#105: Sponsorship Dreams

When I was a kid, I used to dream about being sponsored by any of the sporting equipment manufacturers, such as Nike. My dreams were further fuelled by one of my school teachers, who was sponsored by Nike as a middle-distance runner. He got what seemed like endless supplies of tracksuits, shorts, vests, and running shoes. I never got a sponsor; the closest I ever got was winning an open-sea swimming race. I recall receiving an envelope with crisp notes in it and thinking I was rich. I was on cloud 9. Is that an actual place?

It turns out that good dreams never die; they just change their form.

Last week, I was delighted when I got my first sponsorship from the excellent Norgate Data vendor. I was already a happy customer when I shared my plans for the future, and they were happy to partner with their data. You will hear more about this when I release the code I have developed. I am making good progress, so stay tuned.

This week I got an unexpected request to collaborate with a quant developer who shares my vision and we will be doing some cool stuff around trading strategies that you will be able to use to either do your own trading or subscribe to signals. I was already trying to squeeze some time out of my schedule to work on it, but there is very little time in my day that is free, so this will hopefully fastrack things along. I have a number of former colleagues who are also keen to collaborate, so I think the S2N site’s content is only going to get richer.

Finally, I am having a number of exciting conversations with a few brokers. The vision for Signal2Noise (S2N) is to create a platform that is rich in content, tools, mostly for free and a sense of community. I am feeling energised and excited for the next chapter of this journey. Feel free to reach out to chat with me if you think we could be a good fit.

I am embarrassed by my reluctance to internalise what was going on during the pandemic. I think I was too focused on the fact that the world’s economies had ground to a complete halt and that the economic consequences would be devastating. That was big-picture stuff; what I failed to fully grasp with hindsight is what was happening in response to the pandemic crisis in the here and now.

The government and central banks (are they really separate?) stepped in to save the day. I am going to just focus on the private household side of the balance sheet in today’s letter.

In the chart above, you can see that US Household Savings ballooned to more than $2.5 trillion with the aid of various stimulus cheques and the reduction in discretionary spending on things like holidays and eating out. Those savings have been spent, and the reckless abandon that comes with a bloated wallet or bank account is no longer a force for speculation to the degree it was.

I have been waiting for the other shoe to drop. That is, with higher interest rates, surely the burden of interest payments on debt is going to be a drag on growth, not to mention the effects of inflation. In the chart below, you can see the dramatic increase in interest payments since the pandemic.

I am a very punctual person, sometimes early but never late . You don’t just go through a one-in-a hundred year event and come out the other end in better shape than you went in. I have been into various commercial buildings lately, and the level of vacancy is worrying. I have also seen some interesting research on US commercial real estate loan delinquencies. We probably still have to suffer some long-term COVID effects. They don’t call me Bearman for nothing.

Seriously, I try my best to keep things real and not lose sight of the big picture, but I always keep a finger on the pulse.

I mentioned last Thursday that I thought Biden’s presidential campaign had hours or a few days left. The assassination attempt on Trump delayed things a bit, but I am pretty sure he is days away from throwing in the towel.

It looks like volatility has popped up; excuse the pun.

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