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Marshallian K

Aug 06 2021

Liquidity Letdown?

  • Aug 6, 2021

Stock market liquidity might seem plentiful, with the Fed still buying $120 billion in bonds per month under the all-too-predictable continuation of what was first billed as an emergency operation. However, the steadiness of QE masks a major second-quarter reversal in “excess liquidity.”

Aug 06 2021

Sharing The Punch Bowl?

  • Aug 6, 2021

The gap between YOY growth rates in M2 and nominal GDP just flipped negative after four quarters of record-high readings. In other words, the recovering economy is now drinking from a punch bowl that the stock market once had all to itself. Similar drinking binges occurred in 2010 and 2018, both of which then experienced corrections north of 15%.

Nov 06 2020

Liquidity: As Good As It Gets?

  • Nov 6, 2020

Stock market manias thrive on buzzwords, and if there’s a single one that captured the essence of the late 1990s’ boom it was “productivity.” In today’s version, our top candidate is “liquidity”—and we doubt anyone would argue.

Aug 07 2019

Who Doesn’t Love “Excess” Money?

  • Aug 7, 2019

We’d concede the monetary backdrop for stocks is now mixed, an upgrade from the almost uniformly negative environment of last fall. On the negative side, the U.S. yield curve inversion has now persisted long enough that even the economic optimists are getting nervous.

May 07 2019

Mixed Monetary Messages

  • May 7, 2019

Confidence in the U.S. economy’s health reached a new peak with the April employment report, with a blowout number for nonfarm payroll coinciding with a soft wage print.

Dec 07 2018

It’s About Money, Not Profits

  • Dec 7, 2018

The consensus focus all year has been on the boom in U.S. corporate profits.