The Bull Case Is Ambiguity
"The bull case is ambiguity," one popular strategist said this week.
I like that characterization of the current macro conjuncture.
It may no longer be the case that the risks are "skewed to the downside." Indeed, you could plausibly claim the risks are now "more balanced," as policymakers are fond of putting it. But really, nobody knows. The macro narrative is just one giant tautology: We can't know what we don't know. Not about frictions in the US labor market, not about how long inflation w
My go-to adjective for the process of how we fund our national budget with self borrowing-and then pay for that privilege- is……“ludicrous”!
It does seem to me that the US is well suited to grow ourselves out of this imbalance with some “intelligent immigration”. Our country should be able to dig deep, remember our roots (immigration) and get on with it.
I have some completely awesome first generation immigrants in my life, via my kids. Out of 8B people in the world, we should be able to find a 50M or so, that we can welcome and even provide a path for citizenship. Immigrants are fantastic at opening a little entrepreneurial business.
My two cents.
There is a lot of uncertainty and distraction. Inflation!? Bond yields?! Stimulus?! Covid?! Crypto?! Memes?! What does it all mean? What will the next data point bring? What is going on?
Step back and look at the big picture:
– Cyclical sectors rolling: energy, materials, heavy industrials.
– Secular sectors turning up: tech, discretionary, healthcare.
– Small caps rolling.
– Large caps turning up.
– Yield curve de-steepening.
– Value rolling.
– Growth turning up.
This is how markets act when the economic cycle is transitioning from early-cycle to mid-cycle.
Sure, each phase of an economic cycle used to take years rather than months. But we live in a speeded up world, I guess. Maybe trillions of dollars in stimulus acts like NOX in a “The Fast And The Furious” hotrod.