Any time I talk about the macro dynamics of the US housing market it sparks a lot of interest, so I'm making it my free blog app piece of the week: bobeunlimited.substack.com/p/us-house-p...

Since its hard to quickly substitute to domestic production & foreign retaliation comes, tariffs mostly end up being a tax hike on domestic HH and Biz that does little to change the external deficit over a timeframe anyone cares about. YTD view looks through noise of front running:

Tarriff collections keep slowly creeping up and now represent a roughly 1% of GDP tax hike since the new admin took over.

Forget the turkey and the fixings, the apple salad is the star of the Thanksgiving meal! Apples, green grapes, walnuts, dates, marshmallows and a whole lotta mayo.

A lot of rejoicing that the Beige book confirms a 25bps cut in Dec (instead of Jan) which of course doesn't amount to a hill of beans for the economy compared to the fact that the labor market is contracting.

Folks hoping that homes become affordable have one path to purchase a home - just hold off for about 10 years until their incomes to rise enough to pay today's sky high prices.

Easy Money Hopes Lean on Tough Reality Weaker data has renewed hopes for easy money ahead. While assets bounced, the moves have been muted vs the October euphoria, suggesting the ‘bad news is good news’ trade may be running out of steam. open.substack.com/pub/bobeunli...

The last time that US homes were this unaffordable was at the peak of the housing boom. It's going to take far more than 50bps drop in mortgage rates before there is a sustainable bottoming and reacceleration in the housing market.

US House Prices Are Too Damn High Lower mortgage rates aren’t reviving housing b/c prices remain too high, with ~15% price drop *and* 3% mortgage rates required for a cycle bottom. And with it neutering the Fed's top easing lever. bobeunlimited.substack.com/p/us-house-p...

Everyone feels like a genius today.

While managed futures ETFs often have higher expense ratios than typical ETFs, the fees remain far lower for retail investors than the vast majority of mutual funds running similar strategies and far lower than traditional 2&20 LP investments.

The Haunting of Abe’s Ghost Takaichi’s modest stimulus is colliding with a tighter BoJ, pushing yields higher. With economic malaise endemic, Japan requires much more aggressive policy efforts to reach escape velocity. bobeunlimited.substack.com/p/the-haunti...

Another good sign from this week's PMI data that European economic conditions are holding up well. bobeunlimited.substack.com/p/europe-low...

The challenge with any late cycle environment maintaining a sense of the macro economic reality even when market expectations are extended. More thoughts from my recent November macro webinar: www.youtube.com/watch?v=kbfB...

For all the hopes that lower mortgage rates would kick off a new round of housing strength, this week's existing home sales data confirmed transaction activity remains woefully depressed. bobeunlimited.substack.com/p/housing-sl...

Some signs in this week's data that UK inflation is now moving down consistently, which should provide some room for the BoE to deliver much needed easing and with it lower rates and a lower currency. bobeunlimited.substack.com/p/the-uk-adj...

The AI mania has gotten pretty extreme when all you see is anger from these investors at the suggestion the tech could be as impactful as personal computing over time.

Just the blurb from this week's blog app piece penciling out the AI impact on productivity generated a robust discussion, so figured I'd make it my freebie of the week: bobeunlimited.substack.com/publish/post...

Managed futures hedge fund managers have shown no outperformance persistence relative to their peers. If a manager was in the top quartile over the previous year they only have a 25% change of being top quartile in each of the subsequent 5 years. More here: unlimitedfunds.com/elusive-pers...

Your irregular reminder that PMI/ISM surveys are random noise which are best faded vs. followed, including the services PMI released today. bobeunlimited.substack.com/p/the-ism-an...

Boy That Escalated Quickly AI mania and easy-policy bets pushed assets to highs, but not even a good NVDA print and an employment report opening the door for a Dec easing could do enough to keep the euphoria from fading. bobeunlimited.substack.com/p/boy-that-e...

Managed Futures strategies have reliably maintained low correlation over decades to asset markets like stocks, with no evidence these managers have leaned into beta during the recent rally. Trouble is without lower fees managers take most of the alpha for themselves.

Weekly ADP adds a new timely labor market indicator to the mix. Looks like private sector employment got a bit better in early October, but has softened again into November. And remember this is during the time when ~100k gov employees were rolling off due to the buyout.

The job market remains mostly frozen (low hiring, low firing), though there are some incremental signs of rising layoffs lately. Most of the WARN rise in Oct looks concentrated in Washington state (AMZN and SBUX), but worth keeping an eye on. h/t @thedailyshot

Sputtering Wage Growth Hits Households With job gains near zero and wage growth slipping toward pre-covid levels, HH income is weakening just as inflation rises. That's creating a real challenge for a continued income-driven expansion. bobeunlimited.substack.com/p/sputtering...

Replication has come a long way since the first OLS regressions that inferred long moving averages of past positions. Today's Bayesian methods are better able to capture tactical shifts, as we explain in our how we do it video: vimeo.com/930370466?fl...

Wealth swings likely drive consumption more than it did pre-covid, but income growth is still by far the dominant driver particularly given the higher spending propensity. And remember 50% of HH wealth is in housing.

AI’s Modest Productivity Boost Three years into widespread adoption, AI has delivered a 0.4% productivity growth bump, putting it on pace with PC-scale lift at best (~1/2 the time) rather than radically reshaping the macroeconomy. bobeunlimited.substack.com/p/ais-modest...

Hedge funds don't have a strategy problem, they have a fee problem. So the best replication approach focuses on the returns before fees. It's not too hard to estimate in real time with the combination of data on fees, manager dispersion, and timely net index returns.

Even with the recent declines most investors in the Bitcoin ETFs are in the black. A move below 80k will wipe out their gains in aggregate and likely start kicking off questions about the unwinding of institutional allocations.

Folks focused on specific markets may not realize that financial assets peaked roughly a month ago, other than a post-end of shutdown moment of euphoria that quickly reversed.

Crypto Crash with Minimal Macro Impact Crypto’s $1T plunge sounds big, but the US macro hit is tiny on par with a typical 1d S&P 500 swing. While those concentrated in the assets will feel pain, the broader economy won't notice. bobeunlimited.substack.com/p/crypto-cra...

What's the best research sizing the amount of crypto-related borrowing outstanding and who has extended that credit to buyers?

Hedge fund fees haven't changed much from the old days despite all the efforts at similar returning lower-cost products. If anything passthrough fees are pushing costs upward again. So sure it's not 2&20, but its still 1.6% & 18%. www.bloomberg.com/news/article...

Japanese real GDP posted a 1.8% annualized *contraction* for the third quarter overnight. But the much bigger deal is real GDP is basically flat vs pre-covid levels, even 6 years later. Makes sense why the PM called BoJ tightening efforts "stupid."

Fall Spending Cools After Summer Surge The latest private sector data shows household spending has slowed back to a pace more in line with continued soft income growth, suggesting disappointment ahead when the government finally comes. open.substack.com/pub/bobeunli...

Aussie yields rose sharply this week as a red hot employment report reaffirmed the strengthening economy in contrast to most of the rest of the developed world. bobeunlimited.substack.com/p/australias...

Reeves politically-driven walk back on tax hikes needed for domestic fiscal discipline may well be short lived as the gilt market immediately punished the decision. Ultimately the UK has only one path ahead - lower yields and a lower currency. bobeunlimited.substack.com/p/the-uk-adj...

Another reminder for the crypto folks that gold and "digital gold" are not the same.

On the Excess returns pod this week we explored the simple macro question no AI techno optimist can answer well: "who will replace the spending if AI results in layoffs?" Great to catch up Justin Carbonneau and Jack Forehand: youtu.be/ygF4Nv01Thk?...

I'm sorry to report that all the hot air has come out of my favorite shitcoin, now down nearly 90% from peak. Looking for a new fave to track. Any suggestions?

The renewed breath of elevated inflation will likely give pause to many Fed voters weighing the risks on both sides of the mandate. h/t @thedailyshot

Yen fading back toward new lows despite falling US rates as Western investors long hoped for aggressive tightening doesn't appear to be coming anytime soon. bobeunlimited.substack.com/p/the-bojs-h...

European markets pushing to new highs lately as actual earnings growth surprised very depressed expectations. Emblematic of the Eurozone sweet spot discussed a couple months ago. bobeunlimited.substack.com/p/europe-low...

Lots of folks wrestling with whether the Fed will slow down cuts. Tension discussed in my blog app freebie this week: bsky.app/profile/bobe...

BAC data suggests recent consumer demand has been subdued relative to the summer surge, particularly in goods. Given inflation is running around 3%, not a particularly strong real demand environment. institute.bankofamerica.com/content/dam/...

China’s Deepening Malaise China’s slowdown is accelerating and yet policymakers remain unconcerned bystanders, suggesting the weakening is less a story of endemic misfortune, but instead of political intent. bobeunlimited.substack.com/p/chinas-dee...

Every manager spins a narrative on why their approach is better. Even Cliff Asness in this recent clip. That's despite overwhelming evidence of no institutional manager outperformance persistence beyond random chance. AQR's strategy is no different. youtu.be/VFb9TIHRimc?...

The US equity mania is global. Mag7 & meme stocks in particular. www.ft.com/content/833b...

The UK Adjustment Ahead Weak growth plus coming austerity creates pressures on the BoE to cushion the building weakness and with it bring both lower rates and a weaker pound ahead. open.substack.com/pub/bobeunli...