This Friday’s non-farm payroll report is more important than normal. With the Fed in single-minded pursuit of half their twin mandate (maximum employment), the stable prices objective is receding. The recent stalling in the bond market sell-off doesn’t correspond to equanimity over inflation. Declining real rates have accompanied the drop in nominal ones. In April, […]
One of the most important questions for investors is whether interest rates will remain low. Persistent paltry yields still aren’t fully explained. Inflexible investment mandates affecting trillions of dollars are a partial explanation. For example, the equity risk premium favors stocks sufficiently that it’s possible to replace a ten-year government bond with as little as […]
Last week Kinder Morgan (KMI) reported earnings, which included around $1BN in one-time gains from the Texas power outages in February. Natural gas prices increased briefly by more than 100X. KMI had natural gas available, so profited from selling it to power companies who had commitments to meet. Energy Transfer (ET) is expected to report […]
The ascent in lumber prices is the most spectacular of many commodities that reflect the pandemic recovery. Recently a general contractor I know lamented that the wood for his typical newbuild construction had doubled over a few months. High lumber prices are not only caused by booming suburban real estate markets — new household formations […]
“Coiled, ready to go.” is how JPMorgan CEO Jamie Dimon described consumers last week. “Consumers have $2 trillion in more cash in their checking accounts than they had before Covid.” he added. Borrowers are in such good shape that JPMorgan reported a 4% drop in loans when they released their quarterly earnings. Stimulus cash is […]
What if CO2 emissions could be captured before they entered the atmosphere? Sulfur dioxide is already removed from the emissions of coal-burning power plants. Why not CO2 from burning natural gas for power, steel or cement production? The endless hype over solar panels and windmills, overstating their competitiveness, downplaying their intermittency – none of this […]
Public policy is becoming more important to energy investors. Democrats now own the climate change issue. The desire of progressives to advance a world of solar panels and windmills is confronting pragmatists who’d like to keep the lights on. Rising oil and gas prices are helpful to the energy transition, by improving renewables’ competitiveness. But […]
Our blog post on Sunday, Why Goldman Unsurprisingly Avoided Archegos Losses drew a wide range of comments, both on social media and via direct emails to me. Many observers dislike Goldman – their continued success and adept avoidance of mistakes made by others leads to grumbling of sharp practice. I recounted an experience of my […]
Goldman almost always sidesteps trouble. That’s one of the conclusions from the Archegos blow-up that is estimated to have cost the firm’s lenders as much as $10BN. Imagine the discussion among Credit Suisse, Nomura, Morgan Stanley, Goldman Sachs, UBS and Wells Fargo as they considered an orderly liquidation of the hemorrhaging Archegos portfolio. It was […]
We recently bought a summer house for our family on the Jersey shore. This was not a unique impulse on our part – it is a seller’s market in the worst way imaginable. Having begun our search calmly with no intention of being rushed, we were soon in a bidding war which we “won” — […]
