Cantillon Consulting Profile picture
May 8 15 tweets 12 min read Twitter logo Read on Twitter
Since the recent event with arguably the largest echo was the #FOMC decision, it's called - what else- "The Pause That Refreshes"
1/n
#FRB
#FederalReserve Image
The first thing to notice is that goods prices have broadly stabilised and volumes are fairly flat - in other words, #NGDP has ceased its torrid pace of increase. Service prices are still elevated but #payroll cost increase is slowing.
2/n Image
The #ISM #PMI showed an uptick but is still below 50 which implies that revenue growth is NOT about to accelerate again. Again, slower #inflation & flatline volume = an end to the boom, but not yet a bust.
3/n Image
Now, about those #banks.
For all the undeniable stress suffered by individual institutions, deposits are still only ~5% below trend - a lesser shortfall than pre-lockdown months. Admittedly the swing from surplus to deficit has been a doozy, but it's not yet Grapes of Wrath.

4/n Image
Broadly, #deposits are off ~$900bln since mid-Dec: ~1/3 of that has been *borrowed* back from the market, 1/3 from the #Fed & the rest accommodated by security sales -dumping ~1/3 of the vast hoard built up over C19. Meanwhile, money-market fund assets have jumped #$600bln
5/n Image
Where things do potentially get icky is the DC, where the #Treasury Secretary -further sullying her reputation as an actual economist- is #Yellen an' screamin' (!) that she wants MOAR blank cheques, NOW!

'Crowding' out or renewed inflation the only altetrnatives.

6/n Image
Institutional investors may have been picking up the slack left by the banks, but retail certainly seems less than enthused here, with long-term fund flows essentially flat for months.
7/n Image
As a result, the median stock has pretty much gone nowhere for a year (and has made no lasting new ground for since late 2017). Which way will #equities move when they leave this pattern?
8/n Image
#Bonds, too, have stalled out as everyone who is buying mega-caps because there will *be* no hard landing is cognitively dissonant enough to believe the #Fed pause turns to cut by the late summer & rates continue on down below 3%, 2 years hence.
9/n Image
FYI, there's an awful lot riding on just which direction we break out of this neat little wedge formation. Look at the #COT numbers, if you will:-

#UST #TLT
10/n ImageImage
6 short months ago, the #dollar was going to grind the politically hapless Brits & the suicidally #nuclear-phobic European #FX into the dust. All of a sudden, #Russia & #China are going to persuade everyone to eschew its use (face palm).
Upshot? Mean reversion.
11/n Image
As @steve_sedgwick & I discussed, no #oil analyst in the world seems to accept that the damn stuff is getting cheaper, not the converse (look at #TTF #natgas, too: 1/10 of last year's panic highs).
If anything, this looks like $60/bbl, however hard to credit.
12/n Image
But if the #energy crowd sounds more like a bunch of frustrated #gold bugs, *that* actual crew had their cheers die once more in their throats as the Pet Rock again bashed its head on $2075/oz.
A bit more banking angst & another #USD slide needed to get it out & up to $2400.
13/n Image
NOT investment advice -blah, blah, blah.

14/n Image
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More from @CantillonCH

Feb 14
Thanks to @GeoffCutmore & @steve_sedgwick for the chat on #SquawkBox this morning!

Short and sweet today, but I hope it was of some interest. The notes I put together ahead of time will follow in this thread...
1/x
First of all, it's #ValentinesDay and SOMEONE is going to get massacred today when the #CPI is released, so naturally:-

2/x
Roses are red, violets are blue,
JayPow doesn't know
And neither do you.

#inflation's effects are not as universal as they were, but does that mean we can all now relax?

3/x
Read 15 tweets
Feb 6
Agreed. The singular advantage of money as a near-universally acceptable, reliable medium of exchange is that it breaks the need to know and trust counterparts all along the chain of trade & production. 1/x
This not only expands -and hence enriches- the network of exchange (think Adam Smith or “I, Pencil”) but removes node-occupying middlemen and toll-exactors. Efficiency increases, but transparency and fairness, too. 2/x
Once we have #CBDC-s -coupled to #Agenda2030 #IoT tracking of ‘#carbon’, meat protein, ‘circular economy’, low food miles, etc, we will have subjected ourselves to an intrusive, permanent rationing where a tax collector, a camp guard, and a Levitican Inquisitor...
3/x
Read 11 tweets
Sep 30, 2022
Thanks to @GeoffCutmore & @cnbcKaren for this morning's chat on #SquawkBox.

I did TRY to find something positive to say - honest, folks!

Following are the notes I sent the team before the show:-
🧵1/x
Ok. So here goes...

2/x
Something I've mentioned on here: the enormous scale of Europe's energy problem runs into the €trillions. The #AmpelDesGrauens "Doppel-Wums" -'bazooka' - relief package is €200bln & doubts are *already* being voiced whether will suffice.
3/x
Read 14 tweets
Aug 16, 2022
Sadly, the delusion that government is a choir of seraphim, all celestial virtue & superhuman foresight is hard to dispel; not least since ALL parties exploit this, all teachers are themselves trained to it.

Now just imagine the whole country run by London’s train driver unions!
Most here will have no memory of the 70s -the never-ending stoppages, strikes & flying pickets; the ‘closed shop’, restrictive practices, collective bargaining, ‘beer & sandwiches’ deal-making. The poor service, culminating in the unburied dead, the garbage-filled streets...
The stop-go inflation, the sheer moral -and often financial-corruption of the shop stewards - greater and more immediate oppressors and intimidators of the real workers than were any ‘fat-cat capitalist’ boss...
Read 10 tweets
May 13, 2022
The world today🧵
The US is a bankrupt liberal arts college being run into the ground by sophomore, social studies snowflakes while the frat boys have broken into the arms locker and are shooting up the neighboutrhood, The Dean, meanwhile, can't remember where he put his glasses.
Europe: a weird mix of eager Bonapartism & a Judaean suicide cult from the 'Life of Brian'.
Worsula Fonda-Lyin' as Agrippina: Verhofstadt as Saint Just.

Gutting its own economy but now presuming to re-order the Pacific as well as poking the Bear on its (ever-expanding) borders
China: Seemingly gripped with #ZeroCovid insanity but with what hidden motives? A way of disguising credit bubble implosion? #Xi's battle with #Jiang's #Shanghai Gang? A hybrid war ploy to weaken a West lining it up in the crosshairs, post-#Putin?

Anyone??
Read 8 tweets
May 13, 2022
Here are a few slides I sent the guys by way of a pre-amble:
🧵
1/n
For all the blithe talk about #EnergyTransition, the blunt truth is that civilisation runs on hydrocarbons. Remove the latter and the former falls, too.

2/n
Even the food we eat requires them. We have not improved the living standards of all our teeming billions on the quasi-Neolithic methods of farming so beloved of the ignorant #Green metromarxists.

3/n
Read 8 tweets

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