Le SilVerado hasn't started work quite yet...
Le Silverado has been partying more days than not this summer and has been out of the country more days than in; this combination has kept me away from the computer and the internet. However, I am now back in action, and done with the CFA program as I just learned I passed level 3. I am currently sitting in the Harvard Club next to Gatzlaff and the other 25 new analysts / associates in our FMR class. Other than the view of the harbor, I am incredibly bored in this training deal - three weeks of dinners and socials, Accounting, Modeling, Valuation, and other boring shit that we did throughout business school. Finally get started on September 5th. I am covering the consumer once again, could be fun if I get the right industry...hopefully gaming, which would allow me to go to Macau, London, and Vegas often. But I will probably get stuck doing Tires and Rubber...haha. MW have you started yet?
On another note, yesterday, I looked at the Q1 Flow of Funds report and found some really ugly information. First of all, nonfinancial domestic credit edged up by 160bps to an annual growth rate of 11%, which brings it up to a mesely $27.129 trillion. The fastest growing segment was mortgage debt, which grew at an annual clip of 13.6% only 70bps above federal gov't debt.
So if credit is expanding at double digits, commodity prices (aka raw goods) are at 20 yr highs, asset markets are at the third highest valuation point in the last 100yrs, M2 is growing and accelerating at 5%+, (WHO KNOWS WHAT M3 IS RUNNING AT), and CPI is beginning to accelerate and is less than 100bps below current rates, then I think that this little pause we see here is only to manage expectations. I mean we are at a best case zero real rate environment and at worst a couple hundred bps negative rate environment; either way rates must rise even if it kills the markets and the economy. However, everyone in America likes a strong economy and high asset prices, which means that there is a good chance that BB will act the fool and ease in the next 12 months. Maybe if they taught people about the danger of egregious credit and money printing in any stage of school then people might start chanting "Volcker...Volcker...Volcker". However, these Fido people are no different than the average Wall St. guy that thinks the economy will grow at 3.5% and earnings will increase at double digit rates into perpetuity.
So I am back, whether that is a good thing or not, you asked for it and here I am.
Hope all is well with you all, and Jerry I hope you get a job big guy. Keep your head up.
On another note, yesterday, I looked at the Q1 Flow of Funds report and found some really ugly information. First of all, nonfinancial domestic credit edged up by 160bps to an annual growth rate of 11%, which brings it up to a mesely $27.129 trillion. The fastest growing segment was mortgage debt, which grew at an annual clip of 13.6% only 70bps above federal gov't debt.
So if credit is expanding at double digits, commodity prices (aka raw goods) are at 20 yr highs, asset markets are at the third highest valuation point in the last 100yrs, M2 is growing and accelerating at 5%+, (WHO KNOWS WHAT M3 IS RUNNING AT), and CPI is beginning to accelerate and is less than 100bps below current rates, then I think that this little pause we see here is only to manage expectations. I mean we are at a best case zero real rate environment and at worst a couple hundred bps negative rate environment; either way rates must rise even if it kills the markets and the economy. However, everyone in America likes a strong economy and high asset prices, which means that there is a good chance that BB will act the fool and ease in the next 12 months. Maybe if they taught people about the danger of egregious credit and money printing in any stage of school then people might start chanting "Volcker...Volcker...Volcker". However, these Fido people are no different than the average Wall St. guy that thinks the economy will grow at 3.5% and earnings will increase at double digit rates into perpetuity.
So I am back, whether that is a good thing or not, you asked for it and here I am.
Hope all is well with you all, and Jerry I hope you get a job big guy. Keep your head up.
posted by Not Sure if Al Gore or Global Warming is a Bigger Joke at
2:45 PM
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