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| From: 'The Devil's Financial Dictionary" by Jason Zweig |
The irony of maintaining a daily economic update blog while firmly believing it is best to ignore all of the noise and false stimuli is not lost on me. If you’re paying attention it’s the message of this blog that you can’t predict the future and it's a waste of time to focus on the noise or "what the world looked like ten minutes ago."
"the "short-term crowd" responds constantly to "false stimuli" whether it's the latest economic data point or the trivial news that a company has beaten analysts' expectations. "You need to be wired not to believe the bullshit, to not be listening." - William Green discussing and quoting Nick Sleep (if you don't know who Nick Sleep is google Nomad Partners investment letters)
"All of humanity's problems stem from man's inability to sit quietly in a room" - Blaise Pascal
Speaking of noise, on Friday, Fed Governor Waller said he saw inflation falling much faster than he anticipated, which pushed him into the 50bp camp, while dissenting Fed Governor Bowman released this statement which included: "Although it is important to recognize that there has been meaningful progress on lowering inflation, while core inflation remains around or above 2.5 percent, I see the risk that the Committee's larger policy action could be interpreted as a premature declaration of victory on our price stability mandate." as she argued in favor of a 25bp cut which "would also avoid unnecessarily stoking demand." Speaking of demand, nothing is stopping demand for AI as we're firing up nuclear reactors to power data centers.
We ended the week with equities at or near all-time highs and with the 10Y ~10bps higher than it was prior to the FOMC meeting, trading near 3.75%. The 2Y yield at 3.60% is little changed from pre-FOMC. The geopolitical situation looks no better than it was with Israel and Hezbollah firing rockets. The only situation worse than geopolitics might be Diddy's.
On the week ahead PCE will be in focus along with PMI's and talk from Fed officials like Powell.
Mon: Flash PMI's, Fedspeak
Tue: Home prices, 2Y Auction
Wed: New Home Sales, 5Y Auction
Thur: Durable Goods, 2Q Final GDP, Jobless Claims, Powell, Pending home Sales, 7Y Auction
Fri: PCE & Income, UofM final
XTOD: Why indeed! To recognize market imperfections, even serious ones, is one thing; but to claim, in light of experience, that governments are generally better able than the market system is to husband scarce resources, you have to be a moron, or a fiend, or both.
XTOD: "Nobody believes this, but Charlie Munger and I have been buying stocks and business for 50 years. In that entire time, we've never had a discussion of macroeconomic factors in making a decision as to whether to buy, or sell a business — buy a business, or buy or sell securities.
We just — it just doesn't get into it — our consideration.
And if I were buying a farm, I would not be thinking about what the Fed was going to do. If I were buying an apartment house, if I were buying a business outright I wouldn't do it.
So, when I buy a piece of a wonderful business, say Coca-Cola or American Express, it is not a matter of consideration. So Charlie and I will talk about the business. We will not get into discussions about the Fed, or — or Government." - Warren Buffett
XTOD: This is how the world works. The stupid ones can never break free of the apparent complexity. Haruki Murakami
XTOD: “So, Cheryl, it’s called a freak-off, and Diddy asked me if I could bring the whale head and, well, things got out of hand.”
XTOD: Jamie Dimon has doubts about a "soft landing":“I hope it’s true, but I’m also more skeptical that inflation is going to go away so easily.” It´s gone already! https://pbs.twimg.com/media/GX80emHXIAAiMdd?format=jpg&name=900x900
XTOD: "Success on Wall Street was getting the most money. Success for us was having the best life." - Ed Thorp
https://x.com/GeorgeSelgin/status/1837785896541712619
https://x.com/mastersinvest/status/1837696421166043233
https://x.com/vtchakarova/status/1837605458112401584
https://x.com/TheRickWilson/status/1837103455481077824
https://x.com/NGDP_Advice/status/1837245085479481835
https://x.com/morganhousel/status/1837195093050016102
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