It sounds like the possible cease fire between Israel and Hamas isn't immediately coming to fruition, especially as Israel launches new attacks. Nonetheless continued optimism around rate cuts helped equities gain some ground while treasuries were little changed ahead of this week's auctions.
If you haven't followed the story of the BofA investment banking junior analyst who apparently died from being overworked, it's an interesting one, see XTOD's below.
Somewhat under the radar is the Fed's upcoming strategic policy review, the one that last gave us "FAIT". I thought this line of thinking below, that John Cochrane laid out at a recent Hoover Institution Conference titled Getting Monetary Policy Back on Track, was very much in line with some of what I mentioned in my last FOMC Recap.
Ignorance. Finally, we should admit that neither we, nor central banks, really understand how the economy works and how monetary policy affects the economy. There is a complex verbal doctrine that bounces around central banks, policy institutions, and private analysts, asserting that interest rates have a relatively mechanical, reliable, and understood effect on “spending” through a “transmission mechanism” that though operating through “long and variable lags” gives the Fed essentially complete control over inflation in a few years. The one thing I know from 40 years of study, and all of you know as well, is that there is no respectable well-tested economic model that produces anything like that verbal doctrine. (More here.) Knowing what you don’t know, and that nobody else does either, is knowledge. Our empirical knowledge is also skimpy, and the historical episodes underlying that experience come with quite different fiscal and financial-structure preconditions. 1980 was a different world in many ways, and also combined fiscal and microeconomic reform with high interest rates
On the day ahead it's another light one with the 3Y Treasury Auction likely being the highlight.
XTOD: At this time, we are being told that no strike has played out and that the mood on the floor is very somber. Additionally, there’s some questions on the accuracy of the WallStreetOasis account who posted this thread....Strike or No Strike, we ultimately need reform on the street. Work hours need to improve across the board. In regards to this topic, we will only defer to follower submitted, non-anonymous information for future updates.
XTOD: The death of the BofA associate from overworking is tragic and touched a nerve. The typical reaction is usually: “guys, take care of yourselves, it’s not worth it, it’s just a job”. But it’s not that simple. I was there. I know. Imagine you work hard all your life, you land a dream job that opens new doors you never thought existed. Imagine you don’t have a Plan B. You’ll work hard to make it work.
Failure is not an option. So who’s fault is it for the tragic death? It’s not the associate’s fault. It’s his Boss’ fault. It’s the company’s fault. I left my job in Investment Banking as soon as I had a plan B.
A few months later, my former boss ended up in hospital. He almost died from over-working. I can’t say I was surprised. My message is this:
- If you are a junior, avoid toxic bosses.
- If you are senior and have juniors working for you, their well-being is on YOU.
XTOD: Didn't think it was possible, but this is actually worse than the Blackstone video https://twitter.com/i/status/1787093247728218519
https://x.com/WallSt_Gossip/status/1787493180075606234
https://x.com/agnostoxxx/status/1787411135437713523
https://x.com/dailydirtnap/status/1787257786188845060
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