Leo Haviland provides clients with original, provocative, cutting-edge fundamental supply/demand and technical research on major financial marketplaces and trends. He also offers independent consulting and risk management advice.

Haviland’s expertise is macro. He focuses on the intertwining of equity, debt, currency, and commodity arenas, including the political players, regulatory approaches, social factors, and rhetoric that affect them. In a changing and dynamic global economy, Haviland’s mission remains constant – to give timely, value-added marketplace insights and foresights.

Leo Haviland has three decades of experience in the Wall Street trading environment. He has worked for Goldman Sachs, Sempra Energy Trading, and other institutions. In his research and sales career in stock, interest rate, foreign exchange, and commodity battlefields, he has dealt with numerous and diverse financial institutions and individuals. Haviland is a graduate of the University of Chicago (Phi Beta Kappa) and the Cornell Law School.


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In “Summertime Blues”, The Who complain:
“Well, I’m gonna raise a fuss
I’m gonna raise a holler
‘Bout workin’ all summer
Just to try to earn a dollar.”



Within and regarding marketplaces and other economic realms, as in other cultural domains, diverse storytellers create and promote competing perspectives, explanations, and forecasts. In this process, the selection and weighing of variables (“facts”, data, evidence, and factors) differs, sometimes considerably. Thus rhetorical crosscurrents and a range of marketplace actions in stocks, interest rates, foreign exchange, and commodities battlegrounds inescapably exist. And since opinions can persist or change, so can significant marketplace trends and relationships, sometimes dramatically.


In today’s entangled global financial marketplaces, battling viewpoints frequently involve assessments of inflation (especially in consumer price measures) and fears regarding recession (or at least stagflation).

Long run American marketplace history shows that substantially rising United States interest rates in key benchmarks such as the United States Treasury 10 year note leads to bear marketplaces in the S+P 500 and Dow Jones Industrial Average. UST 10 year yields began rising in early March 2020, accelerating upward following 8/4/21’s 1.13 percent trough as American (and worldwide) consumer price inflation became very significant. The S+P 500 peaked 1/4/22 at 4819, plummeting almost 25 percent collapse to its mid-June 2022 low.

A “too strong” US dollar also interrelated with (encouraged) ongoing price weakness in both emerging marketplace equities and dollar-denominated sovereign debt securities (both emerging marketplace equities and debt prices peaked in first quarter 2021). The very strong dollar and price slumps in emerging marketplace securities also helped to undermine the S+P 500. Prices for commodities “in general” climbed substantially after December 2021 (Russia invaded Ukraine 2/24/22), magnifying inflation concerns and levels and thus assisting the price decline in global stock marketplaces. Though commodities peaked in early March 2022, on balance they remained quite high until around mid-June 2022.

As prices tumbled in the S+P 500 and related financial arenas (such as emerging marketplace stocks; corporate bonds and US dollar-denominated emerging market sovereign debt), avid “searches for yield/return” transformed into fearful “runs for cover”. Consumer (Main Street) and small business confidence destruction interrelated with capital destruction (loss of money) by “investors” and other owners) in stock and interest rate securities marketplaces.


However, during the past few weeks, the S+P 500 has rallied vigorously, about 14.6 percent from 6/17/22’s 3637 to 8/3/22’s 4167. Given the high consumer price inflation pattern as well as concerns about feeble economic growth, what intertwined factors probably played key roles in this S+P 500 ascent?

Within the context of a long run trend for increasing yields, a modest interim yield decline in the UST 10 year can help to spark a notable rally in the S+P 500. Note the timing of the recent yield top in the UST 10 year note, 6/14/22’s 3.50 percent in conjunction with the S+P 500’s 6/17/22 trough at 3637. Also, perhaps the renewed slide in the overall commodities field (especially the petroleum complex) since its June 2022 interim highs allayed the inflationary concerns of some marketplace participants.

Share buybacks, disappearance of substantial stock “overvaluation” in yardsticks such as price/earnings ratios, and ongoing optimism that nominal corporate earnings growth will continue over the long run (perhaps keeping pace with the Consumer Price Index) also helped to motivate an interim bull move in the American stocks. Perhaps short covering in American stocks further inflamed the ascent.

What other interrelated phenomena probably have promoted the S+P 500’s summer rally, especially after the second low on 7/14/22 at 3722? The US dollar’s depreciation since mid-July 2022, although not substantial in percentage terms, arguably has inspired some buyers to venture into American stock playgrounds.

Wall Street and its economic and political allies have long popularized, often as part of American Dream wordplay, the outlook that over the misty long run, American stocks in general (the S+P 500; investment grade equities) will keep rising (at least in nominal terms). Thus the roughly 25 percent slump in the S+P 500 since its majestic January 2022 pinnacle perhaps looked to many “investors” like a good buying opportunity over the misty long run, especially as the UST 10 year yield arguably fell sufficiently from its mid-June 2022 crest to mitigate (at least to some extent) concerns regarding inflation (and Fed rate-raising).

Everyone knows that the American stock marketplace is an investment realm greatly favored by Main Street retail players. Wall Street and Main Street guides and their friends in financial media diligently advise Main Street on the merits (goodness; reasonableness) of investment in United States stocks (especially over the long run) as a means of achieving economic security and wealth.

Institutional players of course play critical roles in US and stock and interest rate securities marketplaces. But retail customers have a very substantial impact on stock price levels and trends. Moreover, in contrast with the situation of several years ago, in regard to the equity securities of key US corporations in general (and many Exchange Traded Funds/ETFs), Main Street over the past few years has benefited from rapid execution (internet) and low (or no) commissions. As the coronavirus pandemic emerged in 2020 and persisted into 2021, apparently many Main Street dwellers ventured into the US stock marketplace (not just large capitalization S+P 500-type firms). Many of these Main Street adventurers (investors, speculators, traders) were new participants in the stock trading game. Also, in an era of significantly rising (and high) consumer prices (note the trend since around mid-2021), probably stocks—like homes—can be an inflation hedge for some devoted financial pilgrims. Besides, speculators and traders, not only investors, seek to identify and profit from “good bargains” in stocks (and other marketplaces).

Many regiments of Main Street inhabitants raced into the exciting cryptocurrency wonderland during the global pandemic (and after the crash in the S+P 500 and Bitcoin to their March 2020 bottoms). Though cryptocurrencies generally have not yet won the honored “investment” badge, some believe cryptocurrencies (or at least some brands of it) are a “good investment” and “worth owning for a while”. In any case, many people have sought to make money by trading cryptocurrencies, usually initiating positions from the buying (long) side.

Despite America’s ferocious cultural wars across numerous economic, political, and social parameters, and despite declining consumer (and small business) confidence and widespread dissatisfaction with the overall direction of the country, American consumers in general (or at least the crucial high-earning and substantial net worth segment, the “haves”, have enjoyed substantial jumps in their nominal (and probably real) net worth in recent years.

The US and global stock marketplaces are far larger than cryptocurrency ones. But picture as well the noteworthy upward flight in recent weeks within another territory favored by some Main Street retail players: Bitcoin. Note the roughly similar timing shifts (trend changes) since first quarter 2020 for Bitcoin and the S+P 500. However, the impressive 40.3 percent upward march in Bitcoin from 6/20/22’s 17579 (another low 7/13/22 at 18892) to its recent high on 8/1/22 at 24658 probably encouraged to some extent the price rallies in the S+P 500 (and some other search for yield marketplaces).

Despite the withering slump in the S+P 500 since its 1/4/22 top and the bloodbath in many cryptocurrencies (Bitcoin peak 11/20/21 at 69000; note interim tops on 12/27/21 at 52100 and 3/28/22 at 48236 occurred alongside highs in the S+P 500), overall US household net worth (and thus nowadays probably still remains quite high. Thus “buying power” remained available from a substantial portion the Main Street (general public).

Some of this Main Street (retail) buying power, even in the face of notable CPI inflation and recession concerns, probably enthusiastically jumped from the sidelines into action in the S+P 500 (and other US equities) and some related playing fields, including Bitcoin, in recent weeks.


Institutional buying surely assisted the price rallies in the S+P 500 from its June 2022 and July 2022 troughs. But did institutional (Wall Street) money (insight and action) “lead” Main Street players into buying the S+P 500 around then? Probably not in a major way. Note the gloomy economic outlooks of the World Bank and International Monetary Fund released at that time. In addition, see the “dire” pessimism of “259 fund managers responsible for more than $700 billion in investments” [in other words, institutional/Wall Street types] manifested via a survey conducted between 7/8 to 7/15/22 by the Bank of America (cited on 7/19/22 by the NY Times website).

According to that Bank of America monthly review, optimism about global growth staggered to a record low, beneath levels in the immediate aftermath of the 2008 Lehman Brothers collapse. The share of respondents who believed a recession was likely was the highest since April 2020 (as the coronavirus pandemic emerged).

However, these institutional investors apparently were holding the most cash since October 2001, (after the 9/11 attacks), over 20 years ago. Consequently Wall Street (institutional) influence probably decided to put some of that extra cash to work and thus assisted (jumped aboard) the S+P 500’s rally from its June/July 2022 valleys.

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Summertime Blues, Marketplace Views (8-6-22)


In “Satisfaction”, The Rolling Stones sing: “I can’t get no satisfaction.”



“Economic” confidence and satisfaction levels and trends interrelate with patterns of and anticipations regarding “economic” performance. These variables entangle with and influence price trends in stocks and other financial marketplaces. Thus consumer (Main Street) confidence and similar measures can confirm, lead (or lag), or be an omen for future movements in GDP, inflation, the S+P 500, interest rates, and so on.

Declines in American economic confidence in recent times confirm deterioration in the nation’s (and global) economic condition. The severity of those confidence slumps probably warns of further ongoing economic challenges in the future. These looming difficulties include not only the perpetuation of relatively high inflation for quite some time, but also slowing and perhaps even falling GDP growth. Since America is a leading economic nation in the intertwined global economy, what happens there substantially influences and reflects economic performance elsewhere.


Regarding and within cultural fields, definitions, propositions, interpretations, arguments, and conclusions are subjective (opinions). So-called “economic” (financial, commercial, business) arenas and analysis regarding them are not objective (scientific). In any case, as they are cultural phenomena, economic realms are not isolated from “political” and “social” ones. They interrelate with them, and sometimes very substantially.

Evidence of substantial (and in recent times, increasing) “overall” (including but not necessarily limited to political or economic) dissatisfaction within America are not unique to that country. However, since overall and political measures of declining confidence within and regarding the United States both include and extend beyond the economic battleground, at present they consequently probably corroborate current and herald upcoming economic troubles (economic weakness; still rather lofty inflation) for the US.


Marketplace history is not marketplace destiny, either entirely or even partly. Relationships between marketplaces and variables can change, sometimes dramatically. Nevertheless, keep in mind that if prices for assorted “search for yield (return)” marketplaces such as stocks (picture the S+P 500) and lower-grade debt can climb “together” (roughly around the same time), they also can retreat together.

“Runs for cover” in recent months increasingly have replaced “searches for yield” in the global securities playground by worried “investors” and other nervous owners. Price declines in American and other stock marketplaces have interrelated with higher yields for (price slumps in) corporate debt securities and emerging marketplace sovereign US dollar-denominated notes and bonds.

The devastating price collapse in Bitcoin and many other cryptocurrencies surely has dismayed many yield-hunters on Main Street.

Declines in American confidence and satisfaction assist and confirm the price falls in recent months in the S+P 500 and other “search for yield” playgrounds such as corporate and low-grade sovereign debt. Thus confidence destruction has interrelated with capital destruction (loss of money) by “investors” and other owners) in stock and interest rate securities marketplaces. From the historical perspective, slumps in as well as very low levels for some of the confidence (“happiness”; optimism) indicators probably signal further price drops in the S+P 500 and interconnected search for yield marketplaces.


The beloved Federal Reserve and its central banking friends finally recognized that consumer price inflation is not a temporary or transitory phenomenon and have elected to raise policy rates (end, or at least reduce, yield repression) and shrink their bloated balance sheets. Yet inflation probably will not drop significantly for some time. Besides, how much faith exists that the Federal Reserve will (or can) control and even reduce consumer price inflation anytime soon? How much trust should we place in the Fed’s abilities? The Fed helped to create inflation (and not just in consumer prices, but also in assets) via its sustained massive money printing and ongoing yield repression, and the Fed did not quickly perceive the extent and durability of consumer price inflation.

Long run history shows that significantly rising American interest rates for benchmarks such as the US Treasury 10 year note lead to bear marketplaces in the S+P 500.The US stock marketplace has declined significantly since its January 2022 peak. Home price appreciation, a key factor pleasing many consumers, probably will decelerate, and perhaps even cease. The Ukraine/Russia war continues to drag on. Despite recent declines from lofty heights, prices for commodities in general remain elevated from the pre-war perspective. Global government debt is substantial, and fearsome long-run debt problems for America and many other countries beckon. American and international GDP growth has slowed. Stagflation and even recession fears have increased. The coronavirus problem, though less terrifying, has not disappeared.

Therefore many American Main Street confidence indicators probably will decline, or at least remain relatively weak, over at least the next several months.


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We Can't Get No Satisfaction- Cultural Trends and Financial Marketplaces (7-13-22)

GIMME SHELTER (AND FOOD AND FUEL) © Leo Haviland June 5, 2022

In “Gimme Shelter”, The Rolling Stones sing:
“Ooh, a storm is threatening
My very life today
If I don’t get some shelter
Ooh yeah I’m gonna fade away”



Not long after the end of the 2007-09 global economic disaster, American home prices embarked upon a sustained and substantial bull move. Economic growth, population increases, the American Dream’s ideology praising home ownership, widespread faith that a home represents a long run store of value, and tax incentives for home acquisition encouraged that rally. In recent years, the Federal Reserve’s sustained interest rate yield repression and extravagant money printing policies also boosted the consumer’s ability (reduced the cost) and inclination to buy homes. Homes, like stocks and corporate bonds and even many commodities, became part of the “search for yield” universe. The dramatic home price rally has not been confined to America.

The international coronavirus epidemic which emerged around first quarter 2020, made working in the office (or learning at school) appear dangerous. This inspired a ravenous appetite to acquire homes (or more space or quality at home) to escape health risks, encouraging the latest stages of the bullish house trend. Both central bankers and governments acted frantically to restore and ensure economic recovery and growth. Thus housing prices, benefited not only by the beloved Fed’s easy money policies, but also from monumental federal deficit spending.

Moreover, given the acceleration and substantial levels of American and international consumer price inflation over the past year or so, the general public increasingly has seen home ownership as an “inflation hedge”, not just as an indication of American Dream success and “the good life”.


Over the next several months, the intersection of the current major trend of increasing American and other interest rates alongside a gradually weakening United States (and worldwide) economy probably will significantly reduce the rate of American home price increases. Fears that a notable slowdown (or stagflation), and maybe even a recession, have developed. Even the ivory-towered Federal Reserve finally espied widespread and sustained inflation. So central bankers nowadays are engaging in monetary tightening. Further rounds of mammoth government deficit spending currently are unlikely. Public debt in the US and elsewhere rose immensely due to the huge government expenditures related to the coronavirus pandemic and the related quest to create and sustain economic recovery. As the US November 2022 election approaches, that country is unlikely to agree anytime soon on another similar deficit spending spree to spark economic growth. Some signs of moderation in housing statistics hint that home price increases probably will slow and that prices will level off. Thus the peak in American home prices will lag that in the S+P 500.

In regard to the present robust bull price pattern for US homes, there is a greater probability than most audiences believe that US home price increases will slow substantially. Nominal house prices eventually may even fall some. It surely is unpopular (and arguably heretical) nowadays to suggest that American and other national house prices eventually may decline. Yet history, including the passage from the Goldilocks Era to the global economic crisis period, demonstrates that home values, like other asset prices, can fall significantly.

“Runs for cover” increasingly are replacing “searches for yield” in the global securities playground by “investors” and other owners. Price declines in American and other stock marketplaces have interrelated with higher yields for (price slumps in) corporate debt securities and emerging marketplace US dollar-denominated sovereign notes and bonds.

Further declines in US consumer confidence probably will take place. Sustained lofty consumer price inflation (encouraged not only by core CPI components such as shelter, but also by high levels in food and fuel prices) distress consumers. At some point, generalized inflation accompanied by higher US Treasury and mortgage yields can slash home buying enthusiasm, especially if home-owning affordability tumbles. Although history shows that price and time relationships for the S+P 500 and US home prices are not precise, and though equities and houses have different supply/demand situations, stocks and home prices roughly “trade together” over the misty long run. In addition, substantial declines (and increases) in American consumer confidence intertwine with (confirm) major trends in the S+P 500. Consumer confidence has been slipping for several months; the S+P 500 probably established a major peak in early January 2022, and its decline of around twenty percent fits the conventional definition of a bear market.

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Gimme Shelter (and Food and Fuel) (6-5-22)


A character in the film “It’s a Mad Mad Mad Mad World” reasons: “Now look, let’s be sensible about this thing. There’s money in this for all of us. Right? There’s enough for you, there’s enough for you, and for me, and for you, and there’s enough for…” [They all race to their cars]. (Stanley Kramer, director)



Sustained rising United States Treasury interest rates and a strong US dollar have played critical roles in creating the January 2022 price peak for and subsequent declines in the S+P 500. Increasing yields not only in America but also within emerging marketplaces, as well as the powerful dollar, assisted the construction of the earlier high (around February 2021) for emerging marketplace stocks in general. The ongoing UST and other yield climbs of recent months alongside the strong dollar have reestablished long run price and time convergence between the S+P 500 and emerging marketplace equities. The major trend toward higher US and other rates, alongside the high US dollar, and interrelating with the downward trends in the S+P 500 (and other advanced nation stocks) and emerging marketplace equities, probably have created summits for commodities “in general”.

The price spike in commodities (enlist the broad S&P GSCI as a benchmark) beginning in December 2021/early 2022 of course underscored inflationary fears, which assisted the rise in interest rates, thus helping to precipitate down moves in the S+P 500 and other stock marketplaces. However, the rising UST (and international) yield trend and strong dollar situation preceded the Russian invasion of Ukraine in late February 2022.

For a long time, yield repression by the Federal Reserve and its central banking friends created negative real returns relative to inflation for US Treasury and many other global debt securities. This very easy money policy (assisted by gigantic money printing/quantitative easing) and enormous US (and other) government deficit spending (especially after the advent of the coronavirus pandemic in early 2020) generated enthusiastic quests for yield (adequate return) by investors and other traders in stocks, lower-quality debt instruments (such as corporate and emerging marketplace sovereign bonds), and commodities. This helped to produce monumental bull trends in these playgrounds. Wall Street and the financial media eagerly promoted the reasonableness of these yield hunts. The sleepy Fed watchdog and other virtuous central bankers were long complacent about inflationary dangers, labeling inflationary signs as temporary, transitory, the result of supply bottlenecks, and so forth. Nowadays, these more vigilant guardian bankers, alarmed by the highest inflation in several decades, have commenced a rate-raising campaign.

Thus the sunny “search for yield” landscape for the S+P 500 and associated stock, debt, and many commodity marketplaces has darkened. An anxious “run for cover” liquidation of assets by many investors and other owners probably has been underway. Compared to the time just prior to the 2020 coronavirus pandemic (and the 2007-09 global economic crisis), the Federal Reserve (and other central bankers) and the American and other national governments probably have much less ability to readily rescue the S+P 500 and other “search for yield” marketplaces.


Previous essays noted that the S+P 500 probably peaked on 1/4/22 at 4819. Looking forward, the S+P 500 probably will venture significantly beneath 5/2/22’s 4063 low. The bear trend in emerging stock marketplaces will continue. Over the long run, given the American (and global) inflation and debt situation, the yield for the US Treasury 10 year note probably will ascend above its recent high around three percent, although occasional “flights to quality (safe havens)” and thus interim yield declines may emerge. Remember that the dollar rallied from April 2008 to March 2009, alongside the S+P 500’s collapse from its important mid-May 2018 interim high (S+P 500 major high October 2007) to its major bottom in March 2009. However, and although it is a difficult call, the current bull trend for the United States real Broad Dollar Index probably will attain its summit in the near future. Commodities in general (spot; nearest futures basis) probably made a major high in early March 2022 and will continue to retreat, although there may be brief price leaps above previous tops in “have-to-have” (very low inventory) situations.

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Running for Cover- Financial Marketplace Adventures (5-3-22)