A Journal of Independent Research, Analysis,
 Opinion and Insight

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Not The Devil Incarnate
What MMT Says — And Doesn't Say — About Government Spending
The ink was barely dry on the $1.9 trillion Covid-19 relief package that Joe Biden made his new Administration’s first priority — much less on all the $1,400 checks the Act has sent flooding into the citizenry’s mail boxes and bank accounts — when the President was at it again. 

Washington finally got its long-delayed “Infrastructure Week,” as the Biden team plopped a $2 trillion legislative proposal to cover about half of his ambitious “Build Back Better” program in Congress’s lap. And the nation’s chief executive quickly hit the road, literally and figuratively, to sell his whopper of a maintenance plan to the American people. Given the pot-holed state of this fair land, it shouldn’t be that hard of a sell.

Value & Growth Duration
Much Closer To Each Other Than You’d Guess
4/02/21 8:00 AM
By Ben Inker
Over the last few weeks, we have seen a rise in bond yields alongside an outperformance in global value stocks relative to growth stocks. While we at GMO have certainly been happy to see some recovery in value stocks (and we are confident that this recovery has much further to run), the moves have only reinforced a narrative that has been gaining ground in recent years — that value stocks are a “shorter duration” asset than growth stocks and should naturally outperform whenever interest rates are rising and underperform when they fall.

“Return To Normalcy”
How It Looks In The Bond Market
4/02/21 7:00 AM
By John R Mousseau
President Warren G Harding made the term “return to normalcy” famous in the 1920 presidential election when he used the phrase as a campaign theme, promising to bring America back to what it was prior to World War I and the Spanish Flu pandemic, which gripped the nation and the world from 1918 to early 1920. Some people said that Harding should have used the word normality instead of normalcy; but Harding, a former newspaper editor, stuck to normalcy; and the catchphrase entered the pantheon of American political slogans.

Doing The Costanza
Which Prime Broker Bolted For The Exits?
4/02/21 6:00 AM
By Sal Arnuk
The largest single stock moves we have seen in my career have occurred during the Flash Crash, the 2008 Global Financial Crisis, and just this past week — specifically the move in VIAC. The move started earlier in the week, but it wasn’t before late Thursday and Friday morning that we heard of the large blocks being shopped by bulge firms, which were termed “involuntary selling.” We brought up holdings, and to be honest found ourselves a bit baffled.

Tales From The Bezzle
Lex Greensill And The Danger Of A Slick Salesman
4/02/21 5:00 AM
By Dylan Grice
We’re not sure how closely our research clients follow the goings-on in some of the more arcane corners of finance. We follow them intently because we invest in them, but every now and then something happens to bring the fringe to the frontline.

Dolan Discount Soars
Merger Plan Between MSGE & MSGN Gyps Shareholders
4/02/21 4:00 AM
By Jonathan Boyar
Dear James,

Despite Wall Street perpetually assigning the so-called “Dolan Discount” to entities you and your family control, we have found you to be an extraordinarily good partner to invest alongside. That is why we were extremely disappointed in the March 26th, 2021 announcement that Dolan-controlled Madison Square Garden Entertainment (MSGE) had agreed to acquire MSG  Networks  (MSGN), which is also Dolan-controlled, at a price that can  only be described as a takeunder.

Communication Services Sector
Price Is Testing A One-Year Uptrend
4/02/21 8:20 AM
By Jon Lin
The Communication Services sector posted yet another marginal new price high this month, but is now testing a one-year uptrend line (Fig S-2). Furthermore, the RS line continues to struggle near a three-year resistance level. [More]

The Underlying Bid
Its For High-Grade Credits With Low Valuations, Big Dividends
4/02/21 7:20 AM
By Blaze Tankersley
Arch Egos come and go on Wall Street. The bull isn’t going to be deterred for long by a manipulator getting caught out in a handful of 3rd tier names but it is surely an early warning, a clear sign of maturation in a bull market, anecdotally. [More]

Existing Home Prices
Breakout From 15-Year Base Could Turn Explosive
4/02/21 6:20 AM
By Andrew Addison
The DOLLAR Index broke down from a double top as I projected. But the Dollar Index didn’t decline as much as I projected. [More]

Bad Policy
Big Tax Cuts For Rich Bolster Neither GDP Nor Jobs
4/02/21 8:00 AM
By David Hope and Julian Limberg
This paper uses data from 18 OECD countries over the last five decades to estimate the causal effect of major tax cuts for the rich on income inequality, economic growth, and unemployment. [More]

Mission: Covid Recovery
How Can Rich World Bolster The EM’s Comeback
4/02/21 7:00 AM
By Project Syndicate
Just as no one is safe from COVID-19 until everyone is, a healthy post-pandemic global economy is not possible without a strong rebound everywhere. [More]

The Next Plague
What We Can Learn From Muddled Response To Covid-19
4/02/21 6:00 AM
By Andrew Atkeson
During the first half of the Twentieth Century, Americans enjoyed tremendous gains in health and life-expectancy as infectious diseases were drastically curtailed thanks to major medical advances and massive investments in sanitation and public health. [More]

Pandemic Dynamics
And How Behavioral Changes Bend the Curves
4/02/21 5:00 AM
By Andrew G Atkeson
Behavior importantly shaped the course of the COVID-19 pandemic, suggesting lessons for mitigating the impact of future infectious disease outbreaks, according to a paper presented at the Brookings Papers on Economic Activity conference on March 25.

WHO-China Wuhan Mission
More Critical Gaps, Less Cooperation, “Nothing To See Here”
4/02/21 4:00 AM
By The World Health Organization
The overall goal of the Joint Mission was to rapidly inform national (China) and international planning on next steps in the response to the ongoing outbreak of the novel coronavirus disease (COVID-191) and on next steps in readiness and preparedness for geographic areas not yet affected.

Acute Observations, April 2, 2021
Perceptive Commentary from March 12-April 2, 2021
4/02/21 8:00 AM
Financial Times Editorial Board
China runs its economy as it wishes and will not tolerate attention being drawn to human rights infringements. It is forcing brands into choosing between social responsibility and sales to one of the world’s biggest consumer markets. The silent treatment it has given to H&M is only the start of that test. [More]