge-intensive manufacturers of intermediate goods like optical components, sensors, and connectors."
Read 14 tweets

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