IVOL News and Press, Quadratic Interest Rate Volatility and Inflation Hedge From 12/17/20

The rise in breakeven inflation in the United States is not particularly surprising, as it is just a return to projecting previous conditions forward. Since inflation-linked bonds are based on overall CPI, the inflation payout is greatly influenced in the near run by changes in energy...

Asset valuations, in themselves, cannot tell us when bubbles will burst, but they suggest when we are witnessing them and the depth of liquidation coming on the other side. Today, equities, corporate and many sovereign bonds (and the funds and ETFs that hold them) are more extremely p...

As we say good riddance to 2020, we enter 2021 with a confidence that new market and business cycles have arisen. We believe the economy, out of the depths of the COVID-induced recession, has entered what will be a protracted recovery, complete with the inevitable fits and starts, as ...

The blistering IPO market is but one of the myriad late-cycle manifestations of Acute Monetary Disorder. November's record $121 billion ETF inflow - boosting the y-t-d flow tsunami to a record $659 billion. SPACs and frenetic retail call option buying (one can only imagine current hed...

With the US suffering another coronavirus wave, the odds remain low that inflation will accelerate sharply in the near term. The Treasury market is certainly pricing in a firmer run of inflation expectations lately. Some corners of the economy suggest that pricing pressure is boun...

With the world in the early post-recession recovery phase of the business cycle, our medium-term outlook for economies and corporate earnings is positive. We believe that 2021 will feature an extended period of low-inflation, low-interest rate growth that favors equities over bonds. T...

The coronavirus is likely to accelerate throughout the holidays, with activity restrictions likely to tamp down growth - even without another round of broad national lockdowns. At the very least, slow growth and low inflation are likely for the next several months. The Fed will keep m...

There is no longer any correlation between bank reserves and the economy-wide money supply. In the US, the government-Fed combination can increase the money supply to almost any extent independently of the private banks. That is, monetary inflation does not rely on the expansion of cr...

The problem is that the stimulus does not create organic, sustainable economic activity. Stimulus only pulls forward future activity into the present, leaving a future void to fill. Currently, the market is extremely "one-sided" as investors chase markets. It is at these points in...

November non-farm payrolls gained 245,000, only about half the mean forecast - and down from October's 610,000. It was the weakest job growth since April's employment debacle. U.S. equities rallied on the disappointing news. Bad news has never been more positively received by the stoc...