And then the groundhog puts the chocolate in the aluminum foil …

I want to be objective. I don’t care that we don’t “know” and that we try to guess and that by guessing, we end up talking nonsense. But the fact that we deliberately say something while trying to appear intelligent still bothers me a little. And there one gets the very impression that certain “experts” in the world of finance no longer know how to make themselves known, that they manage to say everything, so much so that they do not even become anyone. Yes, yesterday we had the inflation data and frankly there are some, they would close it, they would give us a vacation.

The audio of April 13, 2022


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Higher and higher

So yesterday, government authorities released inflation data. We won’t lie to each other – it’s disgusting. The annualized rate is 8.5% and overall we haven’t seen it for 40 years. It’s pretty much the same speech we’ve had every month on the subject since Powell realized that inflation was really out of control and that the transient was just a fantasy left to him for a long time that people who haven’t. experienced COVID cannot experiment.

Like every month and every CPI publication in the US, everyone raises their arms and runs in all directions screaming, “Oh my GOD, oh my GOD”, they scream it so loud and so often it seems like Kim Kardashian discovers a makeup box free in your inbox. A free box of tricks and a million dollar check to slip into a 12-second video on Instagram because influencers are so cool.

Opinions and opinions everywhere

And like every month, we are entitled to a whole series of comments, one smarter than the other. So clever that we never get tired of playing them over and over again, it’s so useless. First of all it should be remembered that even if the figure was once again “terrifying”, with this 8.5% announced, the markets started to rise because, I quote:

– “Comments from US central bank officials – more commonly known as: the Fed – were less worse than expected. “

To put it simply, since we didn’t witness Lael Brainard or Jerome Powell suicide live, we figured it would be okay. And then, at the same time, ten-year yields went down and stocks went up. Finally, “stocks are up” until yields go up and stocks go down, applying the good old concept of communicating vessels.

If you are looking for a reason why and how we got back to the cellar, you need to look for the reason on Lael Brainard’s side. The right arm, or the left arm of Jerome Powell, I don’t know, expressed itself in the wake of the CPI data saying that “we must fight ‘promptly’ against rising inflation”.

NO JOKE ?????????

No but seriously ??? NO JOKE ????

Inflation at 8.5%, oil that took 800% in 24 months, gas supply that became so expensive you have better time to put 12-year-old Armagnac in your tank, cereals which are getting so expensive that in the morning you want to go and eat a whole wild boar rather than Frosties … And the other comes along saying with floured face:

“We must act quickly against rising inflation” – is such a stupid claim that it appears that Macron’s communications department wrote his speech to him and it was then verified by Valérie Pécresse’s press team, then billed by McKinsey .

And that’s not all!

On the other hand, the good thing is that in the wake of Brainard, we still had the right to unheard-of phrases like a portfolio manager saying that:

“Fed Official Comments Are More Cautious Than Markets Expected”

As I understand it, “acting quickly” is prudent. If, on the other hand, he had said “man, it’s too high, we’re all going to die”, would the market have taken it less well? Is that what we call “market psychology” ??? No, I’m asking you because I’ve only been doing this job for 30 years, so I learn every day.

The seers

And then there were the visionaries who come to share with us their “saccoro” and their visions of the future so precise that we feel as if they have spent the weekend at Doc Emmet Brown’s to test the DeLorean. Among them was Peter Cardillo of Spartan who said that:

“Inflation will last for a while, but we could see a drop in the summer months, as long as there is a drop in agriculture and energy prices.”

Okay, right?

We could have less inflation if consumer goods became cheaper. It is impressive as a reflection. It’s a bit like telling yourself that if you pedal less hard, you will go slower. Or otherwise. But hey, kids get paid millions a year to get us out of stuff like that and then we’re surprised the markets get completely stupid. But this without counting another mythical phrase of the day. I won’t give you his author, because it’s a waste of time, but he said:

“These CPI numbers are fueling the upcoming interest rate hike in the US, the FED cannot stand by. “

There, I confess, I am speechless. I don’t know how to fight anymore and above all I don’t know how these guys still have the courage to say a word, since it seems that saying something intelligent has become forbidden. At this rate, you could also go to finance the Cyril Hanouna set, it will be just as credible. Because at that price, you might as well get the opinion on the upcoming rate hike from a young lady who attended the “Marseillais dans le 9-3” who has the IQ of a spoiled mussel.

No, but the guy is a financier who went to Wharton or Harvard, to come and tell us that if the CPI is strong, the FED can’t stand and watch … I if I’m his father and I’m the one who paid for it. my studies, I demand that you repay me immediately.

In summary

If I summarize what happened yesterday: the CPI is too high, inflation is unmanageable, the FED is naked and will have to raise rates by 0.5% as we have been told for about 6 weeks. We are also incorporating the fact that the Fed will likely have to raise rates by 0.5% at each meeting at least until the school year begins. Something we have been told for about 3 weeks. And then, to conclude, let’s also admit that, given the situation we find ourselves in, it is more than likely that the Fed took too long to raise rates and that we will have to work double if we are to hope not to be slaughtered by runaway inflation. .

Inevitably, in this kind of situation, the markets have fallen, but not too much. Not too much because, to be honest .. Between you and me … who is surprised by these numbers? Yes, in fact, none. Because it has ONLY been talked about for weeks and we spend our time hesitating about inflation and the color of Powell’s socks every time we testify before Congress. Yes, THERE IS NOTHING NEW UNDER THE WALL STREET SUN, THE SAME AIR IS BREATHED AGAIN AND AGAIN. I also think that if someone manages to plant a wind turbine in Battery Park, there is a good chance that they will be able to meet the energy needs of a country like Switzerland for the next 22 years.

Still a moderate decline

The global stock exchanges were therefore all down a few points because we knew that everything we were being told was not really new and that we just had to process it one more time and admit that rates would go up a lot in the next few days and that would have us. made everyone weird. Also of note is the fact that the US housing market appears to be slowing quite markedly. With mortgage rates having risen a little too much lately, it’s suddenly a lot less fun when you REALLY have to pay to borrow money to pay for your home.
We also remember that oil is back above 100 dollars. At $ 101.11 to be exact. The barrel went up for a rather crazy reason, which we REALLY didn’t see coming:

– the fact that it would not have been easy to replace the missing barrels of Russian oil.

OPEC announced yesterday that it would not be easy to find the 7 million barrels a day that was missing and that the deal with Iran appeared to be far from being concluded. Who is a surprise “monster”, knowing that he has been skating in semolina with Iran for years and that the local management seems moderately accommodating, we should not have believed that he would have been satisfied even with the French presidential elections with all the suckers like Sarkozy or Jospin who show up to say Brigitte Macron’s toy boy is best for France and then we’ll have a picnic together to celebrate.

Oil at $ 200, turnaround and next collapse

No, the oil exploded yesterday, goes back above 100 dollars and enters the “danger zone” again, as they say in Top Gun. It was also an opportunity for Jeff Gundlach, who has been announcing an accident every three weeks for months. Gundlach took the opportunity of the inverted yield curve to go back to explaining the theory and announcing that the end of the world is quite near. I’m also pretty worried, we haven’t seen Nouriel Roubini with his new theory about the disappearance of dinosaurs and world stock exchanges yet.

Asia is already reversing the trend this morning, as the Fed is not that aggressive and the rate hike comes at a good price. Japan regains 1.6% to compensate for what was stuck in the teeth in the last 3-4 sessions. China and Hong Kong do nothing because COVID … But today no one cares about COVID, because what is COVID alongside rising rates, uncontrolled inflation and the fact that Valérie Pécresse is ruined. There is also a lot of talk about Bitcoin which is on the brink and that if it breaks the $ 40,000 downward, it reaches $ 30,000 according to Fibonacci, MACD, RSI, Stochastics, Warren Buffet, Peter Thiel and Ignazio Cassis.

Daily News

In the good news, Putin believes the peace negotiations in Ukraine are hopeless and go straight to the wall. He portends a beautiful Easter truce and I think the pope can keep his request behind his ears. There are also some people who wonder what Lagarde will do for the ECB, knowing that if the FED is overdue, the ECB is likely stuck in the days when Elvis Presley was driving the crowd crazy with his sweet blue shoes. .

And then, otherwise, we will focus on the quarterly numbers that will start hitting our tickers, hoping that they will allow us to deviate a little from the inflation theme and from the views of gurus and other central bankers.

Numbers and futures

Futures have risen 0.5% so far and we are awaiting data from BlackRock, JP Morgan and Delta. On the macro side, this afternoon is the PPI figure, a figure that is upstream of the CPI. So if it starts to fall it will only be happiness, but when we hear what we hear I would say it is not won.

Have a nice day and see you tomorrow for new adventures. Tomorrow I will explain how to make lukewarm water.

See you tomorrow !

Thomas Vellet
Investir.ch

‘Great minds discuss ideas; common minds discuss events; little minds discuss people. “

Eleonora Roosvelt

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