The recent CPI report showed inflation a bit higher than projected. Data is (stupidly) rounded. This rounding resulted in rounding up, rather than rounding down. Just a suggestion, but month over month values that are typically in the 0.1 to 0.4 range shouldn’t be rounded to one decimal place.
Good stuff. I have been putting limit orders in at stink bids hoping to catch brief periods of illiquidity and a forced seller due using too much leverage. Locking in 7-10% yields at distress prices while the underlying businesses / cash flow is fine makes me pretty happy. We will eventually hit the other side of the rate cycle (cuts), which will bump up the share prices as everyone chases yields again.
Be the liquidity when the over leveraged get deleveraged.
"Monetary policy (buying bonds) causes inflation in financial assets (bonds and stocks).
Fiscal policy (which is mainly deficit spending) causes inflation in consumer goods and services."
Clearly and simply stated. Very helpful that way.
I wonder if this is extensible to a cross-causation, ie, when monetary policy is dominant it causes disinflation (or relative disinflation) in consumer G&S, and when fiscal policy is dominant it causes disinflation (or relative disinflation) in financial assets. Never thought about this before & the answer is not clear to me. Any thoughts?
Too many dollars chasing few goods and services. Money supply has increased
way beyond growth in the economy.
Good stuff. I have been putting limit orders in at stink bids hoping to catch brief periods of illiquidity and a forced seller due using too much leverage. Locking in 7-10% yields at distress prices while the underlying businesses / cash flow is fine makes me pretty happy. We will eventually hit the other side of the rate cycle (cuts), which will bump up the share prices as everyone chases yields again.
Be the liquidity when the over leveraged get deleveraged.
"Monetary policy (buying bonds) causes inflation in financial assets (bonds and stocks).
Fiscal policy (which is mainly deficit spending) causes inflation in consumer goods and services."
Clearly and simply stated. Very helpful that way.
I wonder if this is extensible to a cross-causation, ie, when monetary policy is dominant it causes disinflation (or relative disinflation) in consumer G&S, and when fiscal policy is dominant it causes disinflation (or relative disinflation) in financial assets. Never thought about this before & the answer is not clear to me. Any thoughts?