Crescat Capital commentary for the month of April 2019, titled, “Fed Got Your Back?”
Market sentiment has been extremely bullish on the idea that ‘the Fed has got your back’. But do they really? Perhaps global central banks have created the biggest debt and asset bubbles yet assuring that the business cycle is alive and well.
The following is our rough coverage of the 2021 Sohn Investment Conference, which is being held virtually and features Brad Gerstner, Bill Gurley, Octahedron's Ram Parameswaran, Glenernie's Andrew Nunneley, and Lux's Josh Wolfe. Q1 2021 hedge fund letters, conferences and more Keep checking back as we will be updating this post as the conference goes Read More
Our work shows that liquidity has not been the driver of this recent everything rally. Instead, investor hope is. Liquidity, in the form of both global M2 money supply and central bank assets, has actually been contracting as shown below.
More troublesome is that when massive central bank intervention does finally return, history proves that it does not stop asset bubbles from bursting as the Global Financial Crisis.
In this short video below, Tavi explains this phenomenon along with a sequence of macro charts:
By some measures, such as VIX speculation as shown in the chart below, bullish optimism is even more frothy today than it was in September 2018 prior to the Q4 selloff.
Kevin shares the major opportunities and imbalances we see in today’s market in this 10-minute TD Ameritrade TV interview:
Stay tuned for our quarterly letter which will be published soon.