"People have always had this craving to have someone tell them the future. Long ago, kings would hire people to read sheep guts. There's always been a market for people who pretend to know the future. Listening to today's forecasters is just as crazy as when the king hired the guy to look at the sheep guts. It happens over and over and over." - Charlie Munger at the 2004 Berkshire Hathaway Shareholder Meeting
I don't know if this qualifies as a prediction of the future, but perhaps Nobel Prize winners will know the future, at least according to a Biden campaign spokesperson citing a letter written by 16 economist arguing that a Trump presindency will reignite inflation: “Top economists, Nobel Prize winners, and business leaders all know America can’t afford Trump’s dangerous economic agenda.” The word "know" there seems pretty strong.
On a related note, in my observation, it is interesting that many American's believe that the political party they oppose is sure to create more inflation, but collectively many American's and most economist seem to believe inflation is falling and likely to continue to fall. Can it really be true that survey's about inflation show that people believe inflation is well anchored and not likely to rise in the short and long-run, while at the same time, irrespective of the next President something like 50% of the population will also believe that inflation will rise because of the party running the country? The reality is likely that neither party has any current concept of fiscal responsibility. Maybe Fed Gov. Bowman is right to believe that rate cuts shouldn't be in the cards for 2024 citing fiscal stimulus in her risk of concerns yesterday.
And maybe Ray Dalio is right to be concerned about this crazy political divide when he writes: "we are probably headed toward an existential battle of the hard right against the hard left in which you will have to pick a side and fight for it, or keep your head down, or flee. By flee, I think that will mostly be from one state to another and we will see increased emphasis on state rights rather than the central government being dominant." Dalio cites that the U.S. is in the midst of late-cycle debt dynamics leading to civil conflicts, in a very long piece he wrote for TIME and published on LinkedIn. In fairness I didn't read his entire piece yet, but the gist is debt and wealth inequality are precursors for potentially terrible conflicts.
In the markets yesterday it was pretty boring, some rising home prices and Canadian inflation rising for the first time in 5 months, dashing further rate cut hopes some. Yields are 4.71% on the 2Y and 4.25% on the 10Y. On the day ahead it's sales of new homes and the 5Y Auction.
XTOD: Until broad assets stop rallying I will never get to recession island. Tacking back and forth with powerful offshore breezes making for no progress. As assets continue to rally there remains a small chance that our ship will be blown off course completely and arrive back on H4L island
@DannyDayan5 is there waiting for a hike.
XTOD: Based on my study of history, I believe there are now and have always been five big, interrelated forces that drive how domestic and world orders change.
The following article https://linkedin.com/pulse/pick-side-fight-keep-your-head-down-flee-ray-dalio-53fpe/?published=t, which appears on @TIME , focuses on why I believe we are approaching the point in the internal order-disorder cycle when you will have to choose between picking a side and fighting for it, keeping your head down, or fleeing. Please leave any thoughts or feedback you have in the replies.
XTOD: Wow. TSA throughput reached 2.996 million people on Sunday ... a new high
XTOD: Stop saying yes automatically, without thinking! The point is not to say no to all requests.
The point is to say NO to the nonessentials so we can say YES to the things that really matter!
XTOD: “Open your mind to what I shall disclose, and hold it fast within you; he who hears, but does not hold what he has heard, learns nothing.” — Dante Alighieri, Paradisio, Canto V
https://x.com/dampedspring/status/1805714446255321580
https://x.com/RayDalio/status/1805714698156868019
https://x.com/KevRGordon/status/1805583881401516163
https://x.com/GregoryMcKeown/status/1805266263674966418
https://x.com/Mythos_Man/status/1804084442329403771
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