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Saxo Bank CIO and Chief economist Steen Jakobsen made a presentation yesterday following the Fed rate hike announcement. The macro presentation Goldilocks or Frankenstein was on the Technology Winter, Monopolies and FED policy mistakes.

Via email, Jakobsen writes ...

Dear All,

This is presentation I did yesterday at an event. The FOMC meeting to me indicates peak in expectations has been reached, confirming our long held view that the global credit impulse (which explains 60% of next 9-12 month activity) is kicking in negatively.

Monopoly operators like FANGS will be under pressure:

I did interview with Bloomberg yesterday which partly explains our reasoning: Zero Appetite for Tech Stocks Right Now.

We think there is risk of technology winter similar to what we saw in the 1970s and 1980s – the perception vs. reality of what technology can do is widest in history – there is an extreme naïve believe in the “benign” nature of it. That doesn’t mean technology will not do good or be productive but the expectations and what can be done and when is out of sync with reality. Furthermore the recent Facebook event also tells story of how these monopolies are out of control – intentionally or not.

Peter Garnry phrased it excellently in internal email to our team:

“….But even before this event self-driving car technology was over-hyped. Recent consensus at NIPS (the biggest AI conference) was that deep learning etc. where only deemed good at narrow applications and Hinton, the father of backpropagation igniting deep neural networks, has even hinted that self-driving cars are not around the corner.

Based on yesterday’s event I’m revising up the probability that we will see a new AI winter like the one in the 1970s and 1980s.”

Finally going into a FOMC meeting where markets positioning and rhetoric wish’ for four hikes instead of three – I think the biggest value – except agriculture is in long US rates – ie. long fixed income……


Med venlig hilsen | Best regards

Steen Jakobsen | Chief Investment Officer

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Goldilocks or Frankenstein?

I disagree with opinions that self-driving cars are not around the corner. But we need to define "around the corner". For the markets, 2022 is almost an eternity away.

Facebook problems are right here right now.

Look at the trailing 12-month Price-to-Earnings ratio of some technology companies: Amazon (P/E 250), Netflix (P/E 245) , Google (P/E 58), Facebook (P/E 31).

Trade Wars

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Today, Trump announced $50 billion in Tariffs. He says China is "Out of Control".

Excuse me for asking, but who is it that's "out of control"?

Policy Mistakes

Policy mistakes are visible everywhere. Yet few will see them until we have a huge decline in the stock market. It's coming.

Mind the Rear View Mirror

Nearly everyone is on the lookout for inflation.

Not me. I strongly suggest Inflation is in the Rear View Mirror.

Mike "Mish" Shedlock