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Bonds And Stocks In Dr. Bessent’s ‘Detox’ Clinic
Long bonds or stocks?
If you asked that question following the election in November, most PMs probably would've insisted stocks were the better bet, particularly if you specified that bonds meant 30-year Treasurys.
After all, Donald Trump loves to boast about rising stock prices when he's president, and his fiscal program was generally viewed as bond unfriendly, just ask the term premium, which widened sharply in the weeks leading up to the vote. Well, guess what?
As the figure shows, the U
Bros and billionaires, .
Spit in a shot glass. .
20% hit .
Working man, . Blood sweat and tears, .
Crying in their beers. . Hope things work much better, .
Than any fancy plans. . working man, . elected the big man’s plan. .
Username checks out.
Is Bessent’s hedge fund still operating?
I just finished reading the WSJ article describing how multi-billion dollar hedge funds that are managed by multiple independent managers (within one fund) could be contributing to increased volatility.
Evidently, individual managers face a significant deallocation of assets under management if their losses hit 5% and are “shown the door” when losses hit 7.5%.
It is easy to see how this structure could create a situation where individual managers are motivated to sell stocks in order to avoid losing their jobs vs. selling stocks due to true concern over stock market performance.
Yeah (and usually -5% costs your job) but they derisk very very quickly – days not weeks – and I have to think their selling is done.
Wall Street types like Hartnett that are disingenuous (to be modest) about Trump and Musk are doubly frustrating versus the folks that truly may not know better. I had to stop listening to a macro podcast that I liked for the same reason. The host was prone to occasional quasi-conspiracy theory and was stuck in the oil patch in his thinking, but generally was the second best place that I learned from (H being the first, best place ever!). But now….. I can’t even listen to it.
Anyone have some favorite macro and/or market mechanics podcasts that they like?
Odd Lots is a good podcast. Pretty wide-ranging though.
The poor will not increase their savings rate because they don’t have the money to do so. And across the population, with govt job cuts and a recession, less money will be earned. I don’t see how the savings rate will increase, unless I don’t understand how it’s measured. Also, how does the expected jump in inflation discussed yesterday, with the prospect of Fed rate increases. Is it a bull flattener when short term rates increase to meet long term rates?
Meant to say “how does the expected jump in inflation discussed yesterday, with the prospect for Fed rate increases, fit with the “lower rate” narrative discussed here?”
Another spot-on observation. I wonder why Wilson/Hadtnett/other Wall Street strategists are so deliberately credulous; currying favor like certain owners of mega-cap tech?