Broken Pie Chart

Derek is back to discuss the recent media reports of highest inflation in 30 years. What is true and what isn't? Plus he takes a deeper dive into inflation components, inflation sentiment effecting consumer beheavior, and sticky vs flexible inflation.

Inflation at 30 year highs

Today's inflation vs late seventies and early eighties inflation

Flexible inflation (CPI) vs Sticky inflation (CPI)

What makes up the CPI index

Year to date 5.8% inflation in 2021

How many years have we seen deflation

Michigan Consumer Sentiment release

1 year inflation expectations vs 5 year

5 year treasury breakeven inflation rates surging

Consumer behavior around deflationary and inflationary periods

Mentioned in this Episode:

Contact Derek Moore [email protected]

Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

Michigan Consumer Sentiment Inflation Expectations http://www.sca.isr.umich.edu/tables.html

CPI All Items annual Federal Reserve Bank of St. Louis https://fred.stlouisfed.org/series/CPIAUCSL#0

Flexible CPI vs Sticky CPI https://www.atlantafed.org/research/inflationproject/stickyprice

BLS full PDF release CPI https://www.bls.gov/cpi/

Jay Pestrichelli, CEO of ZEGA Financial, is back with Derek to discuss Nassim Talib's comments that Bitcoin is another Tulip Bubble. Plus, the Fed announced a taper so now what? How companies putting Bitcoin on their balance sheet effects volatility.

Nassim Talib's comments about bitcoin being another tulip bubble

What was the Tulip Bubble?

Cyrpto bleeding into S&P earnings and volatility

Fed Tapering,

Wage Growth vs Inflation

Doom and gloomers are wrong so just be hedged.

Mentioned in this Episode:

Contact Derek Moore [email protected]

Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

Jay Pestrichelli's Book Buy and Hedge https://amzn.to/3CUX134

Podcast What Happens if You Miss the Two Best Days of the Market Each Year? https://podcasts.apple.com/us/podcast/buy-and-hedge-protect-yourself-from-yourself-miss-two/id1432836154?i=1000525355779

Derek is back to explain why homes may not be as unaffordable compared to 30 years ago. What the media may leave out when talking about home prices and inflation. Plus, quick update on container shipping prices and the week ahead for several central banks.

What the media gets wrong about home prices

After inflation, home prices haven't risen quite as much

Low rates mean more house

Challenge with extending the terms on auto loans

Importance of annualizing data

Down payments not as bad?

Comapring home appreciation to income gains

Container shipping costs are moving lower

Central banks interest rate decisiosn coming

Mentioned in this Episode:

Contact Derek Moore [email protected]

Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

Are homes more affordable after accounting for inflation? https://realestatedecoded.com/real-monthly-mortgage-payment-home-price-index/

Real median income US https://fred.stlouisfed.org/series/MEHOINUSA672N

Real median home prices historical https://fred.stlouisfed.org/series/MSPUS

Derek is back to explain why inflation normalizing does not exactly mean lower prices. Jack Dorsey says hyperinflation is coming. What is hyperinflation and is he right? And who's right the blue chip analysts or Atlanta FED's GDP nowcast?

Jack Dorsey says hyperinflation coming.

Inflation compounds on itself.

Illustrating how damaging 1970s inflation was

Compare prices with a normalized inflation rate vs 1970s and early 1980s actual

What is hyperinflation

GDP Nowcast by the Atlanta Fed comes in lower than blue chip consensus

What is the GDP Nowcast

100 Trillion Dollar Zimbabwae Bill

Mentioned in this Episode:

Contact Derek Moore [email protected]

Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

GDP Nowcast Atlanta FED https://www.atlantafed.org/cqer/research/gdpnow?panel=4

Inflation Nowcast Cleveland FED https://www.clevelandfed.org/our-research/indicators-and-data/inflation-nowcasting.aspx

Jay and Derek are back to together on the podcast to go back and forth on current event.

Jamie Dimon thoughts on crypto

COLO Adjustment

Jay guest starring on Fox Mornings And Marie (well atleast on a panel discussion)

Doing financial TV as a guest

CPI latest numbers

Container Shipping prices finally tick lower for the first time.

Tech earnings releases

How Tech companies perform before and after earnings releases

Mentioned in this Episode:

Contact Derek Moore [email protected]

ZEGA www.zegafinancial.com

Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

Jay Pestrichelli's Book Buy and Hedge https://www.amazon.com/Buy-Hedge-Rules-Investing-Minyanville/dp/0132825244?&linkCode=ll1&tag=tradesurfer-20&linkId=46ffc6b807e0c7f3d2e66a32790241e2&language=en_US&ref_=as_li_ss_tl

Derek Moore is back to discuss whether the Fed has any cover to not pull back on their monthly asset purchases. Plus, what is the employment situation? What about inflation and supply side supply chains? Are we nearing Stagflation? This and more on the program.

Fed Taper

Fed Asset Purchases

Inflation

Container Shipping

Supply Side Issues

GDP Now failing

Stagflation

US Treasuries Close Above 1.6%

Unemployment

Labor Participation Rate

Mentioned in this Episode:

Contact Derek [email protected]

Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

Atlanta Fed GDP Nowcast https://www.atlantafed.org/cqer/research/gdpnow?panel=4

Cleveland Fed Inflation Nowcast https://www.clevelandfed.org/our-research/indicators-and-data/inflation-nowcasting.aspx

Derek Moore is back to discuss political risk to markets and interest rates. What exactly is the budget reconciliation process? What is the debt ceiling and is there really a risk of default? What about the filibuster?

Debt Ceiling

Budget Reconciliation Process

Continuing Resolution

Inflation

Supply Chain Issues

Container Shipping Issues

Infrastructure Bill

$3.2 Trillion Budget Bill

Political Risk to Markets

Inflation Risk

Interest Rates reaction to debt ceiling

US Bond Downgrades

US Debt Default

Treasury Secretary Yellen Default Risk

Senate Filibuster

Mentioned in this Episode:

Contact Derek [email protected]

Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

Budget Reconciliation rules https://budget.house.gov/publications/fact-sheet/budget-reconciliation-basics

History of US Debt Ceiling https://en.wikipedia.org/wiki/History_of_United_States_debt_ceiling

Jay Pestrichelli, CEO of ZEGA Financial is back to discuss key market themes including comparing September to other months. Guess Which month is the worst? Evergrande in China and what is going on with their bonds. The Fed Taper and interest rates. Economy and GDP growth slowing? Housing starts along trendline. Plus, myths about portfolio hedging.

Evergrande in China

China's Three Red Lines Debt Policy

Evergrande bond prices and ratings are pricing in defaults

Evergrande is not new. How long has price been telling investors there is an issue?

The Fed likely to Taper and effects on markets and interest rates

Stagflation?

September is the worst month historically.

Sell in May and go away a misnomer?

Hedging myths

Everything you think you know about hedging is wrong

Mentioned in this Episode:

Contact Derek [email protected]

Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

What is China's 3 Red lines Policy https://www.ubs.com/global/en/asset-management/insights/china/2021/china-three-red-lines.html

Jay Pestrichelli's book Buy and Hedge https://amzn.to/3o6QGgm

Everything You Think You Know About Hedging is Wrong article https://zegafinancial.com/blog/everything-you-think-you-know-about-hedging-is-wrong

Understanding Bonds Interest Rate Risk and TIPS Bonds Treasury Inflation Protected Securitieshttps://podcasts.apple.com/us/podcast/tips-inflation-protected-bonds-explained-interest-rate/id1432836154?i=1000535445537

Talking Inflation, All-Time Market Highs, Interest Rates, Covid, Housing, & More https://podcasts.apple.com/us/podcast/talking-inflation-all-time-market-highs-interest-rates/id1432836154?i=1000533456019

Google web searches for the term Stagflation are spiking. More pundits are mentioning the S word. So what is Stagflation and what should be looking at to tell whether this is a real risk to the economy?

What is stagflation

How to measure slowing growth

How to find CPI inflation data

Where to follow unemployment and wage growth

Why the Fed would be put in a box during stagflation

Stagflation causes including supply side issues

Fiscal stimulus the wrong thing if its supply side

Mentioned in this Episode:

Contact Derek [email protected]

Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

TIPS Inflation Indexed Treasury Bonds https://open.spotify.com/episode/0wKePdiHHZ89B2hVajRb6C?si=_4JZCIQGS5iIwJDIKzMwyQ&dl_branch=1

Supply Side vs Demand Side Inflation https://open.spotify.com/episode/5iwBwhxdczXuFPPVuZ4tup

Marcel Benjamin is back on the show for another appearance to dig into the details around TIPS Bonds (Treasury Inflation Protected Securities). How they work and why they are misunderstood by many. Plus, we discuss interest rate risk comparing high and low interest rate environments. Yup, even a little bond convexity primer! This was a great conversation that gives anyone a much greater depth of knowledge on an asset class that is a little more complicated.

• T Bonds and Bills: lower interest rates, increased duration and sensitivity to changes in interest rates
• Examples of potential changes in market value (risk) when interest rates go up or down
• Its about looking at the series of cash flows
• What are TIPS (Treasury Inflation Protected Securities) Bonds?
• How are TIPS Bonds designed to be adjusted for inflation based on the CPI?
• Size of the TIPS Bond market
• Primary risks include interest rate changes and deflation.
• Breakeven rates a view into market view on inflation
• 5-Year/ 5-Year Forward Rates
• Auctions going off at negative yield to maturity
• Comparing 2020 to 2008 break evens
• Bond Convexity primer
• Mortgage bonds unique convexity due to pre-pays by homeowners
• Duration over the years on the US AGG (Aggregate Bond) Index

Mentioned in this Episode:

Marcel Benjamin's prior podcast appearance covering High Yield Bonds https://brokenpiechart.libsyn.com/marcel-benjamin-high-yield-bonds-explained-what-are-zombie-companies

Information on State Street Global Advisors SPDR fixed income products https://www.ssga.com/us/en/intermediary/etfs/capabilities/simplify-investing-with-fixed-income-etfs/sdpr-fixed-income-etfs

Contact Derek Moore [email protected]

Derek Moore's Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&