I am the one who knocks

Category archive



Where Are We In The Cycle?

Economists these days are increasingly sure they can “smooth out” the business cycle rather than just forestall the inevitable. They are wrong. And they’ve been proven so time and again. “Smoothing out the business cycle” just means destroying creative destruction thus not allowing the system to purge itself of misallocated capital thereby leading to even… Keep Reading


This Is What Happens To Stocks In A “VaR” Shock

We’ve talked here and elsewhere about the effect a rise in rates would have for bond investors who have continually frontrun the perpetual central bank bid. Now, the market is beginning to get a bit jumpy as UST yields rise on fears that Japan will move next week to steepen the curve. Well, thanks to Citi… Keep Reading


Hedge Problem: US Bonds Aren’t As Attractive As They Seem

One of the reasons Main Street got blindsided in 2008 was Wall Street’s penchant for obfuscation. When you, as a retail investor, hear something like “collateralized debt obligation,” you have a very understandable tendency to tune out. It’s like Stephen Colbert once famously said: “You’re-a-bore is what someone says when you mention EURIBOR.” But the thing… Keep Reading

Debt/IG/Investment Grade

What NIRP Hath Wrought

The relentless hunt for yield continues unabated and it can’t even be hedged anymore when it comes to US government paper thanks to a worsening dollar crunch. So what is one to do? Well, dive into USD corporate paper of course: From Wells: “Alongside this rapid expansion of the corporate market, the investor base has… Keep Reading


Demographic Debacle

There are major concerns across markets about demographics. Not the least of which emanate from Japan. But do you know how you “correct” the problem? Well by expanding credit of course. From Citi’s Matt King:   Debt folks. Debt. That’s the solution to everything. But what happens to that dynamic when lenders are getting negative… Keep Reading

Go to Top