I just read parts of this out loud to my partner over morning coffee. Thanks for the straightforward explanations without dumbing anything down. We're definitely bracing for a year of every mistake the powers that be can make, to be made & to make things worse. Every corporate media article and talking head telling us we're dodos for not seeing how great the economy has gotten today and sure to be better tomorrow reminds us how just how little truth there is in the news, even less 'news' in the truth. I'm no speculator but whatever happens, confidently state that these people are going to get more and more vicious as 2+2=4 bridges keep standing while 2+2=5 bridges collapse.
Great stuff yet again (not sure if it's because we're thinking in lockstep or because the analysis is very good. Or both.)
Re: inflation: the size of the beef herd is, or at least as of the end of 2023 was, at the lowest it's been since 1970 (according to USDA.) We (in our family) like beef. Fewer cattle = higher prices. Egg prices are up as well. And I won't mention bacon.
Jeff, you have been around long enough to realize the fed over does everything keep rates to high for to long keep them to low for to long. They real have no idea how to do anything. They have screwed things up for years and will continue to do so.
Seems like they are to cautious when the need to take risks and too risky when they need to be cautious. A bunch of over-educated but unwise people. Not to mention that the CPI is a completely rigged number that benefits the government and wealthy at the expense of normal people. This is the entire reason people understand that the economy is bad. Their experience speaks much louder than the propagandists for oligarchs pissing down our backs while telling us it’s raining.
I don’t have the numbers to prove it to you, but my gut tells me we are headed for some kind of major market correction related to the interplay between inflation, underemployment, and unaffordable housing, which will cause a critical mass of defaults in both residential and commercial real estate. This crash will cause a catch-22 for the Fed where they have to lower rates to prime the market but to do so risks more inflation. We are on the precipice of a downward spiral. It’ll be a miracle if we extract ourselves from it somehow.
Fed is, has been and always will be a political body that has over its history been far to accommodative of the wishes of the white house. Real inflation is on its best days is around 4-5 percent, that joke of a number associated with CPI has way to much funny business and make-believe going on with its calculation- rents and "utility" anyone? Another measurement that is the red headed step brother of CPI would be unemployment. In both cases going out at lunch, and tossing dice for each would yield you numbers as accurate as the one's produced. Methodologies only a marxist could love, or I like to call it, "Rigging Perception", which is the only thing you have to adjust for these days to get done what you want. I agree that Powell won't lower rates, if for no other reason he does not politically want to blink first. I also don't think he has any reason to lower them yet. The amount of drunken sailor money sloshing around the system is still rather excessively large and real inflation is still above 10% using the CPI 1980 calculation and abstaining of make believe adjustments.
Ha, just read this and I made a similar post this morning on my Facebook page about the absurdity of the foolishness of those who were calling for six rate cuts this year 😄and just last week the prognostications of four rate cuts now, which both sound utterly ludicrous.
Love your analogies about both bankruptcy and referring to Chance The Gardener!
I also agree with your trade idea about the butterfly q3q4 q1
We do have an irrational exuberance, but it's much more muted than the Clinton era.
Hell we could have a 15% sell-off and still being a bull market here and end the year positive.
-->"Heck, they used to talk and hold seminars on deflation at the Federal Reserve. Remember those halcyon days?"
Good grief. I remember attending Shadow Market Committee conferences discussing negative rates, the rationale and their implementation. LOL.
-->"Government is still spending money hand over fist like it is nothing and that’s not a cure for inflation."
Bingo. It currently looks like deficit spending destroys the economy as GDP grows less than the deficit. In other words, the govt spending multiplier is <1. It's a crude "back of the envelope" calculation but telling.
-->"the Fed is a political animal and will lower rates to make Biden look good at least one time ahead of November 2024."
The current Fed Chair(man)'s name is not Greenspan, Bernanke or Yellen--so less beholden to the president and/or partisan politics since Volcker. IMO.
I just read parts of this out loud to my partner over morning coffee. Thanks for the straightforward explanations without dumbing anything down. We're definitely bracing for a year of every mistake the powers that be can make, to be made & to make things worse. Every corporate media article and talking head telling us we're dodos for not seeing how great the economy has gotten today and sure to be better tomorrow reminds us how just how little truth there is in the news, even less 'news' in the truth. I'm no speculator but whatever happens, confidently state that these people are going to get more and more vicious as 2+2=4 bridges keep standing while 2+2=5 bridges collapse.
Great stuff yet again (not sure if it's because we're thinking in lockstep or because the analysis is very good. Or both.)
Re: inflation: the size of the beef herd is, or at least as of the end of 2023 was, at the lowest it's been since 1970 (according to USDA.) We (in our family) like beef. Fewer cattle = higher prices. Egg prices are up as well. And I won't mention bacon.
Hog farmers were losing $30 per head....https://www.tradingview.com/chart/rqcdi73I/?symbol=CME%3AHE1%21 but have been rallying to date....
Jeff, you have been around long enough to realize the fed over does everything keep rates to high for to long keep them to low for to long. They real have no idea how to do anything. They have screwed things up for years and will continue to do so.
Seems like they are to cautious when the need to take risks and too risky when they need to be cautious. A bunch of over-educated but unwise people. Not to mention that the CPI is a completely rigged number that benefits the government and wealthy at the expense of normal people. This is the entire reason people understand that the economy is bad. Their experience speaks much louder than the propagandists for oligarchs pissing down our backs while telling us it’s raining.
I don’t have the numbers to prove it to you, but my gut tells me we are headed for some kind of major market correction related to the interplay between inflation, underemployment, and unaffordable housing, which will cause a critical mass of defaults in both residential and commercial real estate. This crash will cause a catch-22 for the Fed where they have to lower rates to prime the market but to do so risks more inflation. We are on the precipice of a downward spiral. It’ll be a miracle if we extract ourselves from it somehow.
Fed is, has been and always will be a political body that has over its history been far to accommodative of the wishes of the white house. Real inflation is on its best days is around 4-5 percent, that joke of a number associated with CPI has way to much funny business and make-believe going on with its calculation- rents and "utility" anyone? Another measurement that is the red headed step brother of CPI would be unemployment. In both cases going out at lunch, and tossing dice for each would yield you numbers as accurate as the one's produced. Methodologies only a marxist could love, or I like to call it, "Rigging Perception", which is the only thing you have to adjust for these days to get done what you want. I agree that Powell won't lower rates, if for no other reason he does not politically want to blink first. I also don't think he has any reason to lower them yet. The amount of drunken sailor money sloshing around the system is still rather excessively large and real inflation is still above 10% using the CPI 1980 calculation and abstaining of make believe adjustments.
Ha, just read this and I made a similar post this morning on my Facebook page about the absurdity of the foolishness of those who were calling for six rate cuts this year 😄and just last week the prognostications of four rate cuts now, which both sound utterly ludicrous.
Love your analogies about both bankruptcy and referring to Chance The Gardener!
I also agree with your trade idea about the butterfly q3q4 q1
We do have an irrational exuberance, but it's much more muted than the Clinton era.
Hell we could have a 15% sell-off and still being a bull market here and end the year positive.
-->"Heck, they used to talk and hold seminars on deflation at the Federal Reserve. Remember those halcyon days?"
Good grief. I remember attending Shadow Market Committee conferences discussing negative rates, the rationale and their implementation. LOL.
-->"Government is still spending money hand over fist like it is nothing and that’s not a cure for inflation."
Bingo. It currently looks like deficit spending destroys the economy as GDP grows less than the deficit. In other words, the govt spending multiplier is <1. It's a crude "back of the envelope" calculation but telling.
-->"the Fed is a political animal and will lower rates to make Biden look good at least one time ahead of November 2024."
The current Fed Chair(man)'s name is not Greenspan, Bernanke or Yellen--so less beholden to the president and/or partisan politics since Volcker. IMO.