Jim Bianco biancoresearch.eth Profile picture
President of Bianco Research LLC. We specialize in macro analysis for institutional investors. biancoresearch.eth
Jessymogan Profile picture Ray Profile picture Kiran Ravuri Profile picture marafat Profile picture Aron van der Hijden Profile picture 23 added to My Authors
26 Nov
1/3

The desire among investment bank bank economists, and the Fed, that inflation is transitory is so strong that they either ignore data that conflicts, or intentionally get it wrong.

This story is no different. It is wrong.

bloomberg.com/news/articles/…
2/3

Their is no need to get it wrong as the CME's website updates these numbers in real-time. It's one click away to get correct.

cmegroup.com/trading/intere…

As of 5 minutes ago, the probability of a JUNE rate hike was 66%. Not September as noted above.
3/3

This story also says the second rate hike is 2023.

Nope!

(add up the yellow highlights),
June 2022 odds of first rate hike is 66%

Sept 2022 second hike odds is 49.5% (Nov is well over 50%)

Dec 2022 third rate hike odds 45%. (Feb 2023 is well over 50%).
Read 4 tweets
25 Nov
1/7

A thread about the latest with COVID.

Europe' case counts hit a new all-time, as did Germany.

Lockdowns, restrictions, and protests (sometimes violent) are everywhere in Europe.
2/7

The world hit a new 10 week high yesterday, and cases are going vertical (orange) line.
3/7

And the US is now moving up, no mistake about it (orange line in the last few weeks).

And, as we have noted before, whenever cases spike in one area, they eventually spike in other area.
Read 7 tweets
19 Nov
1/4

Chicago hedge-fund billionaire Kenneth Griffin said he won a $43.2 million first-edition copy of the U.S. Constitution at a Sotheby’s auction on Thursday—and now he intends to lend it to a free Arkansas art museum.

wsj.com/articles/citad…
2/4

Yes, he is a long established big art buyer, and sits on many art museum boards.

But I do not believe he has shown interest in Revolutionary War era documents before last night.
3/4

He's not a crypto fan:

Last month at the Econ Club of Chicago, he told the audience that he doesn’t trade in cryptos because of its “regulatory uncertainty,” adding [he]“wished all this passion and energy that went into crypto was directed toward making the US stronger.”
Read 5 tweets
19 Nov
1/5

What do Crypto prices correlate with?

A popular narrative now is an inflation hedge.

But as this chart shows, the correlation is poor (bottom panel). Of course, this look backwards so it could be an inflation hedge going forward.

But something else correlates better ... Image
2/5

Two charts below.

One (single line) is a standard price chart of ETH. The other (two line) is the Bloomberg Payments Company stock index (red) with the ETH price PLOTTED INVERSELY.
When shown like this, they do seem to move with each other. ImageImage
3/5

Below is the correlation (bottom panel) between payments and ETH (plotted inversely in top panel).

The correlation is getting more negative over time.

This mean the relationship between higher ETH prices and lower payment stocks, or an inverse relationship, is growing. Image
Read 5 tweets
18 Nov
1/4

Yesterday, Western Europe printed the highest daily case count of 2021 (bars). And it was the fourth highest daily count ever, only the November 2020 peak was higher. Image
2/4

Germany, Austria, and the Netherlands all spiked to new all-time records yesterday. ImageImageImage
3/4

Worldwide cases hit a two month high yesterday. Image
Read 4 tweets
17 Nov
1/7

*MERKEL SAYS CORONAVIRUS PANDEMIC IN GERMANY IS `DRAMATIC'

It is the highest ever daily count (blue bars) and 7-day average (orange), and still going vertical.
2/7

Austria and the Netherlands are the same as Germany.
3/7

Western Europe is still surging and the 7-day average (orange) is the highest since January.
Read 8 tweets
17 Nov
1/4

Biden told reporters on Tuesday to expect the announcement of a nominee for Fed chair in “the next four days.”

bloomberg.com/news/articles/…
2/4

Note that Powell has never closed below 50% and is not zooming to near 100% in anticipation of this announcement.

Instead betting market volume is spiking and the Powell/Brainard spread is the narrowest ever.
3/4
Reminder, I think the odds are

Powell 50.001%
Brainard 49.999%
It is that close.
Read 4 tweets
15 Nov
1/5

Mr. Biden met each candidate separately for interviews on Nov. 4, and he was joined in the Oval Office for those meetings with only one other adviser, National Economic Council Director Brian Deese, according to people familiar with the matter.

wsj.com/articles/biden…
2/5

Each meeting was scheduled for one hour, though Ms. Brainard’s ran slightly over the allotted time, one of these people said. Some people familiar with the matter said Ms. Brainard’s meeting went better than expected.
3/5

Yet another story that paints Brainard in a better light than Powell.

But the betting markets are still steadfast that Powell is 70-ish% to get renominated.

Recall I think it is
Powell 50.001%
Brainard 49.999%
Read 6 tweets
15 Nov
1/6

60 Minutes did a segment on the Supply Chain

As I have been saying for weeks now ... What is the worst day of the supply chain problem? Answer, today. And tomorrow should be a new extreme.

cbsnews.com/news/supply-ch…
2/6

This gives the impression is the chain is at 100% and it will take years to expand it. And that assumes everyone wants to invest the big $$$ to do it.

So, to repeat myself, how do you fix this? Zoom prices much higher so we stop buying stuff.

See the latest CPI report
2/6
Transcript:

Peterson: If they can't get their products in in time for the holiday season. And of course it also means consumers are going to pay really high prices for everything.

Whitaker: So this is what inflation looks like?

Peterson: Yeah, this is inflation first-hand.
Read 6 tweets
14 Nov
1/20

The Economist is echoing what many on the MSM are saying ... COVID is about to disappear.

The only problem is the data says something very different.

A thread to detail the latest.

economist.com/the-world-ahea…
2/20

Now before I go any further and we get get sucked into a discussion of treatments, hospitalizations and death rates, ECONOMIC POLICY is driven off cases.

So, Cases = Lockdowns. This is why cases are the most important statistic to ECONOMIC GROWTH.
3/20

Start with the US, cases have bottomed and turned higher. See the bottom panel, the 7-day average is increasing at the fastest pace in two months
Read 20 tweets
13 Nov
1/3

Puff piece out this morning extolling the virtues of Brainard and why she would make a great Fed chairman.

And don't you worry, despite here reputation as a uber-dove, she can be an inflation fighter!

bloomberg.com/news/articles/…
2/3

Someone tell the betting markets! They think Powell gets the nod and Brainard gets a consolation prize.
3/3
Biden stalling on decision is the latest ever, Joe Stiglitz wants Powell out, and we get stories about Brainard, not Powell.
This is not the narrative one would expect to see if Powell's probability of getting re-nominated was truly believed to be 75%.
project-syndicate.org/commentary/fed…
Read 4 tweets
11 Nov
1/8

Even though the cash bond market was closed today, the interest rate futures were open and had a fairly sizeable decline. Not like yesterday's sell-off, but they did continue yesterday's declines with even more losses.

Bond futures were off about 1/2 point.
2/8

Most interesting (to me, at least) was fed fund futures tanked AGAIN today.

This show the implied yields out to May 2023. Or, where the market is pricing in the funds rate out to May 2023.
3/8

Wonky chart alert ...

This chart shows the shifting of the forward curve from last Friday (red) to yesterday (orange) to today (blue).

This is a massive move for less than 1 week.
Read 8 tweets
10 Nov
1/4

I go one step further. Today is the day that "transitory" needs to stop rationalizing and start apologizing.

Inflation has gone way beyond what was expected, they can no longer be proven correct.

A thread of the market reaction today, which is big.

2/4

Massive moves in short rates. Few bother with them as they are SUPPOSED to be tied to monetary policy. But they are "unanchoring."

The US 2-year note is up 8 bps today. This is the biggest daily rise since the bond market was losing its mind in March 2020. Image
3/4

The fed fund futures curve is having a HUGE move today. Image
Read 5 tweets
2 Nov
1/12

In the last month, markets are pricing in more aggressive tightening of monetary policy across the globe, sending short rates higher. This move accelerated in the last week. Is this signaling the end of the “transitory” inflation era?

A thread to explain
2/12

The last two weeks have seen short-term interest rates around the globe shoot higher, as the following series of charts show.
3/12

This trend is most acute in Australia where it appears yield curve control is blowing up. The Reserve Bank of Australia cannot maintain its target of 0.10% (blue line).
Read 12 tweets
30 Oct
1/4

The election to watch this week is the Virginia Governor Race. Election day is Tuesday, Nov 2.

Biden won Virginia by 10 pts just a year ago.

The Democrat, Terry McAuliffe, might be staging what some political wags are calling 1 of the greatest collapses in a generation. Image
2/4

As late as a month ago, the McAuliffe had as much as a 15 pt lead over (R) Glenn Youngkin. Now, not only is that lead gone, but it might have reversed.

McAuliffe was a former Governor so he is hardly some obscure figure in Virginia politics. Youngkin has never held office. Image
3/4

Youngkin was at Carlyle for 25 years, rising to Co-CEO. He left in September 2020 to run for Governor.

We've seen numerous examples of the polls/bettors getting it wrong. So, maybe, McAuliffe wins by a bunch? We'll know in three days.
Read 5 tweets
27 Oct
1/11

The S&P 500’s outperformance over the Russell 2000 is reaching historic extremes, something that typically only happens in a bear market. Investors have redirected government stimulus money into the stock market.

A thread to explain
2/11

The next chart starts on March 15 and shows the rolling return of the S&P 500 (blue) and the Russell 2000 (orange). Since this date, the S&P 500 is up 15.26% while the Russell 2000 is down 2.72%.
3/11
So, in the last 161 trading days, the S&P 500 has outperformed the Russell 2000 by 17.98%. This is the biggest outperformance by the S&P 500 over the Russell 2000 in 20 years!
Read 11 tweets
26 Oct
1/16

The market is pricing in a far more aggressive response to inflation than economist or the Fed currently envision.

This matters are the market is major voice in setting policy. It is sending a powerful message.

A thread to explain.
2/16

The chart below shows selected fed funds futures curves since September 3 (blue).

The market is pulling rate hikes forward almost every day (curves shifting left), perhaps as a result of the higher inflation expectations in recent weeks.
3/16

The CME’s “Fed Watch” tool offers another way to view the market’s probability on Fed policy. This tool uses the fed funds futures forward curve shown above.

A probability over 50% signifies a rate hike is priced in.

cmegroup.com/trading/intere…
Read 16 tweets
23 Oct
1/6
What is the bond market signaling? And how to read it? A thread to detail.
This chart shows YTD 10-yr total return each year since 1973. Gray lines show past years’ returns, while the blue line shows this year’s returns. Through October 21, the 10-year has returned -5.60%.
2/6
Only 3 years posted worse total returns through Oct 21 – 2009 (worst), 1999, and 1994. 2021 is already one of the worst years in bond market history.

How much pain in the bond market does the transitory crowd demand before they acknowledge the market is signaling a problem?
3/6
Bond market volatility is also beginning to show signs of concern, as the next chart shows.
Read 6 tweets
23 Oct
@dandolfa
What causes this run on stablecoins that you worry about? And it seems your concern is they will exposure weakness in the current financial system, so those weaknesses must be protected, not that stablecoin growth means it should be corrected.

marketnews.com/region/north_a…
You wrote: "History shows very recently that the might get into trouble if they experience a wave of redemptions than they can't honor the dollar peg, and might feel compelled to dump a whole pile of CP on the market."

Sounds like the problem is CP, not stablecoins ...
What history are you referring to? Seem like USDT has spent most of its life NOT holding its peg (green), yet, the growth of stablecoins has not been bothered by this at all.
Read 6 tweets
20 Oct
1/4

A new wave?
2/4

New, and nearly new, highs
3/4

Showing no signs (yet?) of turning lower
Read 4 tweets
16 Oct
1/13

The supply chain is running at capacity and cannot keep up with overstimulated demand thanks to 18 mos of fiscal/mon priming.

This suggests the fix is not expanding supply, hard in the ST, but to raise prices high enough to reduce demand.

A thread to explain

@RaoulGMI
2/13

The Los Angeles and Long Beach ports collectively unload just under one million containers a month. For the last year, they have been running at/near a record pace.

In other words, they are running as fast as they can. The problem is they are at their limit. Image
3/13

The much-heralded solution is to run the ports 24/7. The problem is the Long Beach terminals are already 24/7 and the LA terminals are already running 18 hours a day. These added hours at LA are only going to increase unloadings by 2%-3%. This is not going to matter much.
Read 13 tweets