Doom and gloomers suck.
Articles written by: Cullen Roche
Hatzius: The Deficit Will Decline Substantially in the Coming Years
Jan Hatzius of Goldman Sachs had some interesting commentary on the deficit the other day. You’ll recognize the sectoral balances chart in his work as he’s one of the few analysts on Wall Street who seems to really appreciate the importance of Wynne Godley’s work. Here, he describes the 3 reasons why the deficit is about to slide in the [...]
Thoughts on the “Value” of Fiat Money
I generally liked this post by Joe Weisenthal on Bitcoin and the value of fiat money. In particular, I like these points: “But fiat currencies have tremendous intrinsic value because governments say they do. That’s why they’re called fiat currencies. They have value by government fiat. This truth might be annoying, but the fact of the matter is that we live in [...]
Redesigning the “Ask Cullen” Section
The “Ask Cullen” section has turned into a total mess with over 1,800 comments and absolutely no organization. So I added a forum style page that will organize the questions and comments better. It will be in the same place where the old comment section was on the front page menu bar. I hope this makes the site easier to [...]
Kahneman Fathoms the Human Mind
I always enjoy the thoughts of Daniel Kahneman even if I don’t entirely agree with everything he says. Then again, I might just be one of those quacks he refers to who has convinced himself that he’s an expert in something that no one is really an expert in…. Via Forbes: Forbes: You won a Nobel Prize for fathoming the [...]
Chart of the Day: Corporate Profits vs the S&P 500
I’ve made a big fuss over QE in recent years and yet the market continues to plough higher. I often have people ask me: “Why does QE make stock prices go higher if there’s no fundamental impact?” My answer is always the same.
Understanding the Modern Monetary System Series
I’ve consolidated the 7 part series on Understanding the Modern Monetary System below. You can always find the condensed version in all 7 parts on this page or if you want to torture yourself with 40 pages of monetary glory you can read the full paper here. I know it’s a lot to digest, but it’s better than sitting through a [...]
Goldman: Time to Short Gold
This is an interesting change in position from Goldman on gold. They’re not just saying sell. They’re saying sell short. It’s particularly interesting when you consider that it’s occurring after sentiment appears to have cratered (via FT Alphaville): Turn in gold prices accelerating; closing our long gold position Given gold’s recent lackluster price action and our economists’ expectation that the [...]
Sell in May and Go Away?
As May rolls around you’re bound to hear an endless number of pundits and market participants discussing the “sell in May” phenomenon. CXO Advisory has an excellent data analysis of the sell in May theory. In short, buy and hold beats “sell in May”. So maybe we can all move past this silly seasonal pattern that adds little value to [...]
Kyle Bass: It’s the “Beginning of the End” for Japanese Bonds
In October of 2012 I wrote a research piece at Orcam discussing why it was dangerously misguided to take on the Japanese Government Bond trade well known as the “widowmaker” (shorting JGB’s). In essence, many investors have made the mistake of assuming that the Japanese monetary system is perfectly akin to those in Europe which would break the Japanese government [...]
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