Satan Lives
I have somewhat of a different view of the world than most. Of course, my work isn't based on emotions or what is reported in the press or what I hear from Wall Street. (By the way, emotions, media and Wall Street are different measurements of the same data, that being opinion.) My work is based on measurable models.
I've written on here that we should wish for inflation and frankly, although it has been a killer on the wallet, rising commodity prices have been a barometer of good news for the global economy up until recently. I wrote a long time ago that traders would drive oil and commodities until they killed the global economy and that is exactly what is happening. It's not the only factor but it is a major factor. I just expected we'd break well before oil hit $150. When commodities start to crack and crack significantly, bulls will likely rush back in the market believing lower commodity prices will mean a recovery in economic activity due to less stress on consumers. This argument is based on the same fallacy that I wrote in the last post - that this is a consumer-led recession. The reality is when commodities crack, it will be a harbinger of Satan's return. (see below)
I have cited the Merrill Lynch Fund Manager's Survey on here before as a contrarian data point. Something that has worked quite well given Wall Street has been completely wrong on every major macro call. Before too much time passes, I want to get a recent survey up. In May the Merrill survey showed only 18 percent of respondents thought we had entered a recession, a 250% increase in the number of respondents expecting higher inflation, 80% expecting long term rates to be higher in a year and a large jump in the number of managers overweight oil. In hindsight, we know they are wrong on the recession call and there is no reason to believe they will be right on any of the other calls either.
It may be of anecdotal interest to note there are 267,596 instances of inflation in a search of blog posts over the last thirty days. There are 4,390 instances of deflation. Need I even comment that most bloggers are simply regurgitating media and Wall Street hype and are surely not accurate predictors of future economic trends?
If you believe future risks are inflationary, I've got some land to sell you. It's in Manhattan. You'll make a killing. As I've written, deflation is the Satan of economics. It is cunning, manipulative and deceitful. And, nearly everyone in the investment community and media has been lured into his den through the false prophet of inflation. Being lured into a trap, they now need to pray to save their souls. Why? Because being on the wrong side of the trade, that being inflation, is going to cost them trillions and trillions and trillions of dollars.
I've written on here that we should wish for inflation and frankly, although it has been a killer on the wallet, rising commodity prices have been a barometer of good news for the global economy up until recently. I wrote a long time ago that traders would drive oil and commodities until they killed the global economy and that is exactly what is happening. It's not the only factor but it is a major factor. I just expected we'd break well before oil hit $150. When commodities start to crack and crack significantly, bulls will likely rush back in the market believing lower commodity prices will mean a recovery in economic activity due to less stress on consumers. This argument is based on the same fallacy that I wrote in the last post - that this is a consumer-led recession. The reality is when commodities crack, it will be a harbinger of Satan's return. (see below)
I have cited the Merrill Lynch Fund Manager's Survey on here before as a contrarian data point. Something that has worked quite well given Wall Street has been completely wrong on every major macro call. Before too much time passes, I want to get a recent survey up. In May the Merrill survey showed only 18 percent of respondents thought we had entered a recession, a 250% increase in the number of respondents expecting higher inflation, 80% expecting long term rates to be higher in a year and a large jump in the number of managers overweight oil. In hindsight, we know they are wrong on the recession call and there is no reason to believe they will be right on any of the other calls either.
It may be of anecdotal interest to note there are 267,596 instances of inflation in a search of blog posts over the last thirty days. There are 4,390 instances of deflation. Need I even comment that most bloggers are simply regurgitating media and Wall Street hype and are surely not accurate predictors of future economic trends?
If you believe future risks are inflationary, I've got some land to sell you. It's in Manhattan. You'll make a killing. As I've written, deflation is the Satan of economics. It is cunning, manipulative and deceitful. And, nearly everyone in the investment community and media has been lured into his den through the false prophet of inflation. Being lured into a trap, they now need to pray to save their souls. Why? Because being on the wrong side of the trade, that being inflation, is going to cost them trillions and trillions and trillions of dollars.
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