Episode 9:
On today's show I speak with Aahan, founder of Prometheus Research, a research service with the goal of democratizing finance making institutional-quality insights and research available to the public.
1. Background of Macro research
- Understanding underlying mechanisms over analyzing data
- Monetary contracts and how we got here
- Money grows faster than underlying labor and capital
- Monetary policy - tighter is needed to tame inflation
- Interest rates need to be higher than CPI to lower future inflation
2. Monetary and cost push inflation
- Money infused into personal incomes and economy with production and labor
- Productivity down - less output/dollar
- Rise in costs of capital, production, labor
- Margins compressed with dilution of value
3. PMI, ISM and Manufacturing Reports
- Manufacturing forward indicator for earnings
- Real demand coming down
- Consumption declined
- Excess production and inventory build
4. Tightening liquidity
- Returns on assets relative to cash is negative
- Pressures on production and employment increasing
- Lower output and less need for employment
- Stagflationary Nominal Growth to Stagflation
- Real incomes and spending weaker so business sales also weaker
5. GDP Nowcast
- Weakening in real growth relative to previous year
- Real GDP could go negative near term
6. Returns not a feature of asset class but a feature of sample selection
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