Trading Blog

Hyperinflation refers to a situation in which goods and services inflation is very high and typically increasing in a non-linear way. The real value of the currency declines. People who earn their money in that currency are increasingly incentivized to convert their holding of said currency into more stable stores of wealth. This includes more […]

‘Bond vigilantes’ are supposedly the traders who regulate interest rates based on the notional intrinsic value of bonds. Governments all over the world are stimulating economies in a big way and showering money all over the place to offset the drop in demand. In an bygone era with less government intervention in the bond market, […]

The coronavirus has hit the economy in a way that’s entirely unique from what we’re accustomed to. Instead of recessions associated with overly tight monetary policy or crises brought on from too much debt coming due, a public health scare has shutdown large swaths of the economy. This closed down activity, reduced incomes, made debts […]

A demo account is inherently a different type of trading environment relative to trading the markets in real-time. Because real money is not committed to demo accounts, the results achieved from trading in a simulated, controlled setting can differ materially from the those achieved when trading the markets with real capital. The primary reason is […]

The coronavirus crash has brought on market conditions you rarely see. We’ve had exceptionally volatile markets, a level of which has exceeded that seen during the 2008 financial crisis and the Great Depression. However, during these previous events, fundamentally brought on by debt crises, discerning sophisticated investors could have done the calculations to understand that […]

What’s the difference between a recession and a depression? Most think of a depression as simply a really bad recession, but they are two distinct but naturally occurring events. The 2020 coronavirus crash is not a normal recession given pure monetary policy is ineffective being at the zero interest rate lower-bound and rates further out […]

Given the extreme volatility over the past few weeks, as the coronavirus shuts down businesses, hits earnings and jobs, and is having knock-on effects in the global credit system, some are of the opinion that the stock market should simply be shut down for a period. Markets are not serving some of their intended roles: […]

The 2020 bear market was the fastest drop on record, moving down 20 percent from its peak in only 16 days. As we covered in previous articles, the coronavirus crash is not just about the virus itself, but the fact that debt is high relative to income and that central banks no longer have the […]

The coronavirus crash is unique as a tail event and unique in that it represents the first major economic shock when policymakers lack the traditional ways of dealing with it. While the coronavirus is a serious infectious disease that has caused and will continue to cause economic harm, the financial and economic problems are much […]

Covid-19 has led to a hysteria that’s had big psychological impacts and developed into a widespread crisis of confidence. It’s bled into not only economic activity in a material way, but also future expectations of economic activity. Future expectations and how they’re discounted is what the markets care about. Where the coronavirus could go, how […]