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To achive a "Soft-Landing" you need to preempt a big pick up in Job losses
"Save the ponzi, save the plebs" -yellen
Strength of Labor Market most important variable for 2024
Initial jobless claim is a good indicator of when FED should start cutting
Will fed pivot trigger another run up in inflation a la 1974-1982
compare 74-76 to 22-24...
EMification of usa markets
Japanification of the past is very different than today, today it is real negative rate & QE and covert debasement of currency
like bresil market - stairs down, elevator up ...
slow bleed , get inestor fustrated and out of nowhere it Rip up
just in time vs just in case ... in inflationary context
Oct'22-now is a big bear market rally ??
# No bueno list
- USDJPY > 161, for the first time since 1986.Z
former "safe heaven"
- dividend stock
- Utilities
- Staple
- Mag7 # want mag7 revenue to stop growing before shorting
Why ? because bond will take that place Why? ... ? equity risk premium ?
market correction likely this spring, but expectations is for equities to end the year higher
# Current rally
OCT 23 Rally started after Yellen QRA* issued 50B less bonds than the market expected topped at the start of april 24 with spy @ 525
5% correction in april with low @ 493, triggered by hot CPI and now 15 of may new ATH
' U.S. Treasury's decision to fund the U.S. deficit with shorter-duration bills rather than bonds.
The Fed finally took action on QT Tapering and will shrink its Balance Sheet starting in June
Freddie Mac filed a proposal with the FHFA (Federal Housing Finance Agency) to enter the secondary mortgage market (i.e. home equity loans), which could potentially unlock $980bn in equity for homeowners. Furthermore, if Fannie Mae and Ginnie Mac enter the market too, that figure jumps to $3 trillion. - covert fiscal stimulus plan for boomers
# Inflation
Fed needs to break labor market. I know there is a fantasy around this, but there is no escaping it. why? to get inflation back under control
If you need to break the labor market, you probably won't do that before an elections though..
Rational behind inflation second wave: productivity differentials (services/goods) and Granger causality (headline => wages => expectations => core)
2 type of inflation
wealthflation = price of financial assets,real estate, cost of private school...
plebflation = what we are experiencing, epicerie ect.. (more cpi like?)
Need to take notice of when number of 401K millionaires peak
# Technicals Analysis
S&P inflation adjusted did not hit new high...
S&P infla adj peak was 21-22
Equal weight S&p 500 not above its Dec23 high
ultimately we are trying to protect ourselves from the Tamagotchi and her covert debasement of our wealth.
Is crypto the equivalent of the german stock market during weimar ? probably yes
4x QQQ but also kinda of a hedge against currency debasement
. Maybe, just maybe, the main buyers of Precious Metals aren’t trying to hedge any Middle East escalation. Maybe the main buyers of Precious Metals are trying to hedge against Central Bank recklessness, Fiscal Profligacy and Tamagotchis.
loss of confidence in PMIs as a signal on the back of significant decoupling from PMI and nominal GDP growth ???
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