When you are a Boomer Central Banker, everything looks like the ghost of the 1970's...heuristic bias will give unexpected outcomes (deflation) when total debt to GDP is this
Meanwhile, memes rule the world and the Central Bankers in their late 60's worship this meme: Wrong person for these times.
But the politicians (in their 70's mainly) are focussed on this meme...The Pension Crisis, where the system is forced to bail out past unkept promises. Voters will win in the end and household bail outs will come.
Everyone else can just worship #REKTGUY as rents are unaffordable, property remains unaffordable, real wages cant rise and central bankers are busy destroying wealth to get on the front of a book.
And the robots are coming for your jobs...
Everyone has to figure out in this broken system how they are going to make it. WAGMI? Depends what you own. I like the own the thing that destroys the old system. You can fight technology or invest in it but it ain't going away...
You can fight QE but it ain't going away (the debt is too damned high and Boomers are too damned old).
The J-Po might want to be Volker but the politicians will win (its the voters, stupid!) and the cowbell will return and when it does...
You need to own the stuff that goes up the most.
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The bond market is now as broken as it was at the peak of the pandemic. Back then 10yr futures moves 10 handles in 12 days, right now its 10 handles in 36 days.
Liquidity is equally as bad.
Vols are as high...
It has totally decoupled from the business cycle...
Welcome to my newsletter: Short Excerpts from Global Macro Investor!
As many of you know, I run a research publication that goes out to many of the world’s largest and most prestigious capital allocators.
Now, it’s time to share a bit of it with you... rvtv.io/3C3oe5U
Some background...
GMI was born in 2005 when I retired from managing a large hedge fund, moved to the Mediterranean coast of Spain and started writing monthly 100+ page reports for a highly restricted paid membership consisting of the world’s most important...
hedge funds, family offices, sovereign wealth funds, institutional level investors, and pension funds.
Using a combination of technical and fundamental analysis rooted in a deep study of the business cycle, the report provides readers a comprehensive framework...
OK, pulse check time. Fed out of the way... a few polls for you so we know how we are all thinking. There is no right or wrong! None of us knows...but thanks for voting!
A Sharpe Ratio is (roughly speaking) the excess returns over the observable volatility of an asset. A Sharpe over 1 suggests you get more than compensated for the volatility of an asset. Its important... 1/
In simple terms, Sharpe <1 not great, Sharpe <0.50 a crap shoot, Sharpe > 1 a good risk reward.
For many reasons, its not a perfect guide but it helps understand if the risk you are taking over time is worth it...
If an asset has 30% annual returns and 30% average 30 day volatility, the Sharpe ratio is very roughly 1. If the returns are less than the vol, its <1 and above its >1.
It is a useful guide to finding if you have the right asset for your allocation.