New all-time highs on the S&P. The earnings picture to date has been pretty solid. Yields ended the day slightly higher despite regional bank fears. The 10Y Treasury auction was strong with the largest stop thru when issued since last February. Fedspeak generally held the line on the desire to see more evidence that inflation will get back to target before initiating cuts. Continue to see various takes on Powell's 60 Minutes appearance, specifically around his calling the national debt unsustainable. Those takes include views from the MMT crowds view that there is nothing unsustainable about the debt (but that the Fed should cut rates), and views of certain famed investors clamoring for how the Fed needs to cut rates to keep the deficit from continuing to grow (not to mention how they could really use low rates to sustain certain investments).
I obviously don't know Powell (I once rode an elevator with Bernanke), but I wonder if he would agree with this quote:
“I define central bank independence in one sentence, it's the ability to raise interest rates when the Treasury doesn't want you to. And the Treasury almost never wants you to, because of the cost of the debt.” – Peter Stella
On the day ahead it's jobless claims and the 30Y auction. Other than that I guess we'll see if the Tucker-Putin interview drops.
XTOD: One of the biggest mistakes by finance idiots* is to conflate tail risk awareness with bearishness.
Believing in Black Swans ≠ Permabears. * Short for fucking idiots.
XTOD: BREAKING: The winner of the Nevada Republican Primary election is literally "None of These Candidates." Over 61% of the votes are for "None of These Candidates." This is double the 32% that Nikki Haley, the second place candidate, received. Donald Trump was not on the ballot.
XTOD: Yet another example of monetary policy in action - rich people (credit scores >760) were taking out massive amounts of mortgage debt to bid up the price of housing until the Fed started tightening policy in early-2022 https://newyorkfed.org/medialibrary/i
XTOD: My undergraduate thesis was on this very question. I argued that religions can be modeled as providers of social insurance, and that the US secularized after Europe due to our under-developed welfare state. To test this, I showed that the post-'90s "secular boom" was associated with Medicaid expansions in prior years at both the state and census division level, particularly the '80s expansion to uninsured kids and the explosion in federal payments to charity hospitals after the '86 budget act.
In essence, it seems like Medicaid crowded-out the social insurance function of religion for many parents, leading to a cohort of kids who grew up with weaker affiliation. As a secondary effect, the growth in federal payments also induced many sectarian hospitals to be bought-out by secular networks. There's a sizable literature showing a similar relationship holds cross-nationally as well as in micro, such as Dan Hungerman's work showing the negative impact of welfare expansions on church donations. This was my first empirical paper and, while I remain concerned about spurious correlation, I think there's more than enough "there there" to at least make this mechanism plausible. I would love for someone with better stats abilities to try to replicate it using the latest data, as I agree with David that it is an important and still under-theorized question.
XTOD: The 32-year-old banker, whose satirical alter ego has gained a cult-like following on Instagram, reveals his identity in an FT interview: https://on.ft.com/3OuCiuH
https://x.com/nntaleb/status/1755253926352331133?s=20
https://x.com/KobeissiLetter/status/1755100497776656708?s=20
https://x.com/mredmond88/status/1755047980938194976?s=20
https://x.com/hamandcheese/status/1754981366058324328?s=20
No comments:
Post a Comment