November 2022, Chicken Little Portfolio Performance

Q: What is worse than the Fed raising rates? A: the Fed loosing control of rates.  Financial Depression looms and the Government cannot prevent disaster.  Furthermore, financial pain will fuel public anger in unpredictable and dangerous ways 

Social unrest will increase

October 2022, Chicken Little Portfolio Performance

Stocks are rallying, bonds are rallying, gold is rallying, is the storm over? No. Not surprisingly, Chicken Little sees nothing but storm clouds ahead.  

Chicken Little sees only the clouds

Chicken Little Buys Bonds

Chicken Little has purchased some US Treasury notes maturing in 3-8 years.

Buy Bonds

September 2022, Chicken Little Portfolio Performance

The Sky is Falling. All assets have lost considerable value so far in 2022. Chicken Little predicts more extreme losses. What is next after the plunge? The Fed will try cutting rates and restarting the printing presses. However, loose money leads to financial disaster. The Fed will end up even more disgraced than they are now.  

More Fed printing & problems ahead

August 2022, Chicken Litte Portfolio Performance

Chicken Little is focused on interest rates. Financial headlines highlight the recent rapid increase in rates. However, inflation-adjusted, real rates, remain firmly negative. That means real rates have to go higher, much higher. Higher real interest rates ahead mean almost all asset prices have further to fall (you ain't seen nothing yet).

Fed Chair Powell: Rates are going higher

Chicken Little gone insane?

Chicken Little has gone insane? I have shorted stocks again today.

Here are some recent trades, sell stocks at Dow 31,000, buy stocks at 33,500, sell stocks at 33,000. So losing money at every turn, selling low and buying high. 

Today, I sold stocks short again. I continue to believe that the end is coming soon (financially).  

July 2022, Chicken Little Portfolio Performance

The Fed is a hero again? By raising real rates to negative 6% and reducing the balance sheet by 1% has the Fed cured decades of bad decisions? A new bull market is born and new highs are coming soon? Anything is possible, but (unsurprisingly) Chicken Little sees new lows before new highs.

Chicken Little see financial storms ahead

June 2022, Chicken Little Portfolio Performance

Stocks, bonds, gold, and crypto all fell in the first half of 2022. Is it time to buy? No, for two reasons. First, real interest rates remain negative. Second, and relatedly, the Fed has not begun to sell bonds. The Fed is scheduled to sell about $1 Trillion a year until they blink after they have further ruined the economy. I continue to suggest people sell some portion of their risky assets (see post: sell now). 

The Fed has e-printed $9 trillion. 

May 2022, Chicken Little Portfolio Performance

 The Piper will be paid, the sky is falling, wolf.

What is the chance the coming financial crisis will be greater than the 'Great Depression' of the 1930s? With certainty, the odds are greater than zero. Chicken Little thinks that probability approaches 100%. A financial crisis looms of a magnitude that no one alive has endured. The Fed created the crisis; we are going to pay.

Hooverville, Central Park, NY 1932

Biological Economics

I have just published an academic article on Biological Economics with Professor Jay Phelan from UCLA. Biology has the potential, we argue, to unite the two competing intellectual schools in economics: neoclassical and behavioral. 

Neoclassical economists assume people make perfect decisions (apparently never having met a person). Behavioral economists document certain failures to optimize. Biology can unify and improve economics.  (Click here for the long version of the discussion. )

Economics can be unified by Biology 

How to prepare for the Wolf

After a decade of fiscal and monetary incompetence, the wolf may be approaching your house. Is there a way to prepare for the wolf without panicking and selling all stocks and risk assets? Yes.

WOLF!

April 2022, Chicken Little Portfolio Performance

The Piper will be paid (by us, not Jay Powell).

The bull market in everything was fueled by government overspending and Federal Reserve looseness. Stocks up, Bonds up, housing up, gold up, crypto up. Now, the Fed has decided that it is their best interest to end the party, and everyone else will have to pay

The Fed made a mess, and we all have to pay