Lightnews — Scholar-powered news

Tomas Hirst

@tomashirstecon.bsky.social

5.6K followers 730 following 6K posts

Strategy & Asset Allocation. Queasy metropolitan liberal. “Economist” - @t0nyyates

Posts Media Videos Starter Packs

Pinned

Tomas Hirst @tomashirstecon.bsky.social · Nov 10

Hello new Bluesky-ers! Guess I should do one of these awkward introductory posts - work in asset allocation but mostly here for finance, economics, social policy and politics (though the last almost exclusively through a policy lens). Frequently snarky, but aspiring to avoid cantankerousness.

1 3 30

Tomas Hirst @tomashirstecon.bsky.social · 21h

That might be wrong - they’ve shifted a huge amount in the past 15 years so nothing is impossible. But each successive government has failed to contend with the collapse of the underlying economic theory - which really was the coordinating force. Could a new model emerge though? Possibly.

1 3

Tomas Hirst @tomashirstecon.bsky.social · 21h

I think *this* Tory party will struggle to shift because it’s lost a sense of fundamental purpose and the soft centre-right pitch is much better articulated by e.g. Lib Dems who are less tied to small state roots.

1 2

Tomas Hirst @tomashirstecon.bsky.social · 22h

This is a good read. Echoes some of the points I was trying to make here: skywriter.blue/pages/did:pl...

1 5

Tomas Hirst @tomashirstecon.bsky.social · 22h

It’s a good read indeed. My theory is that the ethnonationalist turn is an outgrowth from the One Nation tradition - in part because the radicals shifted from small-state economic theory to in-group/out-group economics. Tried to lay out thoughts briefly here: bsky.app/profile/toma...

Tomas Hirst @tomashirstecon.bsky.social · 6d

Ok, so I think we need a rundown of Conservative economic theory and why the party cannot get its head around any coherent stance.

1 3

Reposted by Tomas Hirst

Moyeen Islam @moyeen.bsky.social · 1d

“Tell me you don’t understand centrally cleared swaps and counterparty risk without telling me you don’t understand centrally cleared swaps or counterparty risk”

1 4

Reposted by Tomas Hirst

Tomas Hirst @tomashirstecon.bsky.social · 1d

Purloining from my replies: It’s all an extension of “we understand that there is systematic regulatory, legal and governance erosion happening but I don’t think it will impact MY asset class”

Tomas Hirst @tomashirstecon.bsky.social · 1d

Seriously, I’m a bond guy deep down but we gotta know when we’re reaching for “there’s got to be another leg to this trade”

1 6 21

Tomas Hirst @tomashirstecon.bsky.social · 1d

The risk that that wouldn’t cascade through corp markets is though. So I think if not zero then pretty close to it. Bigger risk of persuading a compliant Fed to do de facto financial repression.

Tomas Hirst @tomashirstecon.bsky.social · 1d

Seriously, I’m a bond guy deep down but we gotta know when we’re reaching for “there’s got to be another leg to this trade”

1 6 21

Tomas Hirst @tomashirstecon.bsky.social · 1d

It’s all an extension of “we understand that there is systematic regulatory, legal and governance erosion happening but I don’t think it will impact MY asset class”

1 6

Tomas Hirst @tomashirstecon.bsky.social · 1d

Yep. Inclusive of the cash/cash equivalents on balance sheets of the IG corps themselves. It’s a bad idea that always end flat on its face.

1 3

Tomas Hirst @tomashirstecon.bsky.social · 1d

Also lol at the timing. Let’s see where IG spreads open next week.

1 1 4

Tomas Hirst @tomashirstecon.bsky.social · 1d

But in the end, it was a pretty dumb trade even in real time.

Tomas Hirst @tomashirstecon.bsky.social · 1d

*buy

Tomas Hirst @tomashirstecon.bsky.social · 1d

I mean, I could be nicer but in that case there were a load of specific reasons about people who couldn’t (for mandate reasons) own the government paper but *could* by the corp. So technical reasons with a local flavour.

Tomas Hirst @tomashirstecon.bsky.social · 1d

It’s always worth knowing what the difference is between the spread over govies and the spread over swaps because it tells you what *kind* of risks you are riding (interest rate; term premia; credit; liquidity) and where that compensation is accruing.

2 1 6

Tomas Hirst @tomashirstecon.bsky.social · 1d

(NB that excess return maths applied to a 12M window)

1 4

Tomas Hirst @tomashirstecon.bsky.social · 1d

Anyway, when we’re into “don’t believe the evidence of your eyes” territory for valuations then it should be a warning sign. If something looks expensive, sometimes it just is.

1 1 11

Tomas Hirst @tomashirstecon.bsky.social · 1d

Spread breakevens at the long end of the US IG curve are now 10-13 bps. That means that if the spread over duration-matched government bonds increases by 0.1pp you would expect to lose all of the excess return you thought you were getting. And, sure, spread vol is extremely low but it mean-reverts.

1 1 10

Tomas Hirst @tomashirstecon.bsky.social · 1d

Expanding term premia is something to watch, but corporates are not immune to increases in risk premia that impact the sovereign (including sov supply risks). Idea that can price independently from the sov cash curve is…not particularly compelling (albeit it might happen in v high quality ratings).

1 7

Tomas Hirst @tomashirstecon.bsky.social · 1d

It is poss for corps to trade through sov bonds (e.g. Italian IG corps, Saudi Aramco at launch etc) but there are usually specific local reasons for this (in the case of Italy it was that ECB was buying IG corps at a larger scale than their share of the market; in Saudi case people lost their minds)

2 9

Tomas Hirst @tomashirstecon.bsky.social · 1d

Seriously, I’m a bond guy deep down but we gotta know when we’re reaching for “there’s got to be another leg to this trade”

5 9 55

Reposted by Tomas Hirst

Dan McCrum @mccrum.bsky.social · 1d

This isn’t funny. Judges only speak to the press when they’re in extreme distress

Leah Litman @leahlitman.bsky.social · 1d

More judges speak to the press (the NYT) about what a disaster the Supreme Court (specifically the shadow docket) has been - “incredibly demoralizing & troubling”; a “judicial crisis”; a “slap in the face to district courts.” www.nytimes.com/2025/10/11/u...

16 490 1.7K

Tomas Hirst @tomashirstecon.bsky.social · 1d

Yep, but this is I think an aggregation issue - it’s true there is a lot of e.g. corp cash but it is also extremely concentrated. Similar case for households even *within* cohorts.

Tomas Hirst @tomashirstecon.bsky.social · 1d

Not overly bearish at this juncture, but be clear-eyed about the risks we’re riding.

2 3

Tomas Hirst @tomashirstecon.bsky.social · 1d

And we are at a stage where paper wealth gains are tempting people to borrow against them in margin loan form. Again, this is indirect leverage that we won’t spot at corporate level.

1 2