Archive | March, 2017

Stock/Bond Ratio Back at 2007 Peak

Pic1

As 1Q17 finishes with a gain in the books, the stock to bond performance ratio has also broken to a new cycle high, elevating to levels not seen since mid-2007. Our measure of the stock to bond ratio measures the total return of the S&P 500 relative to that of the JPM 10 year treasury total […]

If Trump Gets Taxes and Infrastructure, Who Pays, and What Does it Mean for Stocks?

Pic1

With the dissolution of health care legislation barely final, murmurers out of Washington seem to suggest tax reform/cuts and infrastructure may be tackled in tandem in a way that attracts bipartisan support. If it comes to pass, it would go a long way in meeting the market’s expectations for pro-growth policies from the new administration. But […]

Which is it: .9% or 2.8%, and Does it Even Matter?

Pic1

As the first quarter nears its end there is some debate as to where Q1 GDP growth will come in. As recently as yesterday the Atlanta Fed GDPNow estimate had GDP growth of .9% and this morning the NY Fed’s Nowcast is expecting 2.8%. Highlighting the disparity, the upper bound of the Atlanta Fed’s GDPNow […]

Is the Snap Back in Rates Really that Surprising?

The post-Fed action in the bond market yesterday was impressive, yet left some begging for answers. If the Fed raised short rates yesterday and reiterated its plans for the subsequent five rate increases through 2018, shouldn’t the long-end be selling off? If it were only that easy. The bond market has several headwinds that are […]

Q&A with Peter Zeihan, Part 2: Three New Wars

Absent Superpower

We recently met with geopolitical strategist Peter Zeihan to discuss world events since the American election and his new book, “The Absent Superpower: The Shale Revolution and a World without America.” In the book, Peter credits energy and resource innovations with reshaping the global geopolitical environment. We covered so much ground in our visit with […]

Hot Air Balloon Economy

1

The interplay between debt and income can be a difficult thing to understand. Here is a useful analogy. Imagine a hot air balloon lying on the ground preparing for take-off. The fuel tank, used to heat the air, is the balance sheet in this analogy while the loft of the balloon is the income statement. […]

A Massive Liquidity Illusion

1

Since the election we’ve heard the rally in stocks characterized as a “Trump Trade” or a “reflation” trade. We think there is a really important element missing from this analysis that could change very quickly over the next several weeks. On March 16, 2017 (the day after the Federal Reserve is expected to raise interest […]

Putting the Snap IPO into Historical Context

Pic1

The Snap IPO has garnered a fair amount of coverage over the last two days so we thought we’d put some data behind the phenomenon. The most striking thing about the Snap IPO is clearly the valuation. Snap doesn’t have any earnings, but it does have a modicum of sales. After two days of trading […]