Denial is nature's defense mechanism against the hairless monkey...
The attention-grabbing headline this week was that this was the worst quarter for stocks in seven years. In reality, this is the worst fourth quarter for stocks since 2008. The bullshit artists are almost at a loss for words...
The attention-grabbing headline this week was that this was the worst quarter for stocks in seven years. In reality, this is the worst fourth quarter for stocks since 2008. The bullshit artists are almost at a loss for words...
Still looking in the rear view mirror to predict the future:
"...Markets and hard [past] data are sending different signals right now. And most economists are sticking with the latter -- along with survey numbers -- until a more decisive shift becomes obvious."
“Where is this recession the market is so worried about?”
Where it all goes sideways of course is when the well-ordered society charges off a cliff. After that, it gets a might bit more difficult to steer the herd. Which is where we are right now. All of the fake narratives that were no more than extrapolations of the recent past, are no longer working. Stories that rhymed so well when Ponzi inflow was accelerating, now ring hollow. $1 trillion in recent stock buybacks is entirely meaningless to current valuations - what some corporate dunce paid for a stock yesterday is totally irrelevant to what it's worth today.
What all of today's "pundits" assiduously ignore is the reverse wealth effect. The feedback loop between markets and the economy. They believed in it on the way up, but now they have amnesia on the way down. Preferring their Magic 8 ball over "markets", because what do they know?
What all of today's "pundits" assiduously ignore is the reverse wealth effect. The feedback loop between markets and the economy. They believed in it on the way up, but now they have amnesia on the way down. Preferring their Magic 8 ball over "markets", because what do they know?
Getting back to the casino, imagine if instead of gauging the health of the global economy based upon the S&P futures now led by recession stocks, instead it was gauged upon the rest of the world. Then, the real story would be a market that rolled over at the very beginning of the year, and is now resembling late 2015 as a best case scenario:
Oil is likewise staring into the abyss deja vu:
Europe: been there done that
Add the Brexit fiasco as another log on the bonfire
Add the Brexit fiasco as another log on the bonfire
Economists may be willing to ignore the inverting yield curve, but banks are not:
Getting back to the 2015 analog, the Fed raised rates in December of that year - one and done. That single rate hike imploded global markets. Now, they are on the precipice of doing the exact same thing. This time, desperate gamblers are looking forward to it:
"U.S. stocks had worst start to December since 2008"
“December hike is a go...With the decision a foregone conclusion, it will be Powell’s remarks in the aftermath that carry more weight"
"Whisper sweet nothings"
“The human mind feels most comfortable if there is a logic to what is going on in the world...markets get anxious if there are too many unquantifiable signals and no clear signs of a consistent narrative”
I offer a consistent narrative to put everyone's mind at rest:
