Confirming what many have suggested, the billionaire founder of the world's largest hedge fund, warns in his latest letter to watch out for the effects of tax reform on migration, the fiscal conditions of affected states and cities, and an increased polarity in America.
Birdgewater's Ray Dalio writes (via LinkedIn),
Stop us when you've heard this before... and you've heard it exactly two times in the last two quarter: both Bank of America and JPMorgan warning their revenue will be down double digits year over year because volatility is so low, and traders are so paralyzed, there is much less money to be made trading either flow or prop, or simply from collecting commissions.
Well, today marks the third time in the last three quarters when both JPMorgan and Bank of America both said - again - that there hasn’t been a rebound in the relentless slump in trading revenue.
Following Manufacturing's drop, the US Services sector PMI disappointed in November, falling to its lowest since June (as business confidence tumbled to its weakest since February). Average selling prices soared as growth slumped setting the scene for a stagflationary future. ISM Services confirmed this weakness, tumbling to 3-month lows.
Authored by Erik Norland via CME Group,
We freely admit: Figure 1 is probably the strangest chart that you will ever see, at least in finance.
You may be wondering: did they throw blue spaghetti noodle on paper for inspiration and then write an economics article about it? Or, have they spent too much time with disciples of psychologist Timothy Leary, a proponent of experimenting with psychedelic drugs?
Figure 1: Weirdest Chart Ever
"probably nothing..."
The Treasury yield curve continues to plumb new cycle lows with 2s30s now below 94bps and 5s30s testing below 60bps...
If the tax deal is so 'growthy' - why is the yield curve signaling degrowth?
Who's right about growth? Bonds or Stocks?