It’s the most wonderful time of the year, and also the most littered. Inboxes overflow with direct marketing from purveyors of fine and unrefined goods you just know you did not sign up for. And sell side economists, strategists and analysts are all charged with producing reams upon reams of 2018 outlooks. The best thing about them is they no longer slay forests of trees and can be delightfully deleted.
My dear friend Peter Boockvar, who has garnered his fair share of the limelight for laying the cryptocurrency mania at the feet of central bankers, on Twitter no less, had this to say this morning about the deluge of direction spewing from his verbose peers on the Street.
Historically, the Chinese market has been relatively isolated from international investors, but much is changing there now, making China virtually impossible for the diversified investor to ignore. Earlier this year, CNBC pointed to signs that Chinese regulators may start easing up on their scrutiny of companies after months of clamping down on tech firms. That Read More
“As we hear about the sell side 2018 market predictions and viewpoints on next year from others, I am completely amazed at the nonchalance with monetary policy. Some do not even mention it as a risk factor. Let me know if you’ve seen one forecast that includes a lower P/E multiple due to $1 trillion of liquidity that is being removed by the Fed and ECB alone in 2018 on top of more Fed rate hikes. I haven’t seen any.”
For the record, neither have I. So do us a favor and let us know if you do. OK, so it beats heroin. But they say methadone is no cake walk. Being weaned off of it is even less fun.
In the meantime, in my capacity of arbiter of all things Federal Reserve, I would be remiss to not weigh in on President Trump’s latest nomination to the Federal Reserve Board, Dr. Marvin Goodfriend. You’ll note he is a PhD in economics, which can be a good thing if it refers to a brilliant theoretician and practitioner who ensures his thinking changes with the times.
By all accounts, Dr. Goodfriend has indeed evolved as his estimable career has afforded him a vast variety of posts and appointments. So that’s a plus. Not being intimately familiar with his work, I will chime in on the two areas with which I have studied. Goodfriend is a fan of discipline in monetary policymaking. For that, I would grade him an A+. He has also advocated for negative interest rates. Given negative interest rates’ terrible track record and the slippery slope they provide to monitored spending via electronic currencies, I’m afraid I will have to hand out an F-. Can we please just not go there?
I must say I’m intrigued by the mystery the financial media has ascribed to the violent rotation out of tech we’ve seen. Did anyone bother to note that the selloff in tech stocks started the very same moment Bitcoin fell out of bed last week? Speculation is speculation. The entrance is always wide open until, that is, the exit is mobbed.
With that, I must tip my hat to CNBC’s Carl Quintanilla. He had the wisdom to chuckle as he started an interview asking an analyst the reasoning behind his prediction that Facebook’s stock would rise 30 percent in 2018, all things considered. I’ll paraphrase and spare you the fundamentals you can Google to kingdom come -- monopolistic momentum plays are where you need to be.
Besides, Mark Zuckerberg is a visionary leader. Not only does he run one of the white-hot FANG stocks, he has dreams that can reshape our very society as it is challenged in the years to come by the inevitable march of progress. Universal basic income anyone? For more on our job market’s prospects, I invite you to read on to this week’s installment of The Job Mob: The Societal Impact of the Next Downturn.
Sending warm, fuzzy vibes as winter settles in and wishing you well,