CP-Cry — I think that section header would be a pretty good name change from “CPI”, especially given how high it has been lately. Once again, being the sudo-masochists that we are, traders and investors cannot wait to get punched in the face once again by inflation data. Bring on the pain.
Later this morning, actually who am I kidding, several hours ago based on when you f*cks probably wake up, the latest CPI will have dropped. At time of writing, leading economists and analysts pegged their best guess for November’s annual increase to 6.7%. Just as valid, I used a random number generator from 1-10 with two decimal places and after 10 spins, my average number was 5.48%. Wonder who’s gonna be closer.
In all seriousness, this is a big one. If inflation stats come in hotter than expectations, you can be almost certain JPow is going to speed up the process of monetary policy tightening by around 2x, finishing up in March 2022. That would open the door for rate hikes in the first half of next year. Recall, any rate hikes from 0% is a massive increase, so this would be a real thorn in the side of the market’s recent euphoria. As a forward looking mechanism, expecting any rate hikes will likely shift dollars from equities into bonds, something we haven’t seen at scale in a long time.
But, if my random number generator is right, who knows what’s going to happen. 5.48% is still pretty high, but then again, it is literally a completely random number. Fingers crossed for cheaper gas prices soon though.
Big Bore — Sorry, typo, meant to say the “Big Four.” Anyway, the Big Four accounting firms, being Deloitte, EY, KPMG, and PwC, posted their best performance this year since 2001. What else was happening in 2001? Oh that’s right, the Enron collapse, aka one of the largest accounting scandals of all time.
I mean, c’mon. Markets continue to hit all time highs, booms among literal meme-style investing across asset classes, the firestorm of SPACs and other garbage IPO’s, crypto crap, the Fed’s money printer, the White House’s money printer, and much, much more — is anyone else getting a bit nervous?
Basically, two things are driving the Big Four firms to near records. First, advisory revenues are through the roof. A huge spike in M&A activity, technology investments focused on WFH and cyber security, and getting certified woke on the ESG front have been the primary drivers.
The second driver, and likely the main one, is industry structure. Just the simple fact that we know them as the “Big Four” kind of hints that this is as oligopolistic as it gets. I’m literally writing this paragraph in a cafe on campus known as “The Deloitte Cafe.” So yeah, having it all to yourself is a pretty good recipe for skyrocketing revenues.
|
Iste ex et doloribus eos. Magnam sequi repudiandae et dolorum quas porro dolores. Aliquam occaecati ducimus omnis commodi excepturi tempore rerum.
Est quia eum tempore error autem et. Vero eligendi error aut veniam autem est.
Nulla modi dolores aliquid nulla repudiandae veritatis. Quia atque sequi atque sed optio quas rem nulla. Provident quo in ipsam et ipsa. Eveniet dicta quam dolores repellendus.
Vel recusandae corrupti quos facilis ut sed ad. Sed eligendi hic ipsa necessitatibus et et. Et laboriosam asperiores dolores libero facere quidem. Aliquid et voluptas quidem ut quasi ad. Aut culpa id occaecati velit sint quisquam nisi.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...