Tag Archives: 5.) Alhambra Investments

Another economic discussion lost to the eventual coronavirus pandemic mania was the 2019 globally synchronized downturn. Not just downturn, outright recession in key parts from around the world, maybe including the US. We’ll simply never know for sure because just when it was happening COVID struck and then governments overrode everything including unfolding history. What anyone can say for sure is that 2019 hit a rough patch where there was only supposed to have...

Stocks had a rip snorter of a rally last week and a lot of people are pondering the question in the title over this long weekend. The S&P 500 was down 20.9% from intraday high (4818.62, January 4th) to intraday low (3810.32, May 20th). From that intraday low the market has risen 9.1% in just six trading days. That still leaves the market 13.7% from the intraday high and most investors still down double digits on the year (-11.5% for the standard 60/40 portfolio)....

If it continues to play out the same way, it would be all the worst scenarios lumped together all at the same time. A real unfortunate convergence, yet one that has been entirely predictable. Consumers reaching their absolute spending limits. Warehouse and storage capacity nationwide dwindling to long-time lows, leaving firms no options to store inbound goods. And, of course, the stream of goods into inventory that shows no signs (yet) of letting up. Taking the last...

What would “unconscionably excessive” even look, legally speaking? More to the issue, who gets to decide what constitutes “excessive?” The way the phrase has been inserted, it’s as if Congress today seeks to plant its members on some incorporeal higher plane than mere physical substance, too, diving deep into the moral consciousness of the nation and economy in order justify taking general action. Just last week, the House of Representatives passed a bill which...

Shipping container rates have been dropping since early March – right around the time when we had just experienced our “collateral days” and then stood by to witness chaotic financial fireworks, inversions, the whole thing. The bane of the logistical supply-side snafu-ing, it has been container redistribution mucking the goods economy up.The recent and sharp decline in container rates, according to Freightos, is because China’s been closed down by Xi’s pursuit of...

The stock market hasn’t been moneyed; well, US equities, anyway. What do I mean by “moneyed?” Common perceptions (myth) link the Federal Reserve’s so-called money printing (bank reserves) with share prices. Everyone still thinks there’s a direct monetary injection in this case by the central monetary agency which causes stocks to rise for no good reason. While we don’t have to argue the Fed’s bank reserves here, the truth of the matter is stocks have been severed...

This one took some real, well, talent. It was late morning on April 11, the crude oil market was in some distress. The price was falling faster, already down sharply over just the preceding two weeks. Going from $115 per barrel to suddenly less than $95, there was some real fear there. But what really caught my attention was the flattening WTI futures curve. Up in the liquid front, it was closing in on contango and had it achieved that reshaping it would have been,...

TANSTAAFL is an acronym for “There ain’t no such thing as a free lunch”. It has been around a long time – Rudyard Kipling used it in an essay in 1891 – but it was popularized by Robert Heinlein’s 1966 book, “The Moon is a Harsh Mistress”. In economics it most often refers to tradeoffs or opportunity costs; resources are scarce and if you choose to use them in one way they aren’t available for an alternate use. The other way the phrase is often used is to describe a...

For once, I find myself in agreement with a mainstream article published over at Bloomberg. Notable Fed supporters without fail, this one maybe represents a change in tone. Perhaps the cheerleaders are feeling the heat and are seeking Jay Powell’s exit for him? Whatever the case, there’s truth to what’s written if only because interest rates haven’t been rising based on rising inflation/growth expectations. Quite the contrary, actually. It’s all FOMC and the...

It isn’t just the vast difference between Chinese consumer prices and those in the US or Europe, China’s CPI has been categorically distinct from China’s PPI, too. That distance hints at the real problem which the whole is just now beginning to confront, having been lulled into an inflationary illusion made up from all these things. To start with, yesterday China’s NBS reported the index for its consumer prices rose 2.1% year-over-year in April 2022. That’s up from...