Markets

You may occasionally hear about “yield inversion”, which is usually referring to the difference in yield between the 10 year and the 2 year US government treasury bonds. This number often gets mentioned in the news because when the value goes negative, it’s often interpreted as a sign that we’re either in a recession, or about to be in a recession.

Life is a series of random walks. Even if you walk the same path every day (in the literal sense), your individual steps on every walk you take are essentially random, and for the most part you aren’t even conscious of them because this is handled by muscle memory. When I say the steps are random, what I mean is that if you could precisely measure every step you take, where your foot lands, how much force you apply with your individual muscles to all the components of your leg and foot and torso and so on, the data would appear to match a pattern from a statistically perspective, but each individual step would have a normal random distribution.

I remember when my first serious girlfriend broke up with me, which was decades ago. Her chief complaint at the time had to do with some recent event, the nature of which I do not recall, but I do remember our conversation about it. In particular, I pleaded with her and explained how she was clouded by recency bias, and focusing on the recent negative experience while forgetting all the good experiences.

I’ve made my share of bad predictions. I’ve had lots of good predictions too. And being right often doesn’t matter, because in the end almost nobody will care if you were right or wrong, and if you’re going to go about placing bets based on your predictions, it’s incredibly difficult to get the timing right.

Over the past few weeks I’ve noticed an increase in commercial real estate vacancies around Manhattan, especially ground level retail. Tonight on my walk, I took some photos around Flatiron, NoMad, and Union Square. A few of these places were vacant before the virus came around, such as the Belgian beer spot.