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The Weekly Track flying-pigs

- The Weekly Track – Flying Pigs by Bob Savage
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While football maybe the focus for the US today post Superbowl LIII, the majority of the world is focused on the New Lunar Year of the Pig. Flying pigskins and flying pigs have similar hopeful outcomes. Given the Patriots 6th win, the statistical arbitrage points to a good equity market ahead. The long pass for a touchdown and the long game for economic supremacy, both are aimed at winning in a world of relative value full of debt. The world seems prepared like the game for boring defense against a host of leveraged fears. The week ahead brings the focus back to borrowing with the US 3-10-30Y bond sales for $84bn and bills for $134bn.

There are many things to play for in growth, demographics, productivity, innovation, sustainability and social mobility. The clash of cultures and lack of faith in the institutions of globalization post the great recession are not going to go away just because of a football game or a truce in the US/China trade war, or because the FOMC pause may lead to a cut, should the US need it. There is an anxiety to the melt-up in risk that just won’t go away and yet, the forces of FOMO and easy money elsewhere leave investors little room or time to wait. Defense is boring but necessary. We are living in a world that wants to believe the most fanciful of all – flying pigs – as the New Year brings an end to the 12-year cycle of Chinese astrology. Wear good clothes and don’t over indulge are the mantras. Unfortunately, the world of debt makes clear that many in the frontier and emerging markets have little room for cheer.