Rainbow Sprinkles

Morgan Stanley's Mike Wilson sees a worrying sign. I suppose this goes without saying by now (it certainly does for longtime readers), but intros like that one (and articles like this one) are just me parroting the cadence of a hapless journalist slavishly penning boilerplate copy. That's not me. I'm not a journalist. I've never been a journalist. I've never set foot inside a newsroom unless you count the time I begrudgingly accompanied an acquaintance to Fox's Manhattan studios, an experience

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20 thoughts on “Rainbow Sprinkles

    1. +1.

      It’s quicker than reading all the notes by oneself and, imho, does give you a sense of what’s the zeitgeist on the sell side. Is bad news good or bad this week? Are we still arguing about soft landing or has the conversation moved to “higher for longer”?

      It’s not going to affect my portfolio but might affect my hedges…

  1. The only money making opportunities I’ve gleaned from you have been when you said Meta and Bonds were oversold. I bought the bonds, I didn’t buy Meta. Both increased in value significantly after you made those calls. Articles like this just remind me of why I am a buy and hold investor.

  2. 2/3 the reason I read is H’s wit – and H talks market mechanics without trying to sell something – no disappointment here- carry on!

    1. Am an ice cream guy but not a sprinkles guy. Despite that handicap, I believe all sprinkles are the same if you just close your eyes.

  3. Just from the chart, rapid declines in the metric shown (current less expectations) don’t seem to have much relationship to the economic cycle, having occurred before recessions, after recessions, between recessions, with no obvious relationship to recessions.

    Does this metric have predictive value for consumer spending or anything else? Asking – I don’t know. I’d think MS has done the analysis, though.

    Separately, it would be interesting to see a breakout of the data by party affiliation, income, and age. I’m not sure that is available.

    1. Speaking from memory, the statistical usefulness of consumer confidence surveys when predicting consumer spending has been pretty trivial for at least 15 years. Probably longer.

      I wonder just how high the r-squared is for the ISM surveys to economic forecasting.

      Oh sorry, am I suggesting that econometric modeling is useless when it comes to the economies and markets yet again?

  4. Hopefully I will not miss the explanation of what the value is on this site. Maybe I have already. I could do with a refresher or links. I think I found some value. I did not know about Capital by Thomas Picketty and read most of it already with a plan to go over it again. I do find the summaries of the investment banker’s notes instructive. Not so much for what is said, but I think why they talk about what they do. Sort of like learning by osmosis. Thank you.

  5. You are better than an AI filter for what’s important.
    For example, I would have never come across the fact that the US is hoovering up 33% of global capital flows, compared to 18% pre-covid; that was recently headlined in Bloomberg- because I don’t read Bloomberg.
    Since I am pretty much “buy and hold”, all I am trying to do is avoid a 30-50% drawdown and/or time some sales when something has done really well (Nvidia), so I can convert to USD and buy myself something (not at Dior). 🙂

  6. I don’t mean to be insulting or dis-respectful to anyone frequenting this site, but for every graph that presents time-series data those three ??? are always implied by the graph. The question for “now” is always the same, what’s next? Or for me, so what? The reason for this conundrum is always the same and always present because no mathematical technique associated with continuous time series data can predict the single point at which the series will pivot (or, how it will continue to move in its current direction.

  7. Oh, and I come here for the smart people who hang out and know many things I don’t. I have always believed that all important decisions begin with a thorough understanding of the context in which they must be decided. Because H is one of the most capable and nuanced synthesizers of contextual data I have ever read, this site is my context central. My final decisions will always hinge on my own personal situation, as will all of those for everyone else. What I get here, in A level form, is stuff I have no access to, no knowledge of, no experience in. One of my fears is that H will get bored or tired and stop writing his columns here. His chosen work is very hard work and I, for one, cannot thank him enough for taking up this burden. I personally know of no one else who does what is done here. Oh, and I’m sorry to ask but what or who is “One Bank?”

  8. hmmm…it looks to me that at points where this is at an extreme….the following months are robust growth and mkt returns. its when theyre really confident one needs to ‘cock the brow’

  9. H- I agree with Mr. Lucky that one of my main “left tail” risks, is that you get bored with this “thing” you are doing here on The Heisenberg Report.
    Since I started reading your posts, I no longer watch any TV news, I have significantly reduced the amount of time that I spend scrolling for/seeking out news and I have reduced my paid news and investment sources to WSJ and NYT- although, I no longer even read these every day.
    I have never trusted a person that I have never met with more. I completely trust your decisions about what to talk/write about and what not to talk/write about.
    Crazy but fun 🙂

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