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Last week the latest CPI inflation data came out from the BLS. If you watched the news, they played it up. While we don't know what inflation will be with any certainty, stop watching the news and start watching the data for yourself. In this week's episode, Derek runs through factors to keep an eye on and where you can track the data for yourself. What's going in with rental car prices? What abou...

Container shipping rates are at all-time highs. So How bad is the situation? How bad is the backup at various container shipping ports? What effect is this having on inflation in the short term? Evergiven container ship released from Suez Canal     Busiest Container Shipping Ports Problems at Yantian port Ships anchored of container shipping ports causing backups The surge in Container shipping pr...

Dan McMullen Senior Managing Director and Senior Portfolio Manager in Blackstone's Credit Liquid Credit Strategies Unit, SPDR Blackstone Senior Loan ETF (Symbol: SRLN) joins the podcast to explain what senior loans are. How senior loans compare to leveraged loans and CLOs or collateralized loan obligations. Plus, Dan explains what the risks are, how they compare to high yield bonds, and what happe...

Often, we get questions on why one company's options are priced so differently than another. So how options prices differ based on implied volatility? What makes up intrinsic value vs extrinsic value in options premium? Compare a high volatility company to a lower volatility company in the options market. How to calculate expected single standard deviation expected move based on IV Implied Volatil...

The Federal Reserve this week held their June meeting and released their new dot plot. Chairman Powell also did his customary press conference. The Fed says inflation is transitory and likely temporary. Others disagree. They even said they are talking about talking about tapering. So is inflation out of control or transitory as the Fed claims. Plus, what did they do or did not do on policy changes...

ZEGA CEO Jay Pestrichelli and Derek are back together to discuss some surprising data that shows missing just the two best stock market days of the year can dramatically change returns. How Buy and Hedge Hedged Equity Strategy can be a hedge on missing out on markets when your fearful or bearish. Plus, life hacks from a 10-year-old and a famous Peter Lynch quote     Peter Lynch quote What is Buy a...

The Fed announced it plans to sell the ETFs and bonds it purchased. They are already doing reverse repo operations. Some have asked when they will reduce their monthly asset purchases. So, what is the Fed doing, and what are some potential things they might do?     Fed Taper? Fed Reverse Repo Overnight Market Fed Funds Rate Interest Rates Asset Purchase Program Operation Switch MBS Mortgage-Backed...

The Federal Reserve this week set a record participating in the Overnight Reverse Repo Market.   Previously in 2019 they had to enter the Overnight Repo Market as annualized rates soared. So, what are Reverse Repos? What are Repos? Why is the Fed trying to control interest rates by doing market operations in the Reverse Repo Market?     What is the Reverse Repos? What are Repos? What is the Overni...

Market Bubbles are tough to spot the absolute turning point. But most bubbles have the same stages and patterns. So what are some potential tells that we are in a bubble using historical examples? Comparing Dotcom Bubble to the Tulip Bubble. Are Bitcoin or Ethereum in an asset bubble?     What is an asset bubble? Stages of an asset bubble The housing bubble Dotcom bubble Tulip Bubble South Seas Bu...

Broken   Pie   Chart   |   Episode 116 With   Derek   Moore How is Inflation Measured? Sticky CPI vs Flexible CPI Show   Summary: All you hear these days on CNBC is inflation. How high will inflation go? What is causing inflation? But how is the CPI constructed to measure inflation? What are the weightings of CPI components? And, what is the PCE Inflation Index which is preferred by the Fed? • Wha...

Recently more and more investors are asking about Ethereum and Bitcoin. How much crypto currency should I have as a percentage of a portfolio? Is Bitcoin and Ethereum a good hedge against rising inflation? Derek and Jay Pestrichelli, CEO of ZEGA Financial, discuss what they are, the differences between them, and what is going on with Dogecoin?   What is Ethereum Crypto Currency? What is Bitcoin? W...

SPACs or Special Purpose Acquisition Companies 2021 growth has outpaced even 2020's record year. So, what are SPAC companies? Are SPAC companies good or bad? What are some famous SPAC companies?     SPAC Special Purpose Acquisition Companies SPAC timeline from creation to IPO of new company What Happens if the SPAC cannot find an acquisition target? SPAC companies have record 2021 with over $100bi...

Many investors saw a rise in rates causing negative returns on bonds in Q1 of 2021. Many were surprised. How is risk heightened due to low interest rates? Duration vs Maturity in understanding bond rate risk. Plus, how have US Treasuries performed by decade.     10 Year US Treasury Returns by Decade Duration vs Maturity to Determine Interest Rate Risk Coupon Payments Time to Capture Principle Call...

Marcel Benjamin, Fixed Income Strategist with State Street Global Advisors SPDR ETF Fixed Income Group, joins to present a deep dive into the High Yield Fixed Income space. What makes a bond part of high yield? What are the risks with High Yield Bonds? How do the ratings differ across the spectrum? Plus, what makes a company a "Zombie Company"?     • US What does it mean to be considered high yiel...

Spencer Wright from Halbert Wealth is back on the program to engage in a discussion around what makes up the Federal Budget. How much does all this cost and where do revenues come from? Plus, some thoughts around why MMT or Modern Monetary Theory may never work despite some economists' best intentions.       US Federal Budget Items What does the US government spend money on? What is the net intere...

Recently I looked up Google Trends to see how terms like inflation and stock market bubble were doing? They have been popular which means people are searching for them. Is this contrarian? How to play armchair stock market valuation game by looking at expected earnings. US Treasuries had the worst quarter performance since 1980 and third worst since 1830. GDP growth according to Goldman Sachs will...

Recently John Hussman put out a piece that the expected value of a 60/30/10 stock and bond portfolio over the next 12 years would be -5%. Future projections can be wrong or right, but what he explained that the option value of cash or a hedged equity approach may be more suited. So how does hedged equity play into this? How Deal or No Deal game show explains the expected value calculation. And why...

Watch CNBC for more than 5 minutes and you are bound to hear discussion around is inflation coming? Are rising interest rates going to sink the stock market? But what has the stock market done historically during periods of rising rates? You might be surprised to find out. Take a look back at S&P 500 Returns in rising rate environments, rising inflation, rising unemployment, and more.       Once a...

Recently financial news media mentioned that bearish short bets against the US Dollar were the highest since 2011. But what is the dollar index and is it the best measure? What is the Trade Weighted US Dollar Index? What is the good and bad of a strong vs week US Dollar?     US Dollar Index Trade Weighted US Dollar Index Pros and Cons Strong Dollar Pros and Cons Week Dollar Short US Dollar positio...

Interest rates made a historic move higher last week as the treasury bond market sold off. But is this spike in interest rates previewing a higher move in inflation in the short term? What are breakeven inflation rates saying? Is the FED owning 30% of the TIPS bond market skewing inflation expectations?     What is duration risk in bond portfolios? How does lower rates extend duration risk in bond...

Bonds prices are a function of current interest rates compared to their present value of cash flows and return of capital (baring defaults) at maturity. So, with interest rates so low around the world, is this a period of higher risk in bonds (fixed income)? How much more sensitivity to interest rate changes do we currently see in the sector? How do callable bonds mute the positive effects of redu...

This week Jay Pestrichelli and Derek Moore are back to discuss whether Bitcoin or Gold are good hedges. What the appeal of cryptocurrencies are? How just being long the market while have a hedged floor in the portfolio allows investors to be in the historically best inflation adjusted return asset.   Appeal of Bitcoin How Inflation is hurting the dollar's purchasing power Gold as an inflation hedg...

This week we follow up on or episode last week covering what the Gamestop short squeeze was all about. Are hedge funds naked shorting stocks? How margin accounts cause risk to brokerage firms like Robinhood. Why didn't Gamestop do a secondary offering selling shares when the price was high? Why short sellers don't ruin companies outright.   Naked Short Selling Failure to Deliver Shares Reports FTD...

The Wall Street Bets community executed a short squeeze through Reddit on stocks like GameStop and AMC Theatres this week. But what is a short squeeze? How did they and others buying stocks and options cause the stock to go up at least in the short term? Is short selling bad? Why potentially some brokers had to halt trading in certain names? A look back to the late nineties when internet chat room...

Lately things like the Universal Basic Income (UBI) and Social Security are debated on TV. Commentators throw around numbers and whether a program can be paid for. Plenty of debate on each side but why not understand for yourself where all these numbers are coming from. In this episode Derek Moore covers what makes up the Federal Budget, Tax Revenue, Interest Payments on Debt, and how much somethi...