We didn't start the fire

The Fed did.

This week, we continued our exploration of the volume clock that we started a couple of weeks ago.

The current volatility in the markets is, in some way, a blessing because it is allowing us to test our streaming and caching infrastructure.

Markets this Week

Much to everybody’s surprise, the Reserve Bank of India decided to keep rates unchanged. It is a bit of a head scratcher because the US is on an accelerated rate hike path and EMs usually try to get ahead of the US.

The US markets were all over the place. Thanks to Federal Reserve Bank of St. Louis President James Bullard saying that he supported raising rates by a full percentage point by July, markets are now pricing a 100% probability of 50bp hike in March.

A dovish RBI and a hawkish Fed is ultimately going to pressure the rupee.

Links

Quick thread on "price" changes and market makers. (TRA)

You can replicate the performance of the stock market at lower volatility with a series of government bonds. (klementoninvesting)

So who’s really the greater fool? (davetrott)

Thorstein Veblen’s Theory of the Leisure Class—A Status Update (quillette)

No-code robots are here. (robotenomics)

David Ingles @DavidInglesTV

And markets have done it again. As markets aggressively bring forward Fed tightening, they've also pulled forward the next slowdown/recession. A Fed rate CUT reappears on the Eurodollar curve. Timing? 2025.

Reduced access to contraceptives and the economic slowdown in 2020 induced a large increase in unplanned births for low-income families and a much smaller COVID-19 baby bust. (NBER)

Michael Pettis @michaelxpettis

1/7 "While Finance Minister Nirmala Sitharaman is betting infrastructure spending can have a multiplier effect on job creation and drive overall prosperity, the reality is it will take time for benefits to trickle down to those who need it most."

scmp.comIndia’s China-beating GDP target sparks soul-searching as economic gap widensHefty infrastructure spending will have a multiplier effect but economists say it will take time for benefits to trickle down. Meanwhile, there are worries the rich will get richer and the poor, poorer.

Meme of the Week