Saturday , April 17 2021
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Gregor Samsa

Gregor Samsa

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Articles by Gregor Samsa

Masters Week: Jack and German POWs (BFTP)

9 days ago

BFTP: Blast From The Past Post
Who would of thunk “Infrastructure Week” at Augusta meant hiring German WWII POWs to build bridges at Golf’s Mecca.
My top three picks this week for total money won:  Jon Rahm, Jordan Speith, and Phil, with the Spaniard (Rahm) taking home the Green Jacket.
Golf’s Ultimate Shame
Awesome to see Lee Elder hit the ceremonial first tee shot.   Lee Elder was the first Black man to play in the Masters back in 1975.    Shame on Augusta National for not allowing a Black Man to play their tourney until 19-freakn’-75.   Shame on the PGA Tour’s “Caucausian only clause,”  in place from 1934-19-freakin’ 61, that prevented non-whites from competing on the PGA Tour.
Originally Posted on April 8, 2013
Answer to yesterday’s Masters quiz question:
Anthony Kim posted 11

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Fed Heads Talking 4 Percent Inflation

9 days ago

Fed’s Kashkari says he would not panic if he saw a 4% inflation rate-BBG
— LongConvexity (@LONGCONVEXITY) April 8, 2021

The bond market might, however, assuming Kashkari’s  quote is true.
We are reposting a piece, which we recieved tremendous pushback when it was posted.   Now the Fed Heads are climbing aboard.  NK is one of the smartest but a bit of an opportunist, in our opinion.
Wall Street’s “everything is bullish” mantra is why the U.S. stock market cap to GDP is now close 200 percent (almost 50 percent above prior bubble peaks) and why we now see no way out of this rabbit hole but to print, print, print.   And print some more.
Asset valuations are so out whack, the Fed has lost control of the markets.  Just a hint of normalizing rates — a positive real interest rate across

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Getting Back Pre-COVID GDP Levels

11 days ago

Nice chart from Bloomberg. Chile’s almost there, baby! h/t CK

The U.S. may be.

If Q1 GDP grew at an annualized compounded rate of 10.2 percent (2.45 percent q/q), the U.S. economy will back to its pre-COVID end of quarter high of $19.254 tillion set in Q4 2019. GDP in the U.S. probally peaked in mid-February. The Atlanta Fed’s GDPNow forecast has Q1 GDP growing at 6.0 percent. Stay tuned.

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You Sure, Georgia?

23 days ago

“Poor Mexico [Georgia Republicans.]  So far from God and so close to the United States [MAGA.]”  ― Porfirio Diaz (paraphrased)

The Georgia law will make it a misdemeanor crime to give food or drinks to voters waiting in long lines. – Reuters

Gonna get hot, hot, hot for y’all.   

“Then he will say to those on his left, ‘Depart from me, you who are cursed, into the eternal fire prepared for the devil and his angels.  For I was hungry and you gave me nothing to eat, I was thirsty and you gave me nothing to drink,  I was a stranger and you did not invite me in, I needed clothes and you did not clothe me, I was sick and in prison and you did not look after me.’
“They also will answer, ‘Lord, when did we see you hungry or thirsty or a stranger or needing clothes or sick or in

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What’s The Probability Of This Event?

24 days ago

Incredible video. The big unit snares a pidgeon 20 years ago today.

Take a guess on the empirical probabliity? Let’s do a calcuation based on these assumptions:

Very few other occurances of a picther nailing a bird. Let’s assume three in post-War era;Average pitches per game equal 200 per team;158 games per year for each team. MLB season expanded to 162 games from 154 games in 1962;Average number of teams equal 25. Major league baseball currently has 30 teams, compared to 16 in 1960,Seventy years of dataAnd the probability is…..

0.00017168%Passive Investment

I would invest — yes, investment given today’s market madness and new definitions as most trades are now prop bets — $2430 each year ($1 per game) to takedown the $582k payoff. Robinhooders may pay much,

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The Largest U.S. Cities by Population from 1790 to 2020

25 days ago

Interesting graphic.  Watch Detroit and L.A.’s sharp ascent starting in the 1920s, which illustrates the auto industry’s outsize impact on the urban demographics.   Also, San Francisco’s ascent during/after the Gold Rush in the 1850s.
[embedded content]
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Happy St. Patrick’s (Maweyn Succat) Day!

March 17, 2021

Blast From The Past (BFTP).
Originally Posted On March 17, 2012
Happy St. Patrick’s (Maweyn Succat) Day!
St. Patrick, Ireland, St. Patrick’s Day. Simple, right? The man wasn’t even Irish! He was actually born in Britain around the turn of the 4th century. At 16 years old, Irish raiders captured him in the midst of an attack on his family’s estate. The raiders then took him to Ireland and held him captive for six years. After escaping, he went back to England for religious training and was sent back to Ireland many years later as a missionary. St. Patrick was actually born Maewyn Succat, according to legend; he changed his name to Patricius, or Patrick, which derives from the Latin term for “father figure,” when he became a priest.  – Time
The Irish Comeback
Ireland has come a long

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The Macro Factors Driving The Covid Economy In Two Charts

March 8, 2021

Here’s a couple of interesting and surprising charts, which explain what has been driving the COVID economy and why the U.S. economy is set up for monster growth over the next few quarters.
When the economy fully reopens, we suspect a consumer feeding frenzy in many of the services that have been closed or operating at a limited capacity.   We also expect these firms and businesses that have survived will have mucho pricing power given the massive stimulus that has been put into the economy and the forced savings thrust on those whose incomes have not been affected.
Moreover,  capacity in the service sector has been significantly reduced with many businesses forced to close (see chart below).
Personal Income (PI)
Personal income,  which consists mainly of wages and salaries, rental

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Why This QE Is Different In One Chart

February 25, 2021

Robin Hood traders don’t bother reading.
The latest round of central bank balance sheet expansion, which will reaccelerate soon as Biden’s COVID bill is passed, needs some context.
By the way, we did some rough approximations late last night and found the Fed has taken down about 35 percent of the new issuance of Treasury notes and bonds since the end of 1Q20.  As the US Gs deficit exploded again, the Fed had to effectively monetize a big part to keep the Treasury adequately funded without a huge spike in interest rates.
Today’s ugly 7-year Treasury note auction may be a signal that percentage may rise unless rates are allowed to move much higher to entice buyers.
QEs of Christmas Past
Many believed that the last QEs should have led to inflation because the “money supply” would

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Global Fixed-Income Market

February 25, 2021

US Fixed Income Markets vs. Rest of WorldThe U.S. fixed income markets are the largest in the world, comprising 40.0% of the $114 trillion securities outstanding across the globe, or $46 trillion (as of 2Q20). This is 2.0x the next largest market, the EU. U.S. market share has averaged 38.6% over the last 10 years, troughing at 36.3% in 2011 and peaking at 40.9% in 2015. – sifma

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The Global Semiconductor Shortage

February 23, 2021

As the coronavirus crisis reshapes supply and demand, chip companies are scrambling. And if there’s an industry that can’t simply ramp up production in a hurry, or ask clients to do without their product for a while, or shift around parts of their manufacturing rapidly, it’s the chip industry.
Here’s a look at how chips became the “oil of the digital age” – and the geopolitical complications surrounding their supply. – DW News
[embedded content]
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Republicans Attack Dogs

February 23, 2021

Couldn’t decide on the title of this post: Republicans Attack Dogs or Republican Attack Dogs?   Went with the former to mock the SOS from the GOP.  Same MO different President.

It’s not surprising that a man called Saint Bernard once said, “Love me, love my dog” in a sermon. After all, dogs have long been the world’s most popular pet.

But now, the meanies at conservative media giant Newsmax have refused to throw man’s best friend a bone, attacking President Joe Biden’s dog, Champ, in a Friday segment. Host Greg Kelly felt the need to lift his leg and woof on the dog’s appearance, saying that Champ “looks a little rough,” and “needs a bath, a comb, and some loving care,” adding that he looks like he’s “from the junkyard.” – Deadline

Joe Cool is way too cool to take the bait

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Ready For 4 Percent CPI By Mid-Year?

February 9, 2021

Starting to hear lots of talk about inflation these days, something we have been seeing in the pipeline for the past six months.
Input price inflation accelerated to a near-decade high in January. Costs increased to the greatest extent since April 2011, reflecting stronger rises in both the manufacturing and service sectors. This was partly passed on to clients in the form of higher charges, the main factor underlying the steepest rise in output prices for 27 months. – JPMo Global PMI, January

We’ve crunched a boatload of numbers over the past few days.  Sit back and enjoy.
What Deflation?
Since 1957, 888 monthly observations of the Consumer Price Index, there have only been 106 monthly negative prints and only 12 negative monthly prints on Core CPI (excluding food and energy).

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NorCal Women Rising [To Power]

January 27, 2021

Sen. Patrick Leahy (D-Vt.), who is set to preside over the impeachment trial of former President Trump, was taken to the hospital Tuesday, his office said in a statement. 
Leahy, 80, “was not feeling well” in his Capitol office and examined by the attending physician, said David Carle, a spokesperson for the Vermont senator.  – The Hill
Suppose Senator Leahy has to relinquish his duties or retire for health reasons (we certainly hope not). In that case, Senator Diane Feinstein of California (San Francisco) will become president pro tempore of the Senate, third in line to presidential succession.
Think about that, the first three government officials in the line of succession to the presidency will be women from San Franciso, as will be the fifth in line.
Four for five is incredible

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Is Peak COVID In?

January 25, 2021

We think so.  The daily new case curves are turning down and though the death curve will lag for a few weeks, it will also start to turn down soon.
Thank, God, we can see the light at the end of the tunnel.
Back to normal?  Far from it.

In recent days, coronavirus cases have been dropping steadily across the United States, with hospitalizations falling in concert. But health officials are growing increasingly concerned that quickly circulating variants of the virus could cause new surges of cases faster than the country is managing to distribute Covid-19 vaccines.
…“We’re definitely on a downward slope, but I’m worried that the new variants will throw us a curveball in late February or March,” said Caitlin M. Rivers, an epidemiologist at the Johns Hopkins Bloomberg School of Public

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The Trail of Two GOATs

January 23, 2021

H/t Carol K.
The following video was really touching and reveals the divergent path of the two GOATs.  Can there be two GOATs?  See the tables below.
One, facing retirement, seems to be dealing with the reality by playing catch with his kids for what might be the last time as an NFL player on his home field.   The other, most likely on his way to his 10th Super Bowl and 7th World Championship but gotta get through Aaron Rodgers and Cheeseheads first.
Long Tom Brady.

As Tom Brady and Drew Brees hug and say goodbye after a long talk on the field, Brady throws a touchdown pass to Brees’ son. One walks off to play in the NFC championship, the other stays to play with his kids.
— James Palmer (@JamesPalmerTV) January 18, 2021

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Presidential Stock Market Returns

January 22, 2021

Comparative presidential stock market returns are  always interesting and makes for good political fodder but pretty meaningless.  I am not arguing policies don’t matter but the initial conditions or valuation when a president takes office has, in the past, seemed to matter the most on how the market does during that president’s term.   Context, baby.
President Obama,  for example inherited a collapsing stock market, which bottomed about 7 weeks after he took office.  Bush #43  inherited the bubble, which began to collapse about nine months before he took over, and then existed office with a collapsing credit bubble, handing the Great Financial Crisis (GFC) off to President Obama.
Trump took office with record high valuations and commenced to pump the market higher with his

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The Best MLK Weekend Of All-Time

January 16, 2021

We are reposting this for the holiday and in honor of Dr. King, one of our greatest Americans, a patriot, and a true saint.
I exchanged emails with Reverend Senator-elect Raphael Warnock after posting it.
Originally Posted on January 21, 2019
During my Lehman days as a bond strategist, the firm’s research group would do a January roadshow in many of America’s major cities to present our ideas to institutional investors.   One particular year, we were in Atlanta at the end of the week and scheduled for another “greatest show on earth” in Chicago the next Tuesday.
A Weekend In The Peachtree Hyatt
Rather than flying home to New York, I decided to stay over in Atlanta and migrate north on Monday evening.   It was MLK weekend and I wanted to attend services at the Ebenezer Baptist

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Comfortably Numb: Are We There Yet?

January 15, 2021

Almost there, baby?  Markets certainly are.

OKJust a little pinprickThere’ll be no more aaaaaaaah!But you may feel a little sick – Pink Floyd

Hard to say what the pinprick will be. 
My bet is higher inflation and higher interest rates.   
On the other hand, it could be a form of Structured Criticality.  Just one more grain of sand will be all it takes to trigger the avalanche.

Structured criticality is a property of complex systems in which small events may trigger larger events due to subtle interdependencies between elements. This often gives rise to a form of stratified chaos where the general behavior of the system can be modeled on one scale while smaller- and larger-scale behaviors remain unpredictable.
For example:
Consider a pile of sand. If you drop one grain

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Peak Euphoria & Bat Shit Crazy Markets

January 13, 2021

[t]here is no denying that there’s been a shift in market structure over the past few years. Whether it be in the proliferation of free trading platforms, the rise in market share of passive investment strategies, or the ease with which social media can fuel speculative manias further, it does feel like something is different. – FT Alphaville

Yikes, “it’s different this time.”  
Same words to rationalize another bubble,  different rodeo.

Hey all you cool cats and kittens,Carole Baskin mentioned penny stock Zomedica $ZOM in a video last week.Since, it’s up 230% and yesterday more than 1 billion shares traded— Sarah Ponczek (@SarahPonczek) January 12, 2021


I will also tell you my definition of success for a bear market call.

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My Two Most Enduring Memories of Tommy Lasorda

January 13, 2021

I have to share with you two of my favorite and most enduring  memories of Tommy Lasorda, who passed last week.  In earlier posts, I have written about my Walter Mitty life growing up in L.A. as a kid working for the Los Angeles Dodgers.
Tommy was the Dodger’s third-base coach and later manager when I worked for one of baseball’s most legendary teams.   He was loud, entertaining,  larger than life, and was a master and very good at his craft, which would eventually land him in Cooperstown, home of baseball’s Hall of Fame.
Tommy was always ready, able, and willing to put on a good show in The Show.

1) The Benedict Arnold Show
I had just left the Dodgers during mid-summer of my gap year.  Taking a gap year was not very common back then.  USC wasn’t exactly kicking down my door with

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QOTD: Algos Exploiting Tribalism

January 12, 2021

QOTD = Quote of the Day
I’ d like to think that this is the beginning of the end of Big Tech as we know it. I think this is another example that when you have algorithms that are profit-driven, and these algorithms are different, and figure out the tribalism, and dividing us, is very profitable. And it ends up in an overrun or a seizure of the U.S. Capitol. – Prof. Scott Galloway, NYU
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The Moment I Knew America Was In Trouble

January 12, 2021

We are reposting a piece from June 1st as we were very concerned about the stability of the American Street and where the country was headed.  We were worried about a future full of “peril,” and after the events of last Wednesday, some of which illustrated below,  the times are now pretty damn perilous.
The mob came to hang the Vice President.  

[embedded content]
Originally Posted on June 1, 2020
The Conversation:  When I Knew America Was In Deep Shit 
In early February,  I drove to San Diego to attend a trade show.  I stayed overnight in the beautiful beach town of San Clemente, the home of President Richard Nixon’s Western White House.
I awoke on Super Bowl Sunday and headed down to the ocean to grab some breakfast before driving down to San Diego to pick up my good friend and

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Inflation Cometh And So Is A Big Market Correction

January 11, 2021

It was hilarious, no, sad actually, to see a piece last week by some market strategist mocking the “inflation truthers.”   Kind of like “election truthers?”
Of course, he surely knows the one thing that can knock the markets on their ass and keep them down is accelerating inflation.
Guess what, folks?  It’s here.
I just finished reading through at least 50 country PMIs (purchasing manager index) and almost all report accelerating inflation due to supply shocks and higher demand.  It’s not just a weak dollar thingy.

A positive second derivative of prices will tie the Fed’s hands in rescuing the market for the umpteenth time, and this dude, no doubt realizes, his year-end bonus would suffer.  Just sayin’.
Man, I dig Upton.

Call me a skeptic, because I am, and a contrarian, because I

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Straight Flush: The Taiwan Straight Beats The Straight Of Hormuz

January 8, 2021

As the stock market and the FOMO chasers remain unhinged from reality (3 standard deviations above mean valuations) about as much as the crowd we watched in horror invade the Capitol yesterday, it’s time to revert to a fundamental story that is consistent, logical, and will probably make you some money that you will be able to keep and bank over the medium-term. No, not Bitcoin.
It’s also an interesting story full of geopolitical intrigue.  We will keep it short and sweet with some pictures.
Short Straight Of Hormuz
The U.S. didn’t import any Saudi crude last week for the first time in 35 years, a reversal from just months ago when the Kingdom threatened to upend the American energy industry by unleashing a tsunami of exports into a market decimated by the pandemic. – Bloomberg,

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Top Emerging Tech Trends In 2020

January 5, 2021

As we look to 2021 and the anticipated global economic recovery, we see continued interest in topics related to emerging business risks, digital transformation and cybersecurity. As a result, integrated risk management (IRM) topped our list in 2020.
We also continue to see increased interest in the wider adoption of digital technologies to support an employee base that is now physically separate due to stay-at-home mandates across the globe. Technologies such as smart spaces, digital risk management (DRM), secure access service edge (SASE) and zero trust network access (ZTNA) are emerging as critical needs in this new working environment. – Gartner

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