Macro Man turns 10 years old

You can take the dove out of Brainard...actually, apparently you can't.  Her speech yesterday was the equivalent of the Little Red Book for financial repressionistas, covering the major arguments (and some minor ones) why monetary policy should remain uber-accommodative.  Amongst the panoply of risks identified by Brainard, that of incentivizing people to buy financial assets at stupid prices was notably absent.  Quelle surprise!  If you can measure someone's worth by the company they keep, then the Hosannas heaped upon this speech by former FOMC uber-dove and current crackpot Narayana Kocherlakota says it all.

In sum, therefore, the leopard did not change its spots, the dove didn't grow talons, and the Fed did not give us the nudge, nudge wink, wink that a rate hike is imminent.  While the direction of the equity market's reaction was not a surprise, the magnitude was impressive, with Spooz reclaiming a goodly chunk of Friday's meltdown losses.  As Macro Man noted yesterday, volatility tends to cluster, so large moves in both directions were to be expected.

While the short end rallied a bit, with September priced at just 12% odds, the bond market reaction was notably muted.  Although futures rallied, both bonds and ultras failed to take out the intraday high from Friday's pit session.  As reactions to super-dovish commentary go, this was about as unimpressive as it gets.

As such, it is entirely justifiable to retain a healthy dose of skepticism over Monday's snapback rally.   After all, if higher bond yields helped spark the sell-off, and bond yields barely budged despite the most supportive commentary possible from a key FOMC member, what does that say about the path of least resistance moving forwards?

Of course, saying one wants to "sell the rally" and finding the right level to do so are two different things.   While Macro Man was fortunate in his timing to take off some risk yesterday morning, he was, ahem, premature in redeploying it during the bounce.  Still, as long as the bond gap holds it seems reasonable to let some more go, perhaps after Europe enjoys their relief rally this morning.

Looking ahead, there's no real reason why a dovish dissent should do any more to stop a Fed decision than many of the hawkish ones over the past couple of years.  Then again, in many cases the Fed hasn't needed a "real reason" to stand pat and stay dovish, and dissent from a governor will carry more weight than one from a regional president.   The commentary accompanying September's decision will be particularly important, as it will be an opportunity to ensure that December's meeting is well and truly "live".

Elsewhere, Macro Man hopes that readers will indulge him a bit of self-congratulation of the type most commonly associated with the central banking community.   For today is the 10th anniversary of the Macro Man blog, which inaugurated in 2006 with a post title that still resonates today.  In the interim, this space has played host to 2,107 posts, which have attracted nearly 4 million viewers and more than 6 million page views.

The look has changed from this

to this

to this

to what you see before you today.

Long-time readers will of course recall that Macro Man endured a forced blogging retirement of four years when he first moved to the United States in 2010, during which time the TMM of Polemic, cpmppi, Nemo, and others behind the scenes helped keep this place alive.  Macro Man owes them a debt of gratitude-  thanks lads.

Since his return, your author has been pleased and gratified to see readership and the little community of the comments section grow, which is a testament to the fact that even in the midst of dire financial repression, there remains an interest in macro viewpoints.   As evidence mounts that many of these repressionary policies have reached the limits of their utility, the benefits of a top-down investment approach should only increase.

While Macro Man has made efforts over the years to tart the place up, he will admit that the results make it appear unlikely that an alternative career in graphic design awaits him.  It does seem, however, that after a decade it may be time to decamp to a proper bespoke web address with a site that is properly designed, not picked out of a (free) catalog and jury-rigged by an author whose ignorance of HTML is profound.

At the same time, Macro Man knows that he does his best and most interesting work with professional-caliber market and economic data to back him up.  It would be nice, also, to revive the model portfolio that accompanied the first 18 months of the blog; it's the most accurate way possible of sense-checking and keeping score of his views, which confers benefits not only to your author but also upon readers.

All of these potential changes require investment, of course, and your author would be a poor punter indeed if he sought no return from that investment.  While it's a well-known precept that people are loathe to pay for what they are accustomed to receiving for free, by the same token quality content has an economic value well in excess of zero.

Insofar as this space has always been something of a community, it seems only right to solicit feedback from readers before implementing any changes.  Indeed, the proverbial builders haven't even arrived on site yet.  But the world has changed mightily in the ten long years that Macro Man has been offering financial commentary, poetry, dodgy jokes and the odd Sherlock Holmes tale, and it behooves him to adapt.   No doubt the next decade will witness further changes still.

It's Macro Man's fervent hope that this blog will be around in another ten years, and that he and readers can look back on them as healthy and profitable ones.

Cheers!