Insights on markets, emergent trends, history, innovation, risk management, global economics, strategy, policy, and other topics that catch our attention. Inspired by ongoing research, conversations and events. Written and edited by Osbon Capital Management and published every Thursday morning.

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2024 will bring more positive novel surprises. New years always do. In 2023, it was the dramatic acceleration in AI, which touches nearly every industry, and the early stages of an answer to the obesity epidemic with GLP-1s. Here is a list of what’s on our minds going into 2024.

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Rates, Credit, Robotics, BloombergGPT

Rates vs Inflation Yesterday the March CPI print showed a 5% increase YoY, down from 6% in February. The Fed’s interest rate is also 5%, marking this moment as the first time that interest rates have at least matched inflation. It seems likely the Fed will raise rates to 5.25% in three weeks unless something new gives them a reason…

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Dimon and LUI’s

Jamie Dimon released his annual letter this week, giving us some insight into his view of the economy and the largest bank in the US. Here are some notes on what stood out: The term Shadow Banks was highlighted as a major competitive threat to JP Morgan and the entire banking industry. Shadow Banks is a vague term that’s meant…

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Fed Balance Sheet, Quick AI, Reserve Currency

Fed Balance Sheet The Fed expanded it’s balance sheet by $390B over the past two weeks as part of the Bank Term Funding Program (BTFP) in response to the collapse of Silicon Valley Bank. Starting in April 2022, the Fed began QT (quantitative tightening) reducing the balance sheet by $623B. Two thirds of that tightening was undone in just two…

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Rates, Populism, Banks Shift To Private Markets

Rates The Fed raised rates by 0.25% yesterday, as originally anticipated two weeks ago. That was before Powell spooked markets with talk of higher rates for longer, and then regional banks fell apart due rate hike induced bond losses. Despite all of the noise, the predicted 0.25% hike occurred. The next hike is over a month away, with another CPI…

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The Banks, Rates, AI Releases

The Banks Big questions remain following the collapse of Silicon Valley Bank. To start, who is to blame? It’s fair to say that both the Fed and SVB are responsible. The bank clearly mismanaged its risk in the face of rising rates. Social media and mobile apps also dramatically accelerate bank runs. Bond performance doesn’t get the headline coverage it…

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Fed, Organic Growth, AI Again

The Fed The primary story this week has to do with the change in expectations for the Fed’s rate hikes in the short term. The next rate hike on March 22nd marks the 1 year anniversary since the start of this rate-hike inflation-fighting saga. The Fed has gradually slowed its hikes over the past few months from .75% to .50%…

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AI Transition, Berkshire

AI Transition AI growth continues to impress. The number of offerings and the quality seem to improve on a weekly basis. Just about anyone is able to leverage it to their immediate benefit. We discovered ClaraLabs this week, a polite automated scheduling assistant that sends emails and follows up. Like many automated natural language tools, it’s surprisingly sophisticated and performs…

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Applied AI Examples & Rates

Brief Update On Rates Expectations The Fed’s interest rate policy is still the foot on the back of markets and the economy. 2023 will present us with the tail end of those hikes, but it’s not over yet. On March 22nd, the Fed will likely raise rates from 4.75% to 5%, a quarter-point (.25%) hike. There’s an increasing probability we…

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Inflection Points, AI’s Sydney

Inflection Points There is no shortage of bear market theories circulating in the investment community and media. While there are many intelligent reasons to be negative, there comes the point where reflexive bearishness turns into a blindspot. It seems likely to me that we are at that point today. There are a handful of key inflection points from recent months…

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