Happy Fed week everybody! Or is it unhappy? Either way, we can all agree that the Fed's fight against inflation is starting to look like the The Battle of the Morannon in Lord of the Rings, except without the help of the ring being destroyed. Other facilities are being used in efforts to tame inflation, especially the unwinding of the balance sheet, but it all begs the question: what's the point? Find us on Twitter, Instagram, & Facebook @DRUNKENOMICAL Merch: drunkenomics.myspreadshop.com Pa...
May 01, 2024•54 min
So...if you've been paying any attention to the markets lately, you might've noticed that there has been some major volatility lately. Most of this can probably be explained by the recent hawkish Fed posturing that took place back in the first week of the month. Though this outlook didn't come as a huge surprise to us, the bond markets seemed to be totally caught off guard as bond yields shot up; even in the high quality space. I guess it's a good time to pour ourselves a stiff one... Find us on...
Apr 18, 2024•49 min
It's pretty easy to have a robust economy and inflated housing market when the government deficit is still running rampant and has no real signs of slowing down. Additionally, core inflation has been revised upward, likely indicating that the Fed is slightly further away from their goal of taming inflation. But while we're here, cheers to the middle class. Find us on Twitter, Instagram, & Facebook @DRUNKENOMICAL Merch: drunkenomics.myspreadshop.com Patreon: patreon.com/drunkenomics Stay Drun...
Apr 04, 2024•53 min
And not the corporate kind, but the kind as tax payers to the government. Anyways, more & more data is suggesting that the broader economy is resilient, giving the Fed no reason to lower rates (as we've seen today). However, as the debt maturity wall approaches, the Fed or Federal Government may be forced to take on other easing measures to mitigate some debt reinvestment risk from the maturity wall. Granted, any of their solutions usually always leads to more problems or higher taxes, which...
Mar 21, 2024•43 min
AI Optimism has certainly led to some unusual price action in the stock markets. As a result, it seems as though the volatility skew has flipped on its head & shifted over to the call side of the options chain, driven by FOMO. But while we're still talking about AI, is this something that's even actionable? How long will it take to implement? And does it have the potential to wreck the consumer base? Find us on Twitter, Instagram, & Facebook @DRUNKENOMICAL Merch: drunkenomics.myspreadsho...
Mar 07, 2024•53 min
The Fab Four/Mag Seven, as we all know, has really spearheaded the recent strength and momentum in the major markets. But could there potentially be some risks or external factors that could potentially arrest their momentum? Well, of course there are; but on the other hand, they could also not ever come to fruition. Also, retail sales number for January are noteworthy; you get a chance to look at them yet? Find us on Twitter, Instagram, & Facebook @DRUNKENOMICAL Merch: drunkenomics.myspread...
Feb 22, 2024•49 min
So...we've been on our good news bears train for a bit now; but with recent economic data released along with us all surviving the first Fed week of 2024, we may find ourselves back in a situation where good news is bad news. With numbers coming in strong, this leaves the Fed more room to be hawkish (which is what I meant at the 30min mark when I misspoke), meaning tightness around financial markets. Also happy almost S&P 5k. Find us on Twitter, Instagram, & Facebook @DRUNKENOMICAL Merch...
Feb 08, 2024•46 min
As we approach a unique business cycle where the economy is seemingly strong despite inflation pressures, the walls may seemingly be closing in as this giant debt maturity wall approaches. Economists believe this may compel the Fed to step in, but who says that's even within their job description. On the bright side, markets as a whole seem optimistic about the massive cash balance still left on the sidelines... Find us on Twitter, Instagram, & Facebook @DRUNKENOMICAL Merch: drunkenomics.mys...
Jan 25, 2024•51 min
Welcome to 2024 everyone, hope you all had a great holiday season! Because we have yet to see any sort of "landing" in 2023, hopefully we can see a good economic resolution and turning point in 2024. Either way, we're still on our good news bears train because why not. But with the bulk of cash uninvested on the sidelines along with the Federal reserve potentially cutting rates a few times this year, we could be ok. At least I hope so :) Find us on Twitter (X), Instagram, & Facebook @DRUNKEN...
Jan 11, 2024•43 min
Another December to remember thanks to this post Fed Santa Claus rally. However, tensions in the Middle East brewing could finally get us off our Good News Bears train. In any event, it's been a great year y'all! Loved drinking with you guys & we'll see you again in the new year! Cheers, Drunkenomics
Dec 22, 2023•45 min
Welcome to probably the last big week of the year in terms of economic data being reported. With CPI and another Fed meeting coming out this week, we decided to remain cheery as we head into our holiday season. All that being said, we remain in the camp that a lot of economic troubles are easing due to economic and consumer resilience; which means the Fed will most likely not waver in terms of their hawkish posturing. But, more to come as we head towards the last presentation of the year! Cheers...
Dec 14, 2023•47 min
First off, hope you all had a great week off; also, we had to amend some things we said after a few drinks last episode. Something about IRA's being tax-sheltered. Anyways, with all the doom news going on, we had to provide some good news to talk people on the consumer level off the ledge. However, there are things to be concerned about. Although, for the most part, the economy is in pretty decent shape. So cheers to that. Find us on Twitter, Instagram, & Facebook @DRUNKENOMICAL Merch: drunk...
Dec 07, 2023•43 min
It's Thanksgiving already?? I guess with time flying so fast, we all could probably have a dram to retirement plans and ways we can make sure we're financially stable when we get to that point in our lives where we think about how time flew by so fast. Therefore, we had some gravy backs to the three pillars of retirement along with the current state of Social Security. No need to repeat this at the dinner table this week unless you really want to... Find us on Twitter (X), Instagram, & Faceb...
Nov 23, 2023•58 min
There you have it; CPI came in slightly lower than expected, but Fed posturing still implores the economy to put up with a "higher for longer" environment. With that, a shower thought I had recently made me think about the millennial plight; being that we are by far the most indebted generation with not only our own debt to service, but also the debt of the extremely fiscally irresponsible federal government. And the interest expense on that will be other worldly. Find us on Twitter (X), Instagr...
Nov 16, 2023•49 min
Happy week after Fed week everyone! Hope you were all able to recover swiftly from your hangovers this last weekend because this US Government balance sheet is nothing but sobering. Upon viewing the Fed day interview with Jeff Gundlach on CNBC last week, it looks like the US consumer along with the US Government has a serious debt problem that a "higher for longer" attitude will only add fuel to the implosion. Not trying to call wolf...just saying... Find us on Twitter, Instagram, & Facebook...
Nov 09, 2023•49 min
Well, the Fed decision is out now; looks like the tone and stance of the Fed is still pretty hawkish pending some sort of major economic catastrophe. But the main question now becomes: when does the Fed their terminal rate? Also, when will the Fed officially begin lowering their effective rate? Seems like money managers all over the world are trying to get a pulse on this. That and the UAW strike. Find us on Twitter, Instagram, & Facebook @DRUNKENOMICAL Merch: drunkenomics.myspreadshop.com P...
Nov 02, 2023•53 min
Well...at the time this episode was being recorded, there was still a 'speakerless House.' Of course, in an uncharacteristic fashion, they managed to elect a speaker in Mike Johnson within a day of this being recorded; but congrats on getting something done finally. Most of our drams this week, however, was consumed to the discussion of which broad asset class might outperform in the next 12 months (not financial advice) given the headwinds and tailwinds we're seeing along with what the talking ...
Oct 26, 2023•43 min
I guess...having a 'speaker-less' house is pretty fun. It's at least funny to observe the kind of clown show we have at our nation's capitol. In case you missed it, Kevin McCarthy was ousted a couple weeks ago from his speakership position and Jim Jordan was the front-runner to fill the void. But somehow, even his political weight can't get him voted in. Then of course, we had a pretty solid inflation print that was spearheaded by rising energy prices. Let's see if the Fed will try to take matte...
Oct 19, 2023•48 min
CPI data, Fed forecasts, Job Numbers, those are all important figures to pay attention to in terms of global macroeconomics, but it pales in comparison in total importance at times. In case you missed it, there was a very tragic war that broke out in Israel this weekend. Although there are some economic implications, it pales in comparison to the human cost taking place and the human right violations being executed by the terrorist organization that is Hamas. So pardon us for being a day late an...
Oct 13, 2023•1 hr 1 min
Welp...we've officially made it to the last quarter of the year; and what a year it's been. Because we're all awake now that September has ended, we can expect to see CPI data come in similar to the way energy stocks performed last month. If you were asleep for the month like Billie Joe of Green Day, I'll fill you in and let you know that energy, particularly oil, had quite a run; which means, I'm not feeling optimistic about inflation data. Also, happy trails Kevin McCarthy. Find us on Twitter,...
Oct 05, 2023•54 min
As the Fed President has mentioned in his presser today, the economy still has yet to see the affects of the tightening monetary policy from last year. Pair that with employment and inflation data that just came in, it shows that the Fed potentially still has room to enact further tightening. Granted, equities and especially fixed income markets are begging for some relief; which means this tug of war will probably result in absolutely nothing happening in Washington this week. Find us on Twitte...
Sep 20, 2023•45 min
I'm beating myself up for not coming up with the question earlier...but why is the Fed so obsessed the the 2% inflation rate? Historically, inflation has seen an average rate of about 4%. Granted, that does include some difficult cycles of price increases; but that accounted for, is that 2% target rate worth achieving even if it does crater the economy and wage growth? Also, what's this I hear about capital requirements going up? Find us on Twitter, Instagram, & Facebook @DRUNKENOMICAL Merch...
Sep 14, 2023•52 min
It seems like the weeks spend digesting the Jackson Hole Symposium turned out to be a real bummer. The Street pretty much decided to focus on the Fed's commitment to that 2% target inflation rate and could see plenty of hurdles we need to navigate to get there. Additionally, we also wanted to talk a little about Treasury Inflation-Protection Securities aka TIPS. It's kind of a foreign subject to some people in terms of how it works, so wanted to discuss how it fits in the world of floating rate ...
Sep 07, 2023•51 min
Well so much for that market euphoria. A lot of market observationists were really expecting a Fed victory lap at the Jackson Hole symposium after CPI came in under the Fed Funds rate for multiple consecutive months. However, Jerome Powell expressed a much different sentiment, saying in his speech that their job is far from over and that they're still aiming for that 2% inflation target. Not the worst outcome given that no one's feeling good about the economy; however, not the best outcome since...
Aug 31, 2023•55 min
As we continue to harp on China for producing less than promising economic data, we also need to observe some promising economic data here in the U.S. With CPI coming in at below 4%, the idea of a soft landing achieved is certainly not off the table. Granted, the idea of a looming rolling recession still hovers over this economic environment, but there's certainly less reason to be scared. However, across the Pacific; the narrative drastically different. China's economic numbers seem far less th...
Aug 17, 2023•51 min
Some very surprising economic data overseas came in earlier this week; but for sake of continuity, lets start with last week. Tech earnings coming in strong (for the most part) furthered echoed the resiliency of the U.S. consumer base. From there, JOLTS and non-farm payrolls came in weaker than expected giving way for the Fed to potentially pivot; combine that with credit card debt reaching all time highs, you might have a decent story as to why the U.S. consumer still has some fire power. Last ...
Aug 10, 2023•42 min
It finally happened (again). U.S. Government long term debt has been downgraded from AAA to AA+, meaning the ratings agency are at least suggesting some sort of default risk for U.S. Treasuries. In case you're thinking that it's a byproduct of aggressive interest rate hikes, Fitch cited poor governance, political polarization, and a spine chilling (my word choice) government deficit. On the bright side, AA+ bonds *historically* have a low chance of defaulting on coupon & principal payments; ...
Aug 03, 2023•51 min
Yeah...I know I flipped the classic quote from the brilliant French Economist, Jean-Baptiste Say; but in many cases, this is also true. When supply shocks in an economy take place, they offer producers or consumers the opportunity to take advantage of advantageous price points. However, those price levels eventually spearhead the return to a good price equilibrium. With Russian disrupting Ukrainian exports, we might get front row seats to another supply shock again. Also, happy Fed and tech earn...
Jul 27, 2023•51 min
I know debt that is about to default (or is already in default) is certainly less attractive that a damsel, but it is certainly distressing. Which is why we decided to pour one out this week to the corporate bankruptcy surge we saw in the month of June. However, we did spend some time at the beginning answering some questions in our discord about various asset classes and unionization. Speaking of... Find us on Twitter, Instagram, & Facebook @DRUNKENOMICAL Merch: drunkenomics.myspreadshop.co...
Jul 20, 2023•1 hr
So the S&P almost breached 4500 last week and it's still hanging out around it's 52-week highs. On top of that, a lot of market 'experts' on CNBC and Bloomberg have suggested that the price action isn't euphoric and that there is substance to this kind of equity valuation. A lot of the optimism, however, doesn't seem to want to remove any blinders to the fact that the Fed is still in it's tightening cycle along with some major issues in the world's second largest economy: China. So in other ...
Jul 18, 2023•50 min
