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Weekly Market Pulse: Surprises

By |2024-01-29T07:30:39-05:00January 28th, 2024|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Newsletter, Real Estate, Stocks, Taxes/Fiscal Policy|

We got the latest report on economic growth last week and it surprised most everyone. Real GDP expanded by an annualized 3.3% in the fourth quarter, well above the consensus estimate of 2%. Nominal GDP expanded an annualized 4.8% quarter to quarter and 5.8% year-over-year. The annualized quarter-to-quarter change is exactly the average annual change since 1990. Real GDP grew [...]

Macro: Incomes and Consumption Expenditures — a good report — be careful what you wish for

By |2023-12-01T09:23:49-05:00November 30th, 2023|Markets|

This was a very positive report. The consumer is showing no signs of pulling back or needing to pull back in the near term, buoying GDP and GDP expectations. Interest rates float higher on the news. A quick comment on market dynamics and reactions to releases such as this one. First, everything is relative to expectations. And for a report [...]

Macro: Personal Income and Outlays

By |2023-10-28T18:45:57-04:00October 28th, 2023|Economy|

The growth rate of income and consumption are at healthy levels. But there are some aspects of the growth I'd like to point out. Though we have healthy rates of growth, the concern is that both incomes and consumption are slowing. I know we had excess savings from government transfers to the private sector. But we also had excess spending [...]

Weekly Market Pulse: Wrong Again

By |2023-09-05T06:54:24-04:00September 4th, 2023|Alhambra Portfolios, Alhambra Research, Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Real Estate, Stocks|

There were some very smart people a year ago saying that you couldn't kill inflation without a big rise in unemployment. Last October, Larry Summers - former Treasury Secretary and President of Harvard - said we'd need a recession and an unemployment rate of 6% to kill inflation. In the summer of last year, he said we'd need 5 years [...]

Some ‘Core’ ‘Inflation’ Difference(s)

By |2022-04-29T19:33:52-04:00April 29th, 2022|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The FOMC meets next week, with everyone everywhere expecting a 50 bps rate hike to be announced on Wednesday. Yesterday’s “unexpected” and “shocking” negative GDP is unlikely to deter anyone on the committee. Most have already dismissed it as nothing more than quirky, temporary factors, not unlike when they did the same to Q1 2014’s similarly negative result. At least [...]

The Short, Sweet Income Case For Ugly Inversion(s), Too

By |2022-04-01T19:21:53-04:00April 1st, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

A nod to just how backward and upside down the world is now. The economic data everyone is made to pay attention to, payrolls, that one is, in my view, irrelevant. As is the consumer price estimates from earlier this week, the PCE Deflator. That’s another one which receives vast amounts of interest even though it is already old news.Yet, [...]

These Are The Charts/Data The Fed Is Ignoring In Its Rush To Mistake Rates

By |2022-02-25T17:25:48-05:00February 25th, 2022|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The labor theory of inflation, the one the FOMC will use to justify rate hikes in 2022 (as far as they might go), isn’t just wages and competition for the presumed scarce marginal worker. While a tight labor market might drive up the marginal cost for labor inputs, in order for companies to then pass those higher costs back to [...]

All The Curves, From Supply To Demand To Yield

By |2022-01-28T17:52:25-05:00January 28th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Technically speaking, the rebound from the 2020 recession wasn’t strictly a supply shock. That was a huge part of it, no doubt, but a near-concurrent demand shock, if you will, also materialized. The combination of the two left the public bewildered, believing it an actual inflationary impasse which could only be further passed on into this year.Consumer prices did rise, [...]

White-Hot Cycles of Silence

By |2021-12-27T18:46:15-05:00December 27th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

We’re only ever given the two options: the economy is either in recession, or it isn’t. And if “not”, then we’re led to believe it must be in recovery if not outright booming already. These are what Economics says is the business cycle. A full absence of unit roots. No gray areas to explore the sudden arrival of only deeply [...]

Camp Sour or Soar: Inflation (global) and Spending

By |2021-11-29T17:30:15-05:00November 29th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s always a balance of probabilities tug-of-war. Markets (not stocks) are continuously trying to discern risk since everything is really converted to some kind of risk-adjusted basis. And if the perceived weight of those tilts downward thinking forward, then it may not matter much or at all what’s going on right now.What’s going on right now is, according to everyone, [...]

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