• Mar, 2023
  • Mar 19, 2023

  • "Where are your deposits?" That's a new thing.

    3b for CreditSuise. They raised 4b recently, and now it's worth 3. Said to have been worth 10b. "If we get a look behind at the balance sheets, are the losses more concerning. If all banks are selling bonds, the cost will be lower that they're making.

    Deposit flight, if unchecked, creates forced sellers.
    If not sold, their other option was nationalization (or winding down the bank).

  • Mar, 2023
  • Mar 17, 2023
  • Big Tech also rose on market down days. The tech sector rose like 10% over the week.

    It's considered to be people who have large stock holdings moving out of other things.

  • Past phase was people buying dividend-paying stocks. And that's still the case.
  • Grey Swan

    Industrial policies, aquifer depletion, mineral insecurity.

  • During the past week of days when the market was bearish, bitcoin has risen significantly, like gold and treasuries, as a 'safety' move.

    25% of American adults own Bitcoin according to some sources.

  • Bank stop. All the US banks put in millions/billions to help FRC (which also borrowed from the Fed with the Fed's new borrowing thing).

    To keep confidence in banks.

    Switzerland said it would help CreditSuisse.

    Both stocks bounced back after these news, but afterwards lowered.

    Switzerland, does it really have enough money to really help. "Too big to succeed" bank there.
  • "It is systemic. The Fed has forced many of these banks to reconfigure their portfolios so as ... they are having duration risk." - Art Cashin

    "A failure of supervision rather than regulation." "The regulation was there."

    "Earnings have come down around 11%." - Chris Toomey

    "We're realizing that all of that activity that the Fed has put in in such a quick fashion is really creating breakage in the system." Fist the banks (which handle money) and then other things in the economy. Especially businesses that really shouldn't be operating at this level where the costs of funds is higher. Values down or out of business.
    He said that he was looking for 3600 (real pain in the market) before he starts putting money to work, rather than any other news that could happen.
  • Mar, 2023
  • Mar 15, 2023
  • '2023 banking crisis' massively disinflationary?

    Lots saying that. Some even that the Fed won't have to raise rates as much because this will do it for them.

    Gundlach thinks maybe disinflationary in the near-term. But the response maybe instant backstopping with more pressure on regional banks so more inflation.

  • Now that interest rates are much higher (than past 40% of only declining rates everyone is used to), maybe it's going to be much more difficult for bonds to be rolled over at higher interest rates levels. - Gundlach

    Has a high yield bond ever really matured? Aren't they all just default or refinanced? because there's stable and step function of  interest rates and so companies over and over again got the ability to refinance, but they can't refinance now. ... We should probably be worried about TripleC bank loans (lowest tiers of debt) (6 or 8 to 10 or 12 percent).
  • [Powell] needs the banks to raise their rates on consumer loans but not have to deal with the FED hike so they can make the profit off consumers to pay back the bailout.

    They don’t even hide it anymore. - Random guy

  • Yield Curve Steepeners

    One macroeconomic scenario in which using a curve steepener trade could be beneficial would be if the Fed decides to significantly lower the interest rate, which could weaken the U.S. dollar and cause foreign central banks to stop buying the longer-term Treasury. This decrease in demand for the longer-term Treasury should cause its price to fall, causing its yield to increase.

  • (Even) Tom Lee 'can't' be as positive as he has been previously. They sent out a note saying there'd be ripple effects from SVB.

    After years of complete bullish comments, past few months he's been a bit more reserved but still voicing that it would be bullish afterall, but this is the first time I've heard him say something bearish.
    "The cost of money for banks is going up so it's going to drive a necessary contraction of credit.

    Founders (many) are now nervous where they bank. But also some regulators have been advising banks to pull back their lending to Fintech startups. "So I think there's going to be job losses."

    "I think it's wrong to be bullish short term." Because although the market is down, no one wants to step in and say they want to buy.

  • House buyers and sellers seem to be comfortable with mortgage rates between 6 and 6.5% - Rossell

    Above, activity stops. Back there, activity picks up. So that might be the longterm rate.

    Demographic factor. Those mellenials tha had put off homebuying are now in their 30s, and will have to accept higher rates. Demographics will overpower anything else going on.

    Debt servicing. The group that is defaulting most is GenXers (young people).

    Still $2t in excess savings sitting around in bank accounts.

    An individual will pay their mortgage and their car payment, but cut everything else. Government service workers will be sent home. This will reduce consumer sentiment. People will stop spending money (people are currently spending just fine). Market and economy will decline, and everyone invested in those things will feel a lot poorer.

    Creditors around the world will demand higher interest rates to hold our debt because they will trust us less.

    What's ridiculous is that it's not that we can't pay. It's that we're unwilling to. (Contrast with Argentina who defaults because literally they can't pay.)

  • 3 to 4% inflation before they can ease on rates - Marci Rossell
  • El-Erian and other usually-critical/negative commenters have been listened to but ignored in part, in recent years. Is it because they didn't resonate with the optics of the market? Whereas in a bear market, they will be listened to like before but also their takes will resonate?
  • Yield curve steepeners
  • Governments print too much money whenever the pain gets too great. - Michael Novogratz

    Probably European banks will do the same thing (for banks like Credit Suisse) as US (for SVB). - Bookvar

    Powell was just 2 weeks ago talking about having to raise rates to 6%. Now it's Oops.

    The Fed hikes rates until something breaks, and last Friday something broke, and now we're seeing lots of things break.

    Banks stress testing themselves and saying It's OK we're stress testing, is truly laughable. - Sen. Warren

    There are all these risks embedded in the balance sheets (of banks). - Amy

    The deposits are safe, and the the banks have a wide-open window at the Fed where they can get liquidity. - El-Erian

    FFed credibility is really at stake here (so they should separate the 2 issues and continue with 25points). "If you comingle these two things too much you will end up in the muddle middle. - El-Erian

    Financial sector capture of monetary policy over the past few years.

    Now all of us have to pay through lower bank interest and more difficult loan conditions for ... dumb CFOs. - Zeihan

    The damage has already been done by decades of mistaken monetary policy on the monetary and fiscal. - Roubini
    Interest payments of $10t on the debt we hold because of higher rates. - FoxNews anchor

    When inflation is rising, stocks and bonds both lose money. When inflation is low, stocks and bonds make or lose money inversely. - Roubini

  • Are some of these banks going to have to go out and start raising equity?
    How do banks rebuild capital? They lend less.

  • Compared with SVB, CHF would have a systemic effect because it has like $700m (SVB had like $150m) and is significant for Europe and also global.

    Does Switzerland have enough money to bail out CHF though, even it if is TooBigToFail?

    UBS was down like 8% compared to CHF's 20%.
  • Mar, 2023
  • Mar 14, 2023

  • Interest rates 0 to 4.50 in 12 months

    Banks might turn into utilities. Utilities have to get permission from the state (they present to the municipality every couple years) they operate in to raise rates ("a rate case").

  • Next after the bank thing might be commercial real estate (and banks that are heavily invested in it)

    ... also to watch for non-performing loans (which currently aren't showing concern).

    Credit risks. As credit conditions tighten (which probably). And banks focused on that.
  • Mar, 2023
  • Mar 13, 2023
  • How to value banks (which could currently be on sale)

    Start with tangible book value, then make adjustments for unrealized losses that are in securities portfolios. The available forSale losses are already included.

    However, with banks, headwinds include that access to capital will be constrained. There won't be capital raises for a while.

    Loan portfolio reset as we go forward. With higher interest rates and Fed tightening.

    Marinac said the flight to BigBanks won't last forever. The main lending is still mid to medium sized banks.

  • If all the deposits go either to BigBanks or Off Balance Sheet (they sit in Treasuries and things like insured cash sweep), what then happens to the cost of funds? How do you lend without charging exorbitant fees?
  • SVB banked 50% of the startups in the US and lots in the world.

    So not having them any more as a capital provider. (JPM is not doing early stage VC.) So many companies relied on SVB not just to do their servicing, but to provide them non-dilutive financing when they needed it in the early days. What happens with this gap (other banks aren't doing this early stage debt).

    SBV was the beacon from a financial perspective of providing them the financing they needed.
    You still need somebody who can fund this market.
  • What does that mean for the American economy in terms of our dynamism and willingness to loan and take chances.

    What does this mean for the future of innovation and VC funding? Who's writing checks right now?

  • 2-day collapse and gov stepped in with emergency measures to stop a broader failure.

    We haven't seen a bank collapse so fast in years (2008 yes). Although lots of bank collapses in US history, these are different things.

  • "A giant bailout." - Aaron Klein

    He hoped they would sell the assets of the bank and not resort to providing unlimited deposit insurance.

    Some market risk and have some banks bear some risk.

    SFB had 97% uninsured deposits. Whose biggest account seems to have been a $3b account with a cryptocurrency. And a bank where all the insured depositors had already been taken care of. "We're risking a fundamental structural change to our regulatory system, in a situation where you had a bank completely under the nose of the SF Fed. Where was the supervision?" It grew massively over a couple years and and blew up a giant unhedged interest rate risk tied to Fanny, Freddy and US Treasuries. "That should be red flag red flag red flag for regulators," said Rajan.

    But what should have been done differently? Like many banks, it received tons of stimulus deposits, and short term bonds wouldn't have made any money, and it chose long term bonds. The Search For Yield problem when the Fed pumps the system full of liquidity while having rates so low banks don't make any money, so they end up taking more risk.

    "I cannot believe the pres dared to say well we just need more regulation. I thought they already did that. " - Bahnsen
    The Fed continuing to pump in liquidity past where they needed to is the real issue, said Bahnsen, which led to crypto and silly IPOs and SPACs, that's how that deposit base came up. And then they overtightened and destroyed value on the way down.

  • Just forced gifts of equal value?

  • Lending to VCs to change. More equity-like, less loan-like.
  • Was there shorting?
  • SVB had historically called for less banking regulation (which perhaps was the reason this happened), special tax treatment in the form of carried interest

  • "My sense is that all these regional banks are still here on Friday but they're half as big as they were." - Liz Hoffman

    And they're going to replace this incredibly cheap deposit funding with prevailing Fed funds rate at the new facility, which means their margins just collapsed. So none of these stocks are going to trade at remotely what they've traded at for the last couple of years.

    The business model's not the same. Their loans will cost a lot more (but have been massively below market for a long time.)

    Why would you have your money at a small bank when there's even a remote risk of this happening again?

    Big banks' competitive advantage is that people think they WILL be there long term. Now they may lose that security to small banks.
  • The reason SVB caused such huge impact was social media, some commented
  • A preferable solution (to guaranteeing deposits for all the US) would have been a private solution (someone buying SVB), said Altman.

    But that would depend on the government would enter a deal where they would provide certain loss protections to a buyer. The gov wasn't willing to do this, possibly because of the politics. Bear Sterns / JPM et al 2008 were very unpopular, and for this reason they might not have been willing to do a similar thing here.
  • "Here's a banking institution which most Americans never heard of, which was not designated as systemically important, and over a 72-hour period, it threatens the entire financial system and financial market stability." - Roger Altman

    "And the banking regulators decide to guarantee the deposit base of the entire US financial system, which is certainly what they just did." (Will this lead to less disciplined management? Will there eventually be pressure to limit shareholder returns, if you're guaranteeing the key liability of these institutions? If the taxpayer is paying to guarantee the key liability, will the taxpayer ally the shareholder to realize the benefit of that?)
    "Testimony to the fragility of finance in the global digital era when individuals and institutions can move money in seconds. It's testimony to out-of-date regulation. ... This institution wasn't subject to stress tests and the tighter capital ratio, liquidity and leverage strictures which the biggest banks were subject to. It's testimony to out-of-date deposit insurance.
  • "Until people see they have an asset that's worth 100% of the dollar."
    "Find a level that's comfortable."

    "Some humility in Tech."
  • Bank stocks (and all stocks with them) down

    There's stress on the banking system, and that should be shown through equity valuations.

  • US banking regulators easing of terms around the discount window, through a special new bank term facility

    "The Fed is willing to take as collateral the good, relatively riskless assets that banks hold and provide liquidity should give everyone comfort" - Roger Ferguson

    "It really does say the Fed is ready to give liquidity to banks that are in good shape, and that, I think I hope, is sufficient to give the kind of confidence called for."
  • Treasury bonds dropped in value

    Viewed as a flight to quality.

    Good for banks usually.
  • After SVB,

    Will the smaller banks need capital raises? If they do, you have to be careful buying any of the regionals, said Cramer.

    JPM and bigger banks, well capitalized, will be fine, and may be the beneficiaries.

    Some banks don't have sticky deposits, and it will be hard for them to keep deposits.
  • Mar, 2023
  • Mar 12, 2023

  • 60% of Americans prefer Costco and Walmart "non-traditional stores". Staple items on sales, upping rewards on loyalty programs.

    Kroger stepping up specialty which is fresh produce, building brand loyalty.

    Store brands mean 10% less.

    1 in 5 shop for groceries at Dollar chain stores. They want you to see that they have the exact same quality as a name brand. Often you'll see a comparison (products beside each other), with two big stickers next to each other.

    Partnering with Insta-cart.

    You can save if you do research before going shopping. Also you can track what food you have in your house and what's running low with apps.
  • Mar, 2023
  • Mar 08, 2023
  • Vol low because correlation is lower than years previous - Wu Silverman

    80% of gains were attributed to like 7 stocks before, she said. They would all go up (or down) together.

    Investors aren't hedging very much these days. (Don't know why.)
  • Mar, 2023
  • Mar 05, 2023
  • Census data reveals over half a million left California during the pandemic - YouTube 
  • Mar, 2023
  • Mar 03, 2023
  • 'The Fed has no choice but to engineer a hard landing'

    ... because to slow inflation it has to get unemployment to like 5%.

    You have to position for that eventual slowdown. - Priya Misra

    What 's keeping the consumer going is accumulated savings, but at some point they'll come down.

    Goods spending has already started to come down. We're watching services.

    When service spending starts to come down I think the job market starts to come down as well, Misra said.
  • Mar, 2023
  • Mar 02, 2023
  • Pandemic was just saving, and now they're spending that unusual savings rate - Becky
  • "The Tragedy of the Second Best"

    The further you are away from the right policy response, which they fell behind on, the more whatever you do has collateral damage and unintended consequences.

    "If you stick to 25 and go 'higher for longer' you risk hiking into a slowing economy and you undermine your credibility." - El-Erian

    "If you go to 50, you undermine your forward policy guidance and the narrative of disinflation (said 11 times during the press conference)."
  • "We need the two year to stabilize in order to have a foundation for risk assets."

    10-year, you have to think about growth (more factoring in of recession).
  • Fed hikes (90 basis points) are priced in, but also Fed cuts (130 points) are priced in.

  • "We have no idea what's going on with productivity."

    Unit labor costs were expected to go up like 1.5%, but went up like 3%.

    Productivity surged during pandemic. A lot of workers were laid off, and then came back in.

  • Mar, 2023
  • Mar 01, 2023
  • Russel does a much better job of differentiating growth and value stocks - Charlie Bobrinskoy

    Interest rates declined for 15 years (with the exception of last year). Value stocks earned their money in the near term. They don't get helped so much by a drop in interest rates as Growth companies whose earnings are 30 years into the future.

    People are also interested in Growth stocks because the grow more. Growth rates.

    However, growth over 10 years always lost to value, before 2005, because people want to own growth which pushes up the stockprice, so they overpay.

  • Because of interest rates.


    About 2% of people want to do entire transaction (deliver the car to me) online, but 70% want to do more of it online).

    Shop, finance, buy, and sell. Services Cargurus offers.

    Instead of a 5-hour process at the dealers, they pick it out and do maybe an hour at the dealers.
  • 33% of women quit or considered quitting their jobs in past year - CNBC survey

    Half of those who said they left their jobs said they did so for better work-life balance. Half also said stress. Half also said for more money. Leaving and taking another job seems to be better than pushing for a raise.

    VP (execs) level job women have left in record numbers.

    About 25% of women said they 'wouldn't work in a state that bans abortion.' Overturn of RvWade happened recently.
  • US companies are exhausted but committed in China after 3 years - Michael Hart (AmCham)

    Lots didn't make a profit in China last year.

    Is China building its own systems, will there be an advantage for Chinese companies, and how big a role will US companies be able to play in China?
    Do they feel welcome? Chinese customers definitely want to buy US products. So issues would come more from national sources, and may be pushed back against by consumers who want the best product.

    75% said they weren't leaving China. The others are looking at options (derisking, building additional operations in other countries). Sometimes because the companies are asked to do so by their suppliers.
  • 3 months ago the majority of Morgan Stanley's clients thought a recession was likely, and now they think it's not so likely

    Wilson thinks the earnings recession is far from finished, so the bear market is unlikely to be near finished. Could be done now, could go down 20% to their basically stable thesis of low 3000s.
  • Firing might be moving to industrial sector

    Fine in Tech sector, but people will not want to see it in industrial.

    Currently just in auto makers.
    Also, there might be something to the leader-follower dynamic, like if the Tech Giants are laying off thousands, smaller companies might say well they're doing that for a reason so maybe we should cut costs too. And same for other sectors. We could draw a Cascading model for firing here.
  • Feb, 2023
  • Feb 28, 2023
  • "This new supposedly generational opportunity in AI"

    Nvidia is up on guesses it will be able to capitalize on AI like chatGPT, but so far no one has demonstrated much real use cases for it (we're about 2 months into mass public adoption). Not long after adoption start, some called it the bubble of 2023.
  • Big tech companies have used cutbacks (firing) to maintain their valuation, but how will they maintain valuation in coming quarters?

    Investors are also looking at company's ability to attract/hire talent.
  • Housing market and borrowing in the economy, 2023

    Typically, when rates rise borrowing continues, because income growth in some sectors slows and the consumer responds by borrowing MORE to maintain their standard of living.

    Housing is the weakest sector right now. An inherently slowmoving cycle (years to play out, so into 2024 some say).

    Homeowners are locked in at really nice rates, so they're not moving, and less people want to buy in because of higher prices/rates, so rent (also a big part of CPI, so contributes to Fed's Tighter for Longer). So they won't be borrowing. Very mean-reverting.

    Home prices will fall (eventually forced sellers, those who have to move, with maybe a 10-15% national house depreciation.


    Yet, pending home sales jumped from Dec to Jan 8% (street expecting only 1%). But a more solid indicator, morgage applications, are down.

    Singapore: Private retail condo prices falling outside of cities, but in cities still rising.

    Property volume, transactions, is down a lot. Instead of 10 viewers, more like 2 viewers. He advises people looking for rental tenants to secure their tenants, because a huge amount of new flats are coming on the market in the coming months and years.

    “$1m load payment interest $40k. Who can pay that?” Meanwhile t-bills are paying 5%.

    Only thing pushing up prices Chinese coming in. But the Chinese economy isn't doing well, and they're not being seen in Korea, Europe, shopping. You see trickles now, not humongous buying power.

    How self-fulfilling are beliefs (currently that the market will be flat or go down) about the stock market?
  • Feb, 2023
  • Feb 27, 2023
  • test
  • Feb, 2023
  • Feb 26, 2023
  • Where p/e starts to matter

    For the past couple years p/e's have been ignored - 'Well they are overpriced but people are treating them like they're not.' But now, with a recession/slowdown not just being used as a word and a possibility (it has been commonly talked about and even asserted over the same period), but rather an actual thing setting in, and a stock selloff happening, it's like, 'Well what's to stop the stock from falling more? if I try to hold it rather than sell?' Well, the price is overvalued for what the company is, so the question is maybe Will people continue to treat the valuation as if it doesn't matter?
  • Feb, 2023
  • Feb 25, 2023
  • Corporate debt cloud

    They'll have to refinance at the higher rates.

    At these high rates, there's not going to be a lot of issuance. So supply will contract and otherwise remain the same at these levels, so that could help spreads a bit.

    We might see a Fed easing cycle when a lot of this is due.

    There's a Fed put for systemic risk, but not for default and losses in the private sector.

    It looks like a lot of managers did their financing right to prepare, but it looks like they will be refinancing into higher rates. That means layoffs, cost contractions,
  • Feb, 2023
  • Feb 24, 2023
  • "At the end of the day, a recession is a psychological phenomenon. It's a lack of faith." - Mark Zandi

    Is that true?

  • In stocks, flight to dividends, high quality stocks. Active stock pickers, not passive. (If you're not a smart stock picker, diversification.) Are you conservative? Are you risky?
  • Consumer still spending, and savings rates higher, but personal spending growth is outpacing personal income growth, so the savings number might well go down / consumers are spending savings they'd built up before.
  • Goods and commodities prices clearly showing path to disinflation is intact. - Jim Lebenthal

    Multiple expansion is only ok when you have trough earnings. - Weiss
    Choppy period until we can really sift through all of this data. - Brenda Vingiello
  • Ukraine reconstruction estimated to cost $350b
  • Feb, 2023
  • Feb 22, 2023
  • More rate hikes are now being predicted, so the end-point is higher. Market is starting to think about 6% by the Fall, which is more than had been bakedIn.

    How much the rate hikes will be will be a function of the stock market.

    Short rates (2-year) made a new high briefly.

    Interest rate markets have been moving higher.

    If you get 6% in a 6-month bill, you're getting 2/3rds of the longterm appreciation of the stock market with no risk at all. That would provide heady competition for the stock market. Cash could be not just a waste of time as it had been throughout 2010s. 
  • A broadbased, macroeconomic-driven slowdown in hiring - ZipRecruiter

    Corroborated by other companies. Large and SMB (small and medium).

    A delta has opened between open jobs that are open and open jobs that employers are willing to pay to recruit for. Wait-and-see posture by employers, less certainty, although they are still seeing good sales, just not sure if this is the time to hire. Putting their dollars behind their hiring is another story.

    Less liklihood employers will close even when they find a candidate they like. Candidates would then swell. Spike in jobseeker activity and engagement level.

    Last 3 years unprecedented leverage in favor of jobseekers.
  • China has no choice but to stimulate growth - Ben Harburg

    All those regional governments that were previously told to maintain covid zero for 3 years are being told Grow at all costs.

    Infrastructure spending. 7% growth year in China based on stimulus, expected by Harburg.

    Regulatory things, maybe softened by now. Want Western investment.
  • Current environment lends to an activist campaign, some say
  • Duration risk versus or credit risk in fixed asset investing

    Vanessa Chan said duration is looking a little more attractive.
  • Consumers are slowing down (in US), according to analysts. Even in retail valuations are starting to matter.

    As more disposable income goes to inflation. Can't pass costs. Although the big companies like Walmart did handle the inventory issue, people think.
    Savings rates going down a bit.
  • Inflation cooling will make the Fed data dependent, instead of data reactive, and that means vol will fall (both for yields and for equity risk premium), and that's why stocks can rally later - Tom Lee

    Both sides of the inflation story (energy and housing prices), and that's 60% of core, are deflating. Might print 2% inflation in the summer.

    Hikes have been associated with higher stock prices in many relatable periods. If inflation risk falls yields will fall and equity risk premium will go up.

  • Feb, 2023
  • Feb 21, 2023
  • Big firms have hired thousands of workers, and can't hire enough people, and are raising wages, but these are people they can easily fire.
  • Shift in psychology

    Hasn't happened, but might be happening now, where the public goes from thinking there can be a soft landing and the economic issue if fixed, to where they realize there has to be a recession.

    Leading indicators as they are now have historically always meant a recession ahead.

    Not just money supply but bank lending standards and the demand for CNI loans have tightened to a level that leads to a recession. The data shows a recession, Dwyer said.

    Stocks markets have never bottomed before a recession. Average time from beginning of a recession to market bottom is half a year.

    "We know that when the 2-year is making a peak, the S&P has never made THE low until after the 2 year peaks. That means the October low isn't it. We also know that the market has never bottomed before the recession even began."

    We're over a year into this bear market. The next low will be the low, and will be when bad news finally will become bad news. That's typically when you make the recession-based low. Dwyer will go for early cycle names at that time. Financials and economically-sensitive cyclical names.

    "The soft landing scenario is not the best case scenario. We don't have to guess. We know exactly what's going to happen if you're in a soft landing. Inflation is going to remain elevated. The Fed is going to have to tighten. And the market, and risk is going to get hit."

    "What we really need is to go into a recession to the point where the Fed will lower rates enough that it kickstarts a credit cycle. Not now when we're about to enter a potential negative cycle."

    An unemployment rate of a half a percent for an average of 3 months above the low, you know you're in a recession. Ie if the US get's a 3.9% unemployment rate. Should be about to make a low. Creates an opportunity for a real, sustainable bull market. The problem is money, not just the thought of money. The money system is shut down.
  • European consumers seem to be more preoccupied in buying habits

    Bright spots are US, Latin America, Africa, Middle East, Asia.

    Difference in how Europeans and Americans perceive their family finances. Not shown in numbers yet.
  • Most retailers recognized oversupply, marked down aggressively
  • Home Depot down 5% today

    Trends in housing market.

  • Salaries payed in restricted stock units (15% - 50% lower)
  • IPOs in Q2?

    There's currently a fair amount of growth capital out there right now, so that can extend a company's ability to stay private. The need to go public isn't as great as years ago, when after 2 or 3 years of growth, in order to get more growth capital, companies more commonly went public. - David Rubenstein
  • The gap between buyers and sellers not quite as much as 6 or 9 months ago
  • China, al contrario de everywhere else, you have quantitative easing, interest rates rates are falling, equity valuations are reasonable. China consumer coming back online across 2023

  • China reopening as a disinflationary factor (supply-driven) - Lavorgna

    Not the same expansionary growth in commercial and residential real estate, so their demand for commodities isn't going to be as high.

  • Tightening cycle has been aggressive and eventually the economy is going to really feel it. We're just not there yet. - Joe Lavorgna
  • Economist are looking already toward August (Jackson Hole) and October (?jobs data)
  • The Fed is going to wait for clear evidence inflation is going down, while the market is going on the preponderance of evidence thesis - Paul McCulley

    Rates will only last for another year or so, according to the yeild curve and how disinflation (although not as fast as some would like) is manifestly in train.
    Market may be too giddy right now, though.
  • Gamestop, AMC, meme stocks

    If a company does not make money, the stock cannot float high forever.
    There are equal numbers invested on the long and on the short side.
  • Interactive Brokers doing well

    As interest rates rise, they make more money on selling the cash they have. And it allows them to pay 4.8% (currently) on idle cash, while most banks pay a fraction of a percent. This allows them to get more and more customers. Growth of business.
  • Prices going down in energy, housing, rentals, commodities - Seigel

    Payrolls strong. Service sector always the last to go down in inflation. Tightening only started 11 months ago.

    Cumulative effect of monetary policy.
    (Note though that housing prices has been stickier, lending to services sector - Aneeka Gupta)
  • "Inflation increases your operating leverage and that cycle has turned down" - Mike Wilson

    Their work suggests the market is wrong in thinking earnings decreases won't be that extreme. Earnings recession because of over-earning during the pandemic.

    Range between 3000-3300 (consistent estimate 6 or 9 months). Currently at 4000 ("or just air").
  • Feb, 2023
  • Feb 16, 2023
  • Highest ever consumer debt ($1t) combined with rising interest rate
  • "Don't fight the Fed versus don't fight the tape"
  • Less money in the system

    Powel's recent speech.

    (After 10 or 15 years of loose money and boomers retiring.)

    1/3 of money in system to be taken out, Zeihan said.

  • Feb, 2023
  • Feb 13, 2023
  • Investors are again very divided

    After a strong January in markets (up 20% from lows). Before that it sounded very negative listening to CNBC (only Tom Lee optimistic). During, people were happy but cautious, and have been voicing 'bear market rally' case all along.

    Many saying the bottom is in, but that's beside the point for most. One of the issues is the Fed, which doesn't want inflation, but seems to be acting like it's not going to be hawkish (which it will have to be if inflation is continuing).

    Anyway, tons of investors on CNBC saying bear market rally and some saying significant drawback in store. Others saying it's time to be offensive.
  • Feb, 2023
  • Feb 08, 2023
  • AI is the bubble of this year - Josh Brown
  • Feb, 2023
  • Feb 06, 2023
  • Probably need a 20% reduction in earnings to get enough of an inducement to lay off enough workers to push the unemployment rate up enough to bring down wages to bring down inflation - Bob Prince

    So far corporate profits are doing fine and they're looking for more workers.

    There's still a lot of nominal demand.

    Now spending is being financed by income which is being financed by spending (unlike a couple years ago when spending was financed by money printing).

    A return to the boom-bust cycle. Like the 70s, not like the last 10 years. Will likely be an iterative process over several years.

    The most obvious bubbles have been popped. But there's an earning bubble, a profits bubble, that was inflated by the printing of money. Still to come.

    Historically to get 2-3% increase in unemployment rate you need a 20% drop in earnings.
  • Feb, 2023
  • Feb 03, 2023

  • Gets around the H1 Visa.

    Even skilled tasks.

    Onshoring manufacturing (robotics, 3d printing, getting the price down to what it was in Asia), offshoring talent. Brazil, Poland (used to be Russia/Ukraine), India. They're not as productive (part is the method of having employees remotely), but price makes up for it. Metaverse.

    Will likely depress wages for white collar workers, some say.
  • Jan, 2023
  • Jan 31, 2023
  • 65% of US adults (166m(can that be right?)) had no money after paying bills in December

    March 2020 was the same number.

    Dec 2021 it was 9m.

    Visa's saying everyone's spending, though.

    High income people are also effected.
  • Jan, 2023
  • Jan 27, 2023
  • When the market pulls back again, where is the money going to come from

    One investor thinks it'll come more from Tech again, which he thinks still can't carry the weight of its overpricing.
  • Jan, 2023
  • Jan 25, 2023
  • The European market (and EMs) is a bull market, says Charles Schwab's Jeff Kleintop - YouTube 
  • 2% is too low for the relative price changes you need while re-wiring global supply chains
    It's also not far enough away from 0.
  • What's your non-recoverable mistake? Not What are you going to do? How do you hedge against it?

    Most mistakes in investment are recoverable over time.
    Blind spot. These people simply don't understand structural uncertainty. When faced with something uncomfortable they ignore it, downplay it verbally.

    Reframers. Hear something, it's uncomfortable, and they reframe it.

    Active inertia (tends to be the most successful group). Say the same thing but louder rather than do something different.
  • We're going to see massively different outcomes for different companies and different sectors

    Unlike the past when there was no issue except liquidity and there was lots of liquidity. Strategy then was passive.
  • While we're going to a new economic environment destination, we have to think about both (the enjoyment or opposite) the journey and the destination. - El-Erian

    The destination can be so exciting the journey isn't worried about. Also, the journey can be so unpleasant it spoils the destination.
  • We have lots of zombie companies that are holding back productivity

    We are heading toward a destination where financial markets are less distorted.

    Growth models have risen in priority. Better treatment of our planet is mixed into this this time.
  • The big frustration of last year was there was nowhere to hide (not in bond market) - El-Erian

    As liquidity was withdrawn everything was sold off.
  • Reasons for economies slowing down, according to El-Erian

    China. Mishandling of exit from ZeroCovid, vaccination policy. And reorienting growth model (currently based on ever-closer globalization). China will be a drag.

    Europe. Dealing with energy supply disruptions. Inventory management has been improved. Structural headwinds. Growth will be slow.

    US. "Cleanest dirty shirt." Structurally it can grow, but could fall into recession if Fed pushes US to it. There was no common solution, unlike 2009. Regional problems means insularity.
  • Narrative has shifted to tightness in the labor market, some say

    More employers laying workers off. Having to pay more to get new workers to join.

    Inflation started in energy and food, then went to the goods sector, and is now in the services sector.
    Inflation was allowed to get embedded in the economy.
  • Jan, 2023
  • Jan 17, 2023
  • Recent downward guidance

    "Why wouldn't you guide down?" if everyone's facing the same headwinds.
  • 20 years China's become a trading partner.

  • Jan, 2023
  • Jan 10, 2023
  • Earnings can be down yet S&P goes up lots of years.

    It's because during a bad year, people sell off and prices are down (like last year let's say 20 or 30% down). Then the next year so much has been discounted that with a low earning report people can still be buying saying yeah that's fine that's discounted already. They're anticipating.