The economic wizards all failed to see the massive inflation of the largest fiscal and monetary stimulus in history.
They new exactly what would happen. Intention. 2009 did not see inflation 2020 policies were designed to cause inflation. Not to mention insider trading and huge wealth transfer.
Webej
1 year ago
Ah. So they’re all playing ‘monkey see, monkey do’.
Perhaps it is a global conspiracy?
In any event, one can play ‘monkey do’ just as well without the whole priesthood of economists publishing super-expensive research & advice.
worleyeoe
1 year ago
“Add it all up and the Fed is poised to overshoot.”
Ending up between 4-4.5% by next spring is NOT an overshoot. One minute you say this is going to be a shallow recession, then the next you’re doom & gloom. Which is it, Mish? You’re building two different narratives, IMO. Maybe one of them is a hedge. IDK.
And, we both know that the Fed can’t let rates go past 4% by much, and they certainly can’t let them stay there past 2024 long-term. I looked at the fiscaldata.treasury.gov web site the other day. Unless I’m reading the info wrong, our total (public + intragov) interest on national debt is $668B through August with one more month to go in the FY.
So maybe the Fed is trying to engineer a shallow recession, giving them the excuse to drop the FFR back below 1%.
And, we both know that the Fed can’t let rates go past 4% by much
Can the fed allow 8% inflation indefinitely? What will that do to the economy? It would seem high inflation would inflate debt away so maybe that is the plan.
GodfreeRoberts
1 year ago
China is caught in a property bubble bust and is still trapped in export mercantilism.
Really?
In 2015, Beijing warned developers that the country had surpassed 90% home ownership and warned consumers for the umpteenth time, “homes are for living in, not for trading”. (In its GDP calculations, China values residential real estate at its newly built cost only. The US counts it as an income bearing investment based on imputed rents).
What burst was not a national property bubble like ours in 2008, but overextended developers who, ignoring the 2015 warning, had doubled down on a continued boom by borrowing abroad.
Nor is China mercantilist. Canada, measured by exports/GDP, is far more mercantilist, and Germany is off the charts.
You should write a book of common fallacies about China. Not that it would sell, but some bookworm at the FED might read it, and when things get desperate, pick it up as a manual.
Subtitle: What went wrong with the Western financial system.
8dots
1 year ago
CA exit the ICE Age, Kharkiv entered. This winter they will chop wood with axes to stay warm. The German 3M is : +0.6, the 10Y : 1.6%. Next year the German GDP expected to be minus (-) 2.3%. Next year The German 3M will be hooked to zero, the 10Y underwater. Gravity will pull US 10Y to near zero, while the front end will be hooked to 3.5% – 4%. If so, can the Dow stay high.
8dots
1 year ago
phil, ok
Maximus_Minimus
1 year ago
Just tried to purchase a 1-year term deposit, and the interest is less than the central bank interest rate. WTH?
SEATTLE–(BUSINESS WIRE)– (NASDAQ: RDFN) —A surge in mortgage rates over the holiday weekend sapped much of the remaining energy out of the housing market, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
Home-touring activity took a nosedive, and the share of sellers dropping their price remained near a record high. As a result of decreasing demand, fewer homes sold above list price than any time since February 2021, and average sale-to-list price ratio fell to its lowest level since March 2021. The typical home that sold during the four weeks ending September 4 went for 0.3% below its final list price following a year and a half of the average home selling above list price.
It seems that the mortgage-rate spike and declining demand discouraged homeowners from entering the market too, as new listings fell 18% year over year.
“It seems that the mortgage-rate spike and declining demand discouraged homeowners from entering the market too, as new listings fell 18% year over year.”
Agreed. In the Wall Street Cheat Sheet, this is the denial stage….”it’s a temporary set back and things will return to normal in a few months…”
Denial –> Panic –> Capitulation –> Anger!
By my math, Anger will hit after the elections…sometime in Q2 2023.
I’m sure this is true, but we’re still seeing HUGE price increases and motivated buyers in my area, Woodstock, GA. Granted, we’re definitely the upcoming, trendy city in NW ATL, but here’s a crazy example:
$830K is ludicrous for a $2,665 SF home! IMO, I mean like bat sh!t crazy. And this is what’s going to keep housing fighting tooth & nail for at least through the end of the year. There are still a fair number of people out there willing to drop big coin on houses. And IMO, all it’s really going to take is for rates to fall below 5% with a modest, national price decline of 5-10% for housing to generally stabilize next spring. I don’t see double digit price growth, but I think by late spring 2023, we’re looking at the end of national price reductions.
Tony Bennett
1 year ago
Canaries are coughing … make that hacking cough …
TREND TRACKER | DATA INSIGHTS | HIRING REPORT — Boston, MA, September 7, 2022: Based on the latest data from U.S. small businesses (SMBs), the demand for labor has declined again, with nearly two out of every three (63%) putting their hiring on hold because they can’t afford to add staff, and 10% of that group is laying off workers.
This decline is quite significant, as it’s 18% higher than it was in July (at just 45%). Beyond that, the percentage reducing their staff jumped 6% to 10% this month from just 4% in July.
These are two key findings from Alignable’s September Hiring Report, released today. These insights are based on a poll of 5,618 small business employers from Aug. 13, 2022, through Sept. 6, 2022.
Small businesses not hiring will make it easy for the Amazons and Walmarts of the world to snap up labor and those small businesses will have a harder time hiring back if they still exist. I think I read recently that UPS was trying to hire 100,000 drivers for the holiday season.. black friday just around the corner.
I am making a prediction, the next decade we will see a morphing into even larger giant corporations and most non-niche small businesses will become extinct. Of course, there could always be anti-trust furor again but we’ll see.
SEATTLE–(BUSINESS WIRE)– (NASDAQ: RDFN) —A surge in mortgage rates over the holiday weekend sapped much of the remaining energy out of the housing market, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
Home-touring activity took a nosedive, and the share of sellers dropping their price remained near a record high. As a result of decreasing demand, fewer homes sold above list price than any time since February 2021, and average sale-to-list price ratio fell to its lowest level since March 2021. The typical home that sold during the four weeks ending September 4 went for 0.3% below its final list price following a year and a half of the average home selling above list price.
It seems that the mortgage-rate spike and declining demand discouraged homeowners from entering the market too, as new listings fell 18% year over year.
TREND TRACKER | DATA INSIGHTS | HIRING REPORT — Boston, MA, September 7, 2022: Based on the latest data from U.S. small businesses (SMBs), the demand for labor has declined again, with nearly two out of every three (63%) putting their hiring on hold because they can’t afford to add staff, and 10% of that group is laying off workers.
This decline is quite significant, as it’s 18% higher than it was in July (at just 45%). Beyond that, the percentage reducing their staff jumped 6% to 10% this month from just 4% in July.