12 Years of VP vs Noise
Sharing the ideas and experiences that have influenced our work
US economic outperformance supports USD rally
We continue to expect US economic outperformance in the coming months, which should attract capital towards the US, boosting the USD. Although US PMIs are no longer elevated vs the rest of DM, the previous surge has yet to play out, and offers a long 12 month lead on...
When to buy EM debt
Real yields are much higher in EM vs DM, and the spread is the widest in 20 years. Source: Bloomberg, Macrobond, Variant Perception With many EM central banks committing to hiking cycles and front-loading rate hikes to combat surging inflationary pressures, nominal...
A garden is never finished
When I think about creating a great service, a quote by Czech writer Karel Capek comes to mind: "A garden is never finished. In that sense it is like the human world and all human undertakings". At Variant Perception we strive to improve upon yesterday, from the...
Back to the Seventies?
Inflation tends to operate in regimes: unanchored vs anchored, and this often coincides with political regimes. Activist governments and policy coordination with central banks often feature in, and contribute to, high inflation. And we tend to see wealth...
The crude oil recovery
US petroleum product data shows that diesel and gasoline consumption is recovering strongly. Back in May, we had flagged the potential for a bonanza summer travel season that could boost oil demand. This is kicking in. Source: Bloomberg, Macrobond, Variant Perception...
US labor market: issues under the surface
The US labor market has structural problems that are more significant than a headline unemployment rate nearing 5% would suggest. The skill mis-match narrative is visible in the data. The ratio of hires to job openings has collapsed. Source: Bloomberg, Macrobond,...
The “cause of” and “solution to” rising prices
Industrial concentration in the US economy has been a persistent theme over the past 3 decades. Corporate profits' share of GDP has shifted up to a higher level compared with any other time in the post-war period. Source: Bloomberg, Macrobond, Variant Perception The...
Making VP work for me
3 years after graduating I was on a very comfortable path at a big investment management company where I could steadily progress up the ranks and make a good living. Instead I decided to join Variant Perception. I wanted to learn more, grow more and risk more....
Phases of a bull market
A bull market can usually be classified into 3 phases. Phase 1 is where the "easy" gains occur, there is widespread skepticism towards the equity rally and valuation multiples surge in anticipation of the coming recovery in earnings. Source: Bloomberg, Macrobond,...