Below are some of the most interesting things I came across this week. Click here to subscribe to our free weekly newsletter and get this post delivered to your inbox each Saturday morning.
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Tom McClellan notes, “Oil prices are starting upward again after a pullback, and this is going to be a much longer uptrend. That is the message of gold’s 20-month leading indication shown in this week’s chart.”
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Huw van Steenis writes, “Goodhart’s contribution is not his rejection of models, but his constant questioning of what they’ve left out. At turning points in the economy, the outcomes are determined by the institutions, fiscal constraints, failures and demographic forces that models struggle to capture.”
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Benn Steil reports, “global reserve accumulation has slowed sharply since the early 2000s, when emerging-market central banks were rapidly building their dollar stockpiles. The upshot is that the issuance of Treasuries needed to finance US debt has been outpacing the demand of these once-reliable price-insensitive borrowers.”
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Jim Paulsen notes, “during the last 76 months, the U.S. stock market has outperformed U.S. bonds by an almost 28% average annualized pace – the biggest outperformance of stocks above bonds in 100 years!”
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Finally, FT Alphaville muses, “long-dated binary outcomes of incalculable extremes are protecting a broad subset of investors from multiple compression. And it’s in the mandate of those investors to do whatever it takes to preserve their valuation marks — including, apparently, by confessing in advance to involuntary manslaughter.”
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