David Stockman Unveils The ‘Watchword For 2018’: ‘UNHINGED!’

“That refers to Wall Street, Washington, the Dems and the GOP, and all the far and near corners of the planet which are implicated in their collective follies.”

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Nobody Panic.

Your refund will be escaping this death trap with your life…

Debt Ceiling: Here’s The Nightmare Scenario

Ok, I don’t know how much figurative “stock” you put in Mitch McConnell’s Monday promise that there is “zero chance” of  Congress not raising the debt ceiling by late September, but it’s at least plausible to suggest that however vacuous, the Senate Majority Leader’s comment helped buoy risk assets (i.e. literal stocks) on Tuesday. Taken together with…

Epic: One Strategist Explains Why This Market Is Like Wile E. Coyote

“A coyote walks floating in the air above the precipice, and it falls only after it looks down and becomes aware of how it has no support beneath its feet – as if it has momentarily forgotten the natural laws its body has to obey, and has to be reminded of them.”

Trader: Shut That Lyin’ Mouth And “Get ‘Em While They’re Hot”

“Too many commentators have fallen into the “everything is binary” trap and decided that if you assume each event will end badly, there’s material to turn out a good rant”

“Hope Versus Reality”: Goldman Illustrates The Trump Trade Fade

“This week the market struggled to readjust its expectations for US government policy following the move away from health care reform. Client conversations make clear that investors fall into two camps: The first group worries that the failure to “repeal and replace” the Affordable Care Act is a sign that other items on the policy agenda are less likely to be enacted than they had hoped. Others are encouraged about the shift in focus to tax reform as the new top priority for the administration.”

Chart Check (Theory Vs. Reality)

For the history buffs…

An Inflationary Catch-22

The perpetual thorn in policymakers’ side during the post-crisis era has been inflation or, more appropriately, a lack thereof. No matter what central banks have tried, the deflationary impulse has proven to be remarkably stubborn and paradoxically, QE might well have contributed by preventing creative destruction from purging excess capacity. Japan’s struggle has been particularly amusing…

“Loads Of Emotions And Lots To Ponder”

I’m inclined to believe that those of us who fancy ourselves black swan watchers are in a better position than usual heading into 2017. We are a skeptical bunch by nature but our inclination to be cautious when others are calm stems not from some ingrained cynicism, but rather from our belief that the illusion of equilibrium…

Excuse Me, But Your Tails Are Getting Fatter

I talk quite a bit about tail risk. One of the biggest mistakes an investor can make is to assume that financial markets follow a Gaussian (i.e. normal) distribution. Put simply, the data does not support that contention. Indeed, the idea that there is something called “normal” when it comes to markets is to assume that…

Breaking Down Policy Shift By Country

One of the themes at the forefront of everyone’s mind (well, at the forefront but still behind “make America great again,” of course) is the passing of the baton from monetary to fiscal policy. There’s a growing chorus of observers out there who think it may be time to start unwinding the global monetary gravy…