Tuesday, September 22, 2009

Bloggin' Ain't Easy!

Regular readers have surely noticed the drop-off in macro related articles on my blog over the last month or so. The reasons for this are numerous. First, I noticed that way too little time was being devoted to what actually makes me money: finding ideas and trading off them. Getting settled into a new apartment always saps more time than one expects, and I've been working on a new website that moves away from the standard blog format to something more multi-function. The word 'blogger' is thrown around fairly recklessly these days (when not used inflammatorily). And it hardly does justice to the wide variety of commenters that make up the 'blogosphere.'

The world of media is rapidly changing. Even over the last two years, I have seen the concept of blogs change rapidly - from purely opinion driven reports to multi-author news sites that report everything and anything related to the field of interest. Other than the odd late night glance at Bloomberg, I receive none of my information from mainstream media outlets. I have a team of people whose judgement I trust (found via trial and error), and their articles are sent directly to my Google Reader feed. I trust these people far more to filter the good information from the bad than I do anyone writing for major media outlets. For example, on Friday evenings if I want to know how many banks have failed, I can rely on both Rolfe Winkler and Calculated Risk to provide me with the details - faster and more efficiently than anyone else.

Every blog has its own style. Some attempt to report everything making a buzz on that day. Felix Salmon will apologize for missing a story. I prefer to avoid such practices, first because I don't think most of what happens is relevant to many people (based on my contrarian position on causality), and second because it can be incredibly time consuming to do so. I prefer to focus on the price action, human behaviour and inflationary vs. deflationary forces. Yet repeatedly focusing on the same issues can at times feel redundant.

I used to post more ideological attacks on Keynesians, Monetarists, central bankers, etc. That too becomes redundant and even when trying to have discussions with prominent economists, the conversations eventually turn into mudslinging and childish accusations.

So it turns out that my own personal style is to be far more limited in the quantity of posts, but by focusing on the issues that I feel are most relevant I can ensure that the quality remains high. The likely result is that I turn my weekend Technical Updates into more comprehensive articles focusing on macro and sentiment issues in addition to some technical analysis.

So for those of you looking for more daily commentary, I invite you to frequent the "Recommended Reading" tab on the right hand side of my page. The articles posted there are handpicked by myself as I scan through about 150-200 articles and blogs per day (Google Reader even keeps track of how much I read). This is a time consuming exercise, but I do it anyway. So for those who don't have the time to do this themselves, let me do it for you. Some days there will be 10 new posts, others only a few. I have a new application that is bigger and gives a summary of each post. I'll have that up in conjunction with the new site (ETA December).

I just thought I would keep my readers posted with what is going on and what to expect in the future. As always, I thank my regular readers for their comments and continued support. This blog has been a work in progress and a great learning tool.

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khalid said...

I find this blog excellent. I'm fine with the current format and frequency of posts. Quality over quantity any time. Plus there's only so much useful and important stuff to talk about that can affect your strategy and money making scheme in the markets.
I like your examination of the de/inflation subject and find that your blog is good at helping anchor my beliefs and views.

thanks, and here's hoping the website is as friendly as the blog is.

Anonymous said...

You're doing fine, Matt. I wouldn't change a thing.

occdude said...

Matt even though I take exception to some of the things you report on, yours is a contrarian voice I use to make investment decisions and I appreciate all your hard work.

I do hope that you enjoy this process and it gives you as much information and intellectual stimulation as it gives me to read about it.

I do like your technical updates and would like to hear about what your current positions are (of course I know you offer no investment advice yadayadayada). But, thanks again for the effort and look forward to your next missive.

Anonymous said...

Just wanted to thank you and say we appreciate your comments very much, including the links on the right side. Indeed, quality is more important than quantity, so your filtering service is invaluable.

Many thanks :) :)

Matt Stiles said...

Thanks for the kind words.


Current positions are long Jan 2.50 calls on ETFC. Long Commerce Resources (CCE.V). And I have been accumulating a pretty large position in long Dec '10 puts S&P with a 500 strike.

Subject to change of course.

mike.montchalin said...

I don't have much time for reading.

Soooo, Roubini got replaced by this blog.

aaaand, Nakedcapitalism will probably be deleted because of Matt Stile's GoogleReader.


Willy2 said...

I think the blog is O.K. Other blogs are specialized in commenting on economic developments (e.g. Mish, Rolf Winkler) so why try to rehash/publish the news items (again) ?


I would like to draw your attention to this article. I don't know whether you have seen this before but it contains a scary graph concerning the TIC flows from 1980 up to this year. Because it shows the inflow of money into the US goes down while at the same time US budgetdeficits are going through the roof. The graph shows that from 2001 to 2007 the inflow of money into the US increased in spite of e.g. the USD going down agianst e.g. the EUR. I know, the TIC flows are related to the growing and shrinking US trade deficits. But it shows IMO that with increasing budgetdeficits and declining inflows of money the FED will be forced to monetize more and more Treasuries.

According to my information foreigners are selling US agency debt and only buying short term T-bills. And that doesn't bode well for the US goign forward.

Matt Stiles said...


It is my opinion that an increasing rate of corporate and individual savings will be more than enough to offset the decrease in foreign holdings of US assets. I forsee an eventual savings rate north of 12%.

However, I am also expecting a high level of foreign sovereign defaults (ie. Mexico, E.Europe, Pakistan and maybe even Japan). The flight out of these 'riskier' currencies could drive a foreign accumulation in US assets of a different composition.

Roger J said...

"However, I am also expecting a high level of foreign sovereign defaults (ie. Mexico, E.Europe, Pakistan and maybe even Japan)."

WHOA! Japan default will be a wild huge black swan, cataclysmic event. Not imaginable to virtually everyone. I can't clearly imagine it either, but I have learned enough that nothing is impossible... especially when there is a strong, logical thesis built around an argument.

Indeed, 200% public debt to GDP ratio is just ridiculous. The effects? Probably a huge rush into the dollar & US safe assets (govt bonds) as the last existing safehaven?

I guess it's too far fetched for now. We still don't know which event is going to happen and how, and last but not least, in what order. But still, conceptualizing what will happen is a very interesting intellectual exercise... although it might end up to be just a mental masturbation.

Willy2 said...

Yes, savings will go up around in every country around the world but wil it be enough to offset the destruction of credit ? Remember, what savings are for one person is credit for someone else. And that's why a lot of folks invest in gold and silver.
And what is the precise definition of savings ? Does it consist of some crappy statistics like the US unemployment figures ? Do the words "Birth and Death" ring a bell ?

There's a distinct danger for higher/hyper inflation in the future. If GDP collapses and the FED would choose to keep pinting money at unprecedented levels (like in Weimar Germany and Zimbabwe) then inflation could start to appear. But currently that's only a possibility for some distant future.

The US is waging two wars and that could be another good reason to keep printing money. Waging wars is/was a good reason for letting the printing presses run wild.

There's a much more imminent danger: foodshortages !
Go here and read ALL the headlines at the right hand side of the webpage. Although I don't agree his rants of (hyper-)inflation. Foodshortages in the current monetary situation is actually very DEFLATIONARY ! Because e.g. the consumer can't take on more debt to pay for those higher foodprices.

The FED may be printing money like there's no tomorrow but this isn't "invested" in e.g. mortgages but it could flow into agricultural commodities and send foodprices to the moon in an speculation binge. Like the loose money that has send oilprices to over $140 last year.

Roger J said...

"There's a distinct danger for higher/hyper inflation in the future. If GDP collapses and the FED would choose to keep pinting money at unprecedented levels (like in Weimar Germany and Zimbabwe) then inflation could start to appear. But currently that's only a possibility for some distant future."

I recommend this piece from Matt, along with the cited article for an explanation why the FED cannot inflate away its debts.

I hope that it can end this discussion on the FED's ability to control inflation/deflation just like magic wands. It CAN'T.

Willy2 said...

I do still believe that the FED can induce inflation but it only can do so by introducing very extreme monetary policies which would lead to a currency collapse. And then and only then the US would start to resemble Zimbabwe. When I look at the actions of the FED today it seems they don't want to go down the road of Zimbabwe.

James K. said...

@Roger J:

I have read your recommended article. One should take into account the following:
Starting in the 2nd quarter of this year the Treasury has embarked upon a bond issuance program which aims to increase the average duration of US federal debt. So, the possibility of inflating away the value of US debt, step by step, increases. This perfectly fits the views of mrs. Christine Romer, economic advisor of the current administration. In her view the US gov. should do two things in order to come out of this economic misery: 1) start printing money aggressively, 2) debase/devalue the USD. So, at least the US gov. (Geithner ???) seems to be hell bent on destroying the credibility of the USD/US. It seems the FED is much more restraint in its actions.

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