The rally in risk assets remains a rental.

george floyd looting

Post lock-down pent up "demand". Photo by Michael Buckner/Variety/Shutterstock.

Since the beginning of the coronavirus outbreak, I've published six blog posts with charts to illustrate the likely economic and financial consequences of the pandemic. Now that we're three months into this shock, thought it would be good to update some of those to see if things had

played out as anticipated. Chart 1: NIPA v. S&P 500 Index Source: Bloomberg In my March 31, 2020 post, I reviewed how the level of pre-tax corporate profits had not grown at all since the end of 2011. I observed that if this level was to decline by 10 percent and the…

Any loss of conviviality is a loss to the unwritten laws that allow humans to live and flourish together.

bantam inc jack duval multi-family office manhattan new york - plato's cave allegory image

Depiction of Plato's allegory of the cave.

For 5,000 years of human history, humanity has been working on coming together.  Let us call this the process of becoming convivial. This process, which, admittedly, has ebbed and flowed, has taken us from clawing out existence as individuals and small groups on the savanna, to tribes and nations.  It reached

an apotheosis in the modern world of complex supply chains and easy international travel. The entire world had become connected and convivial. That, of course, has come to a full stop. The Convivial Economy “Convivial” has its origins in two Latin words meaning to feast and to live.[1]  If…

The new gods are jealous gods and they were not pleased with the graven image of Trump’s name on stimulus checks. All glory must be to them.

bantam inc jack duval multi-family office manhattan new york - plague doctor mask

Dr. Powell will see you now.

The coronavirus event is too big for most, maybe any, to fully comprehend.  Because of this, the U.S. appears to have turned to a kind of magical thinking that can best be described as religious.  It is unsurprising that we have reacted in this way.  The same thing happened during the Black Death

which saw the rise of all kinds of cults as well as the Flagellants, who challenged the Church. When we can’t comprehend and control our world, it leaves us in a state of psychic unease.  To release this stress it helps us to give a name to…

The Fed can buy all the assets they want, but it won't make any company or individual consume goods or services.

bantam inc jack duval multi-family office manhattan new york - hollywood sign

The Hollywood sign.

This is the fourth post in my coronavirus blog series. Like most Americans, when I heard that the Federal Reserve were going to buy CLO's, municipal bonds, and junk bonds, I immediately took the whole family out for a huge meal at our favorite restaurant, bought a new washer and drier,

pulled the trigger on redoing the kitchen, and booked a five-star vacation in Turks & Caicos. Of course, I did none of those things.  And I won't do any of those things for at least another year.  And neither will anyone else. The Federal Reserve Board, a group of…

The world has to go through a deleveraging process where assets are sold to pay down debts. It has only begun.


Hieronymus Bosch rendering of deleveraging cycle.

This is the third blog post in my series on the coronavirus and the related market impacts. I've been asked by clients and friends what to make of last week’s rally in the stock markets. What I make of it is simple:  it should be sold. If you failed to get out

of risk assets during the selloff that started on February 24th, you have a great opportunity to sell now. This rally is a fugazi, straight out of the bear market playbook and it should be sold now, with no delay. Don't believe me?  Riddle me this: can you…