Economy & Capital Markets: The Federal Reserve June 14th projections show improved GDP (higher), unemployment (lower) and inflation (lower) expectations, as well as; “higher for longer” Funds Rate of 5.6% (2023), 4.6% (2024) and 3.4% (2025). Whilst the longer run Funds Rate is maintained at 2.5% On 24th February 2022, Russia launched a large-scale invasion …
Category Archives: Politics
Why the essential business cycle is driven by innovation, not speculation.
Innovation from a more efficient process or discovery of raw resource (material/people). Wealth sees that capex/training will increase to diminish short term profits so valuations decline. Producers see long term profits will rise so borrow (now relatively cheaper than equity) to fund capex. Interest rates rise. Consumers see better return on saving so divert from …
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Is it time for the Federal Reserve to get REAL
I don’t claim to be a genius an intellectual or know what’s better for anyone else. What I do know is that when I deposit my cash I demand the return to exceed inflation and cost of insurance for default (if I wish to purchase). As can be seen from the above chart since 2000, …
Continue reading “Is it time for the Federal Reserve to get REAL”
Steven J Cohen CFA Newsletter Q4 2022
Economy & Capital Markets: The US Federal Reserve Bank identifies 0.5% as the long run REAL interest rate. This implies that production (or tax revenue) expansion needed to payback a loan and interest is also expected to be 0.5%. Given the exponential technological advances and still positive demographic growth, there must be many areas where …
FTX
We have been a customer of FTX since june 2022, we chose FTX because it had the greatest liquidity in FUTURES crypto currency. We transferred from Binance due to increased UK regulatory burden on customers to trade crypto derivatives. Although it was still possible to trade on margin on the Binance exchange the increased workflow …
Steven J Cohen CFA Newsletter Q3 2022
Economy & Capital Markets: The US Federal Reserve Bank identifies 0.5% as the long run REAL interest rate. This implies that production (or tax revenue) expansion needed to payback a loan and interest is also expected to be 0.5%. Given the exponential technological advances and still positive demographic growth, there must be many areas where …
Steven J Cohen CFA Newsletter Q2 2022
Economy & Capital Markets: On June 15h the effect Federal Funds Rate was raised to an average of 1 5/8ths %, with its projection for the year-end raised to 3.4%. US 10 year bond yields are now hovering around 3% after the bond price had fallen 17% from its highs, whilst the S&P 500 has …
Steven J Cohen CFA Newsletter Q1 2022
Economy & Capital Markets: On March 16th the Fed raised: the effect Federal Funds Rate to an average of 3/8th %, with a projection for the year-end of 1.9% and, 2.8% by end 2023. The long end of the bond market sold off in response. On 24th February, Russia launched an large-scale invasion of Ukraine, …
Steven J Cohen CFA Newsletter Q4 2021
Economy & Capital Markets: On December 15th the Fed indicated that: Treasury and mortgage bond purchases are to end in mid-March 2022, and its benchmark interest rate will rise to 0.9% by the end of 2022 and then onto 1.6% by the end of 2023. Both the stock market and treasury yields maintained their range. …
Newsletter Q3 2021
Economy & Capital Markets: In September the US Fed, revised expectations of 2021 growth down to 5.9% and inflation up to 4.2% whilst, indicating the Federal Funds rate will rise to 0.3% in 2022 and then to 1% in 2023. The Peoples Bank of China views: contact-based consumption constrained, problems for small businesses and manufacturing …