I believe that an understanding of money, the financial system, and the Fed is essential to understanding markets. As you will see below, this expertise has been successful in making actionable predictions. This blog aims to improve your understanding on those topics.
First, I help you understand the mechanics of the monetary system. This includes foundational topics like quantitative easing and quantitative tightening, to advanced topics like the moneyness of Treasuries, to more nuanced subjects such as the leverage and liquidity regulations of commercial banks.
Secondly, I help you understand the structure of the financial system. I have described the difficulty in taming inflation given the relative interest rate insensitivity of the U.S. economy, and also noted the financial stability implications of higher interest rates. An understanding of the financial system would have helped you anticipate both significant global inflation as well as its persistence. It would have also allowed you to dismiss the prospect of a U.S. banking crisis in March 2023.
Lastly, I help you anticipate the actions of the Federal Reserve. The Fed is the most important actor in financial markets, and one that is intentionally transparent and predictable. I have discussed their potential problems with low reserves, changes in their quantitative tightening framework, challenges in rate control, and new tools that allow them to hike even amidst pockets of instability.
I also write about many other topics that are both interesting and useful in forming a macro view. Please browse through my free articles to get a sense of what I offer.
My work is intended to supplement your own investment process with a perspective that is not easily found elsewhere. For institutional investors, I also offer more bespoke work on topics of your interest.