Perspectives

In the aftermath of the Presidential Election, we wrote a piece discussing some of the economic challenges facing the Biden Administration, and how Biden’s actions may stir inflation and create sets of corporate winners and losers. Now that the Biden team has started to implement its agenda, we thought it would be interesting to revisit these issues.

In the aftermath of the Great Recession, governments have actively depressed bond yields and inflated bond prices.  Unfortunately, most market manipulations ultimately meet a messy end.  If and when this particular manipulation goes the way of all flesh, yields will rise and bond investors will lose money.  Bonds would stop being effective investment instruments, and become “Certificates of Confiscation”.

Unlike Scrooge’s deceased business partner, Marley, we don’t believe that inflation has met the same fate.  It is subdued, but lives.  Despite the contentions of Modern Monetary Theorists (MMT), we disagree that the US can continue printing money without consequences.

In the aftermath of the November elections, we thought it worthwhile to revisit the economic and market risks Biden is facing. Plus, The pandemic is far from over, but COVID’s shattering effects on consumer behavior will be with us for a very long time to come.

Stock market and economy disconnect? The consumer is defining reality. Plus, Apocalypse Soon, Part II. Can central banks continue to “manage” inflation?

Apocalypse soon? In the current environment, there clearly is nothing resembling certainty.  But the probability of seeing stagflation this decade is increasing.

Is globalization on the rocks and can the U.S. decouple from China? Also, what ways can you and your board take advantage of distressed corporate situations?