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George Robertson

@BickerinBrattle

Oct 15

Want to be clear.
My only professional accreditation was a beer soaked BA in History from UWO.
Rest has been autodidactic.
While considered an expert in derivatives and the stochastic math involved was all learned by terror that my initial BS would be uncovered.

My career path was chutzpah, striding onto Sali trading floor and gaining a job with that audacity my main attribute in the eyes of the partners. Did this several times and always frantic near 24 hours/7 study to make bravado into reality following.
Have managed billions -

...or as spouse says "yes yes, gillions and gillions now take out the trash".
I made 4 fortunes, lost 4 fortunes. My son considers me an unrepentant gambler.
Most if not all of my market knowledge is making terrible error at worst possible time then when barely surviving...

Read 6 tweets

George Robertson

@BickerinBrattle

Oct 15

something 4 sigma happened Thur 13th and then 14th was all JPM earnings.
The CPI set the stage where if there were any ability for the Fed to have been tightening or slowing econ would have been apparent.
But then a leak of JPM earnings or common sense took over anticipating JPM

2/ ... earnings took over. Not in terms of JPM itself but how JPM operates as the sink (I use analogy of the liver) where all aspects of US econ ends up with in its balance sheet and dynamics.
Any whiff of Fed caused a slowdown or about the Fed about to cause a slowdown, ...

3/ ......or even a recession were not present. This means that the market's understanding of the linkage between the Fed Reserve and the US economy is not understood or is wrong. Consider Blackrock and its clout and vantage point - no doubt receiving calls from Powell himself..

Read 25 tweets

George Robertson

@BickerinBrattle

Oct 14

Stock val report via Buffett/Tobin NGDI spot level, NGDI in 7 level.
Fed is powerless to stop or curtail nominal NGDI growth given the rate required is at least 6% immediately, it is the current and implied forward NGDI that will determine stock values.
rpubs.com/GMR_NYC/956173

This incredible surge in NGDI and via beginning of normalization in NGDI forward (using Fisher Effect brought forward) has likely never before been experienced - but perhaps it was pre-Fed 1913.
The basis, difference between NGDI in 7 and spot NGDI is decade plus highs.

The accelerant of this basis growth is the base rate but also the term premium, how much increase in yield required to get extension of 1 year maturity in US Treasury. Did drop but now more than enough to enable growth given base effect.

Read 12 tweets

George Robertson

@BickerinBrattle

Oct 13

Under the genius of Michele Smith, the Fed has hammered into the market that only expectations matter and they decide expectations. This was done with decade of floor (often ZLB) rate setting with ample (flooded?) reserves. This way they could have free hand from Congress.

Basically this decade of floor/ample with constant barrage of expectations shaping/defining narrative has beaten the media and most practitioners into submission and they think say what Fed wants them to think and say. The partner to this was always an austere administration.

NGDP suffered but not enough to expose this bargain between admin and Fed, and Congress quite happy to shift blame for anything econ so as to maintain the 50/50 divide politically. The Fed used a Wicksell myth to cloak this power play with some semblance of respectful thesis.

Read 16 tweets

George Robertson

@BickerinBrattle

Oct 12

The Fed cannot raise rates high enough to impact inflation by raising unemployment. That is just not politically feasible. So therefore the Fed is a "red herring".
Given basic macro and monetary economics and assuming the Fed cannot force a slowdown, then...

2/ ....that leaves it to Biden and Congress to slow nominal GDP growth by about 5% which can only be done via tax. This is also politically impossible.
So the only way to "balance the books" is let inflation carry on which will mean at least a 4% inflation for next 3 years.

3/ This puts nominal growth for at least 3 years forward unimpeded. That will not trickle down but will blast through the economy in the form of wages like a firehose. That is already being seen. While the force of this surge will frighten and folks will raise savings...

Read 10 tweets

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