"The pen is mightier than the sword." "The great unwashed." "Pursuit of the almighty dollar." These are prhases we have all heard and they come from a single source: 19th century English writer and politician Edward George Earle Lytton Bulwer-Lytton. Bulwer-Lytton was a successful novelist, poet and playwright. His political accomplishments included nine years in Parliament, serving as the British Colonial Secretary, and being offered - AND TURNING DOWN - both a lordship of the Admiralty AND the Crownship of Greece (i.e. king)! Today he is remembered for writing... the worst opening sentence in the history of the English-speaking peoples:
"It was a dark and stormy night; the rain fell in torrents — except at occasional intervals, when it was checked by a violent gust of wind which swept up the streets (for it is in London that our scene lies), rattling along the housetops, and fiercely agitating the scanty flame of the lamps that struggled against the darkness."
Episode 54 reviews articles by Jeff Snider covering: the Treasury inflation-protected securities curve inverting, the life span of a post-2008 reflation, the curious appreciation of the Chinese currency, as well as how Fed officials in 1937 convinced themselves of an impending inflationary storm (in the middle of an economic depression). None of those articles open in the Bulwer-Lytton style -- precisely the opposite! And yet many - some, a few... someone... And yet this podcaster wonders, how might a Eurodollar University educated author open their novel?
It was a dark and stormy depression; bank reserves fell in torrents — except at occasional intervals, when they were checked by a breath of reflation which swept up economists (for it is in the Eccles Building that our scene lies), rousing along the academics, and fiercely inflating the faith in a recovery that struggled against the darkness.
-------SUMMARY------
PART 01: The US Treasury inflation-protected security curve has gone upside down. Indeed, it has NEVER been more upside down. What is the Treasury market telling us about the economy's prospects? Also, how long does reflation typically last? Are we closer to its beginning or end?
PART 02: The appreciation of the Chinese yuan against the American dollar has paused. A survey of the Chinese services sector scored a historic low. Are these the first indications of an economic slowdown? A slowdown that is not only Chinese but global?
PART 03: In 1937, like now, circumstantial evidence and biases of central bankers suggested the impending arrival of fierce inflation: huge government deficits, better economic statistics, rising bond yields and excess bank reserves. Yet the underlying condition was of depression and credit illiquidity.
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--------REFERENCES--------
TIPS Tipping Over, But Not That Way: https://bit.ly/3sVqgh4
Reflation Amplitude, Important, What About Frequency?: https://bit.ly/2MSUa68
What If CNY’s Backdoor Still Isn’t A Big Enough Exit?: https://bit.ly/3uT06Nw
There’s Two Sides To Synchronize: https://bit.ly/3cm1j7R
There's Precedent for Yellen Demanding a Central Bank Rescue: https://bit.ly/3qoUQxF
Alhambra Investments Blog: https://bit.ly/2VIC2wW
RealClear Markets Essays: https://bit.ly/38tL5a7
---------WHO-----------
Jeff Snider, Head of Global Investment Research for Alhambra Investments with
Emil Kalinowski, a dark and stormy host. Art by Master Quillsman,
David Parkins. Podcast intro/outro is "
Nocturne" by
Trevor Kowalski at
Epidemic Sound.