Tag Archives: 5.) Alhambra Investments

If we are going to see negative nominal Treasury rates, what would guide yields toward such a plunge? It seems like a recession is the ticket, the only way would have to be a major economic downturn. Since we’ve already experienced one in 2020, a big one no less, and are already on our way back up to recovery (some say), then have we seen the lows in rates? Not for nothing, every couple years when we do those (record low yields) that’s what “they” always say and yet...

Japan’s yen is backward, at least so far as its trading direction may be concerned. This is all the more confusing especially over the past few months when this rising yen has actually been aiding the dollar crash narrative while in reality moving the opposite way from how the dollar system would be behaving if it was really happening. A dollar crash, or even just a true reflationary dollar drop, would be JPY negative (like 2017). Ever since the last one, during...

Many of the weak dollar trends I noted in June’s update have moderated – even as the dollar has weakened further. US stocks surged over the last month, with growth indices leaving their value counterparts in the dust…again. About the only exception on the equity side was China, which outperformed for much the same reason as US growth – technology stocks. Generally, we expect foreign stocks to outperform in a weak dollar environment but so far any outperformance has...

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Since the unnecessary destruction brought about by GFC2 in March 2020, there have been two detectable, short run trendline upward moves in nominal Treasury yields. Both were predictably classified across the entire financial media as the guaranteed first steps toward the “inevitable” BOND ROUT!!!! Each has been characterized as the handywork of master monetary tactician Jay Powell. There is some truth underlying, only stripped of all that hyperbole. These backups in...

As the calendar turned to September, the US Centers for Disease Control and Prevention (CDC) issued new guidelines expanding and extending existing moratoriums previously put in place to stop evictions during the pandemic. Families affected by COVID either through the disease or as a result of job loss due to the coronavirus have been protected from landowner actions including eviction as a final means to reclaim rental properties from non-conforming tenants. There...

Unlike some sentiment indicators, the ISM Non-manufacturing, in particular, actual trade in goods continued to contract in May 2020. Both exports and imports fell further, though the rate of descent has improved. In fact, that’s all the other, more subdued PMI’s like Markit’s have been suggesting. Getting closer to a bottom. Unlike any of the sentiment numbers, however, these trade figures better demonstrate just how far from a rebound let alone recovery the world...

Most Long-Term Trends Have Not Changed A lot has changed over the last 4 months since the COVID virus started to impact the global economy. Asia was infected first with China at ground zero. Their economy succumbed first with a large part of the country shut down to a degree that can only be accomplished in an authoritarian regime. The rest of Asia responded to the initial outbreak better than the Chinese (and most everywhere else we now know) and generally mitigated...

Jay Powell’s 2018 case for his economic “boom”, the one which was presumably behind his hawkish aggression, rested largely upon the unemployment rate alone. A curiously thin roster for a period of purported economic acceleration, one of the few sets joining that particular headline statistic in its optimism resides in the lower tiers of all statistics. The sentiment contained within the ISM’s PMI’s were at least in the same area as the unemployment rate, and...

What a difference a month makes. The euphoria clearly fading even as the positive numbers grow bigger still. The era of gigantic pluses is only reaching its prime, which might seem a touch pessimistic given the context. In terms of employment and the labor market, reaction to the Current Employment Situation (CES) report seems to indicate widespread recognition of this situation. And that means how there are actually two labor markets at the moment. Occupying the...