138 Comments
Jul 14, 2022·edited Jul 14, 2022Liked by Alfonso Peccatiello (Alf)

Great article as always professor Alf!

I'd like to understand more about the final point regarding the dollar rally. I'm not an FX trader but I'd like to understand the macro better for USD. What does happen when the party stops?

Amazing stuff. Looking forward to attending your macro university!

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author

Thanks, Gene! I should maybe cover the role of the USD more in depth

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Jul 14, 2022Liked by Alfonso Peccatiello (Alf)

For readers interested in bond price movement v. interest rate changes, and concepts of duration and convesxity, I thought you might like to read this 4-page from blackrock.

https://www.blackrock.com/fp/documents/understanding_duration.pdf

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Jul 14, 2022Liked by Alfonso Peccatiello (Alf)

I’m sure this means I’m dumb, but what do you mean by “go fishing”? My guess is be willing to buy if it drops substantially or just “buy opportunistically”, but I’m not really sure and couldn’t get it from context. Thanks!

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author

Hi! I should have specified indeed :)

Go fishing means: don’t look at the screen and do something else until the setup shows a better risk/reward

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Thank you sir! Your online education is the best.

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Welcome!

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Jul 14, 2022Liked by Alfonso Peccatiello (Alf)

Rain check. Pass. No taking a position. Fishing rather than speculating.

At least that’s how I read it.

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Jul 15, 2022Liked by Alfonso Peccatiello (Alf)

I think it means stay out of the market and enjoy other things in life. I don't think it implies 'fishing' for opportunities, or "bottom fishing".

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Jul 15, 2022Liked by Alfonso Peccatiello (Alf)

Alf means with "go fishing" do nothing!

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Jul 16, 2022Liked by Alfonso Peccatiello (Alf)

Alf explained what he means by “go fishing” in a recent YouTube video.

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Agreed. It is very unclear what exactly he means by "go fishing".

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Jul 14, 2022Liked by Alfonso Peccatiello (Alf)

Hi Alf, love your work. Would you mind doing a more in depth podcast on the dollar, would love to hear your thoughts on it.

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Good idea :)

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Jul 14, 2022Liked by Alfonso Peccatiello (Alf)

What happens when the party stops?

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author

If Central Banks are still tightening, H12022 again but on steroids.

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Does the dollar milkshake theory ring a bell?

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VIX to the moon.

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Jul 14, 2022Liked by Alfonso Peccatiello (Alf)

This is a great piece Alf! Thank you!

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Welcome, Andrea!

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Jul 14, 2022Liked by Alfonso Peccatiello (Alf)

Great perspective given succinctly and with real actionable recommendations. Best out there

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Thanks, JW! Who would be the other top 3 macro research and portfolio constructions providers you think?

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Jul 17, 2022·edited Jul 17, 2022

I like to check in on Raoul Pal and you and than listen in to all the different perspectives I get from who Wealthion brings on. Lance Robert’s provides good overall insights and tactical portfolio ideas I respect.

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Jul 14, 2022Liked by Alfonso Peccatiello (Alf)

Also remember on this Bastille Day nothing but Macron matters ....

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author

Eheh :)

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Jul 16, 2022Liked by Alfonso Peccatiello (Alf)

Here's a great rendition of 'Nothing Else Matters" by an all-women Polish group.

https://www.youtube.com/watch?v=09NqLjHJtGQ

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Jul 16, 2022Liked by Alfonso Peccatiello (Alf)

Thank you for sharing your views, Alf.

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author

My pleasure!

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Jul 16, 2022Liked by Alfonso Peccatiello (Alf)

When QT picks up, shouldn’t interest rate volatility increase and the yield curve steepen as investors start to demanding higher yield to hold longer dated bonds? So wouldn’t this mean long bonds will underperform “this time” under that scenario. Thanks, great writing.

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author

Hi Jon! The answer to this question is in an article about QT I wrote some months ago. Check it out!

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Jul 16, 2022Liked by Alfonso Peccatiello (Alf)

Keep up the good stuff. These last two articles were A-grade.

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Thanks, Levy! What did you dislike from previous articles?

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Jul 16, 2022Liked by Alfonso Peccatiello (Alf)

I like especially "An Overview of Macro Asset Classes" part. Very appreciated Alf.

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author

My pleasure!

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Jul 16, 2022Liked by Alfonso Peccatiello (Alf)

Have you looked at the ratio copper/gold by McClellan, correlation with the 10 year notes it's indicating the a droop for notes in the short near term.

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author

Yes indeed

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Jul 15, 2022Liked by Alfonso Peccatiello (Alf)

Hi Alf! I’ve got a couple questions to which I’d really appreciate your response. 1) Since a bank creates a loan or deposit from thin air, and not from their own assets, why do people say that banks make money from only the interest on loans, and not the entirety of the loan repayment (principal plus interest)? Shouldn’t the assets of the bank ultimately increase by the principal of the loan they make plus the interest of the loan? 2) And consequently, also, if fractional reserve banking doesn’t occur at all, but rather banks have the right to create assets freely, shouldn’t bank-runs be very unlikely to ever occur, not a probable hazard that necessitates a “lender of last resort”?

Thanks so much, Will

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Hi Will!

A) because when that loan is repaid, the principal is destroyed

B) correct, and they are indeed very rare; they mostly happen when banks have created too many loans without the adequate amount of liquid assets to back a quick rush of deposit withdrawals. The central bank can always provide reserves but it generally would require some sort of collateral against it.

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Jul 15, 2022Liked by Alfonso Peccatiello (Alf)

Great article Alf. Really appreciate your views on the major asset classes. That’s really helpful, and also appreciate you give ideas for European ETFs.

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Hey Jonathan! That’s what I strive for :)

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