FATT News and Press, Fat Tail Risk ETF From 09/08/21

Despite the lowball jobs total on Friday, plenty of good news is buried in the small print, like massive revisions to the previous two months. In addition, Hurricane Ida may have suppressed reporting of August payroll data. There are some more clues in the ADP reported last Wednesday,...

The economic slowdown we’ve been writing about for months officially arrived last Friday in the form of a particularly weak employment report. But the US economy did still add 235,000 jobs in August. The economic recovery is still intact, even if at a reduced rate of change. ...

Risk-adjusted performance continued to rise in August for the Global Market Index. Sharpe ratios in global markets generally are elevated. GMI represents a theoretical benchmark for the “optimal” portfolio. For further details see: Major Asset Classes | Aug...

How markets feel about risk is uber-important, but risk perception is minimal right now. One measure of this is the rate banks need to pay to entice investors to invest in commercial paper. It's never been lower, helped by risk-on and tight credit spreads. Any Fed taper which elev...

Given the sizeable skew in the distribution of outcomes toward negative real returns, it's extremely important to be selective in high-quality fixed income, and to be truly vested in one’s investments so that portfolios are not permanently impaired. In the short term, the commo...

We doubt the drivers behind the narrowing of USD-EUR rates differential will persist: supply will swing the other way ahead, and overly hawkish ECB comments sow the seeds of a mini-tantrum. We're at a crossroads on many fronts. Direction usually comes from the US, but not always. ...

The winning streak for American shares rolled on in August. US stocks rose for a seventh straight month and posted the strongest gain for the major asset classes. US bonds also lost ground in August. The Bloomberg Aggregate Bond Index slipped 0.2%, the first monthly decline for the be...

ECB hawks are making the case for a reduction in PEPP purchases in 4Q, and for less monetary support generally. If there is disagreement, we’ll find out today or tomorrow. We doubt EUR rates can withstand both ECB and Fed tapering this year at current valuations. For ...

In his speech on Friday, Fed Chair Jerome Powell stressed that inflationary pressures are cooling and getting closer to the Fed’s 2% target rate. Powell also acknowledged that some inflation is a “cause for concern” and implied that higher prices could be more permane...

The US front end maintains a magnetic hold, pulling short rates down. A non-committal Fed puts the focus squarely on Friday’s jobs report. September tapering may yet happen, but US Treasuries were allowed a pause in their sell-off. We expect supply to be a more potent drive...