The market’s reaction to the May FOMC meeting was dovish. The minutes are another matter. Rate cut odds for July and September dropped on hawkish comments.
Fed May 1 Minutes Key Snip
Participants remained highly attentive to inflation risks and noted the uncertainty associated with the economic outlook. Although monetary policy was seen as restrictive, many participants commented on their uncertainty about the degree of restrictiveness. These participants saw this uncertainty as coming from the possibility that high interest rates may be having smaller effects than in the past, that longer-run equilibrium interest rates may be higher than previously thought, or that the level of potential output may be lower than estimated. Participants assessed, however, that monetary policy remained well positioned to respond to evolving economic conditions and risks to the outlook.
Participants discussed maintaining the current restrictive policy stance for longer should inflation not show signs of moving sustainably toward 2 percent or reducing policy restraint in the event of an unexpected weakening in labor market conditions. Various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate.
Pavlov’s Dogs
Like Pavlov’s dogs, the stock and commodity markets reacted in the expected way: Stocks are down about 0.6 percent, gold down about 1.7 percent, silver down about 2.8 percent, oil down about 1.5 percent, with copper leading the decline, down 5.7 percent.
The percentages are as of 2:30 Eastern.
Long-term bond yields barely budged. The 10-year Treasury note yield rose 1 basis point from 4.42 percent to 4.43 percent.
July Rate Cut Odds Drop Again
- A month ago, odds the Fed stood pat were 57.6 percent.
- A week ago, the odds were 69.0 percent.
- A day ago, the odds were 74.6 percent.
- Today, the odd the Fed stands pat are 82 percent.
Over the past month, the odds of a rate cut in July fell from 42.4 percent to 18.0 percent.
Looking Ahead
Looking ahead to September, the odds of a cut fell from 66.6 percent a month ago to 60.7 percent today.
There is no meeting in August or October. So unless there is a cut in July or an emergency cut in August or October, there will be at most one rate cut before the November election.
Are You Worse Off Than a Year Ago?
Meanwhile, let’s check out some charts from the latest fed survey on how well people are doing financially.
Between 2022 and 2023 the numbers improved (lead chart). However, the numbers are a disaster compared to the peak in 2019.
- Over 60: In 2019, 11 percent said they were financially worse off. In 2023, 29 percent said they were financially worse off. That’s a rise of 18 percentage points.
- Over 45-59: In 2019, 15 percent said they were financially worse off. In 2023, 35 percent said they were financially worse off. That’s a rise of 20 percentage points.
- Over 30-44: In 2019, 15 percent said they were financially worse off. In 2023, 32 percent said they were financially worse off. That’s a rise of 17 percentage points.
- Over 18-29: In 2019, 15 percent said they were financially worse off. In 2023, 29 percent said they were financially worse off. That’s a rise of 14 percentage points.
Do You Have 3 Months Emergency Savings?
The answer to the Fed’s questionnaire fully explains Biden’s slump in the polls, especially among younger voters and blacks.
Rent vs Wages
I created a new chart yesterday to see if it could explain why “You Doing OK Financially” peaked at the end of 2021.
From 2018 until 2022 the gap between rent and wages tightened. Starting January 2022 rent rose more than wages.
Meanwhile, cost of a mortgage rose from about 3 percent to over 7 percent in the same timeframe while the cost of a home increased too.
People Who Rent Will Decide the 2024 Presidential Election
I have been discussing rent and the election since January, and put all the pieces together in my April 20 post: People Who Rent Will Decide the 2024 Presidential Election
Q: What is it that young voters really have on their minds?
A: RentWho Are the Renters?
The answer is younger voters and blacks.
For more details and discussion of the Fed survey, please consider my post yesterday Fed Consumer Survey: Are You Worse Off Than a Year Ago?
It’s too late for a cut to do much of anything positive for Biden.
And if there is an emergency cut by the Fed, it will mean the economy went into a recession. That will not be good for the markets or Biden.
Nothing like a post about the Fed to get the doggies howling at the full moon. Or was that an ambulance siren?
Massive debtors do not set borrowing rates.
Massive debtors who “need” (in their minds anyway) to borrow more and more every year for decades to come do not set borrowing rates.
The Fed only matters when and if its patron Uncle Sam is solvent. Uncle Sam is broke, foreign creditors are limiting USTreasury purchases (and selling previous holdings).
The current “bi-partisan plan” is to run $2 trillion budget deficits – or more accurately $3.5 trillion spending deficits after one adds the “one time emergency supplemental spending omnibus” frauds that happen multiple times per year every year, every year is an emergency.
Guess what? Uncle Sam has to cut $3.5 trillion per year off its spending, or it has to pay whatever rate international lenders tell it to pay.
As long as the US government is run by octogenarians, marxists and corrupt career bureaucrats, interest rates will reflect the quality of the borrower … which is sh!t (apologies to actual sh!t that might have value as fertilizer).
As long as the US economy runs massive chronic trade deficits, it has to finance that by selling the family silver or via borrowing at whatever rate international lenders tell it to pay.
When you are addicted to spending beyond your means, you pay whatever the loan shark tells you to pay, or you sober up. Those are your only options.
It is amazing how many supposedly college educated economists can’t grasp this. Pull your heads out the clouds folks. You are spending addicts. Addicts are not in control
Looking forward to those 6% money market rates on CA$H which is upcoming. If you’re debt free, and a saver, you are finally going to get some kind of pay-day for the last 15 years of FED incompetence. The amount of money the FED has robbed from savers over the last 15 years is unbelievable/incomprehensible. If you’re in debt up to your eyeballs and have financed your life then ….well….good luck w/ that!
Rates should fall given the current path of monetary policy. But interest is the price of credit. The price of money is the reciprocal of the price level.
So, the correct policy is the 1966 Interest Rate Adjustment Act which drove the banks out of the savings business (even while the banking system expanded).
See, economists are stupid. Contrary to the ABA, savings flowing through the nonbanks never leaves the payment’s system. The NBFIs are the DFI’s customers. So, you drain reserves and cut policy rates at the same time.
Perhaps you would expand on this as to impact.
‘Drain reserves and cut policy rates at the same time’
Is that not what would be expected as outcome if there was an actual economy based upon market price setting in an Deflationary environment?
I realize we do not have a market based economy but some sort of Hybrid with Fed central planning causing distortions most everywhere.
My concern is that by stacking the deck Fed is inducing a market with very long Tails which when it breaks will also have a very long Tail in a decidedly unwelcome manner.
Thanks
The U.S. Golden Age in Economics was driven by 2/3 Vt and 1/3 M. Today we have the opposite scenario.
Lending by the banks is inflationary. Lending by the nonbanks is noninflationary. If savings are not expeditiously activated, then a dampening economic impact is exerted, e.g., secular stagnation.
Banks do not loan savings. Banks are not intermediaries. They are credit creators, not credit transmitters. Deposits are the result of lending. All bank-held savings are lost to both consumption and investment, aka Japan. Economists are dumb as a rock. None of them understand money and central banking.
Draining reserves destroys the money stock, reducing inflation. Activating savings into real investment outlets propagates R-gDp. The expiration of unlimited transaction deposit insurance is prima facie evidence. It caused the “Taper Tantrum” as predicted.
Long rates should be higher than short rates. The fact that they aren’t indicates La La land, especially for the 5year and 10 year Treasuries. Inflation is entrenched, and won’t be coming down anytime soon.
You are right, long rates should be higher than short rates. ….but if you look at FED history, you never know what these dumbfu*ks are thinking. Inflation may last 2yrs or 20 yrs……long rates are saying…..We have no clue and are not pricing in the future which we don’t know.
The fed is going to have to raise interest rates. Inflation will continue to rise each month. Labor rates alone significantly increase prices.
The cycle of higher labor rates can only be ended with unemployment.
Logically that makes sense but there are too many union contracts in force. We also have some blue states with outrageous minimum wage laws. The companies can only layoff so many workers in certain industries. The coming depression will cause companies to file bankruptcy which will break the contracts and then prices will come down.
Really…, you won’t read this kind of stuff here generally but check this out and tell me what is “outrageous”. link to wsj.com (I hope you can read it but there might be paywall, it is about how CEO compensation went out of control last 14 years). Minimum wage barely moved, let alone keeping up with “2% inflation” until covid hit. What is the definition of minimum wage to you?
We are now in a proxy war against China. Taiwan is being encircled by China. US ships guarding Taiwan have gone into red alert.
I smell a black swan event coming.
So how do we profit? Short the chip stocks? Give us some profitoonities CO.
Do what you want. This is the best way to profit from what life offers.
With the ability to buy $1,000,000 t-bills at a shot and millions overall invested in t bills, stocks, owning multiple homes across the country and world, a cache of rentals across the country, able to now make calls wearing a $10 t-shirt instead of those custom made $350 royal oxford shirts and not owning a car, raking in those big paycheques, its amazing all you do all day in post on Mishes site.
Just wondering how do you make those calls with no car?
This you?
link to reddit.com
Your comments sound like most of the stories on the link above.
He hangs out in one of those rooms with photos thumbtacked to the wall with strings running between them.
Bottle cap futures.
You can open an undertaker business with body bag business on the side. Body bags made in China, of course.
Rate hikes won’t be enough. The Fed, OCC, Treasury and CFTC need to do the following:
– reregulate derivatives at 1990s regulations.
– hike rates
– remove money from the money supply until deflation takes hold
– ban any trading on commodity futures where there is no risk of taking delivery of the commodity
– unwind the banks with known default in the future
– unwind the commercial real estate market the Fed has been supporting
– unwind the corporate bond market the Fed has been supporting
– force banks to liquidate all dead assets in commercial real estate.
The markets may crash but this is needed. There has been a lot of pretending going on.
anything to stop SPENDTHRIFT corrupt spending by our
TERRORISTS of DC
Yes, hike the rates. Get rid of inflation already.
It’s a good thing the Fed is looking to raise rates. They have a lot of mopping up to do from being way too stimulative the past 25 years. The bond market is going to move rates lower into the election and then rate should move sharply higher out of the 54 month low. If the Fed lowers rates near election time, then they will have to raise them by Christmas. The optics definitely won’t look good for them.
The DIDMCA of March 31st, 1980, turned the thrifts into banks and caused the S&L crisis. Janet Yellen at the FSOC wants to destroy the nonbanks once again.
You can’t believe anything you read or hear because the economists don’t know a debit from a credit. There is literally no one that understands macro.
Jerome Powell and George Selgin think banks are intermediaries. They think there’s no difference between money and liquid assets.
The future has never been so bleak.
The recent surge in the money stock (which is not properly counted), was due to the draining of the O/N RRP facility. Stocks don’t go up without extra liquidity. Yes, the FED screwed up again.
There is still some room to lower rates as the economy is now slowing.
You can’t believe anything you read or hear because the economists don’t know a debit from a credit.
Economists are fair game for plenty of criticisms, but their lack of bookkeeping acumen is not one of them. Managerial accounting has nothing to do with economics.
Rate Hikes. BULL SHIT, All just talk. Going to lower in June, July latest. Jerry has had the tap on the shoulder. Joe need HELP, BIG TIME. Therefore a rate cut NEXT month.
How would dropping rates help Biden?
This would only cause inflation to spike even higher driving prices of everything higher pre-election … and pissing people off even more
Exactly. I think rare hikes are closer than people think.
The rate cuts would not help the people Mish expects to decide the election. Rate cuts and rate hikes *take time* to work their way through the economy, and by the time they work down to the Main Street level, they’ll take the form of higher prices for stonks and for the everyday things people have to buy. But hey, I’m sure the supercore will stay low!
Is it painful being that dumb?
So far, there remains intense focus on the battleground swing states.
As much as I hate the flawed pseudo-science of polling, I have to ask the savvy folks posting here, “Is there any evidence yet that one or more of the safe “firewall” red or blue states may flip in November?”
Biden is the status quo of the coastal populations rule. Trump represents the Heartland and a middle finger to the establishment. On its surface. they are backwards. Trump should be a Kansas farmer, and Biden should be a military contractor. However, the Kansas farmer (my name for the Heartland) can not win the popular vote. However, the Founders foresaw this and created the electorial college. Otherwise, New York City would elect every President.
I hear ya. I just can’t fathom Americans voting again for the incompetent and insufferable marxists who brought us all this ruinous authoritarianism, a border invasion, forced mRNA injections, martial law, small business covid massacres, frightening genital mutilation human rights violations, battlefield debacles, runaway inflation, unaffordable necessities, a massive drug crisis epidemic, a phony insurrection-that-definitely-wasn’t-an-insurrection, and non-stop completely avoidable WWIII brinksmanship stupidity. The people operating this bumbling regime behind the scenes are truly vile and loathsome. WTF America?
We used to have a choice between tweedle dee and tweedle dum now all we have to choose from is tweedle dum and tweedle dummer.
Life is just a box of grievences…
YES.
Do not be surprised if DJT wins a Blue state by a larger margin that some of the swing/purple states.
Virginia, Oregon, New Hampshire… even New Jersey. Not saying DJT wins these states… but I am saying that the stale conventional thinking (RE: past data & bad assumptions) is wrong/expired in many Blue states.
I also believe post-Covid migration of people/families/businesses is wildly under-estimated & we have yet to see the real, quantifiable impact of the U-Haul phenomenon, which is four years old & stronger than ever.
Bad business and high inflation is called ” S T A G F L A T I O N “.
The Fed has an impossible task. It has to provide cover for its drunk on debt boss. Stable currency is its mandate but that has never happened. More debt as far as the eye can see. Brics trying to escape the whirlpool of a depreciating dollar. The Fed is trapped.
This.
Duh?
Landlords always raise rent on the cusp of recession. Car dealers inventory is rising.
Jeep and Ram at the back of the line. The Fed doesn’t have strong T-cells to protect car dealers in their new crumbling crystal palaces. Memory of 2008 isn’t good enough. The gov can’t protect car mfg from the growing cancer. Retailers are struggling. Red Lobster declared BK. The Fed might stimulate and raid bank accounts to stop the deflation. 12% rates ==> bs !
Red Lobster was gutted by raiders.
Private equity “smash and grabs” are a cancer on our economy.
Someone correct me if I’m wrong, but I believe that is how Mitt Romney, aka, “Pierre Delecto”, made his fortune.
I am far from Romney’s p.r. guy, but the only specific thing I know about him business-wise, is that his outfit was behind Staples, which brought the stationery stores into the 20th century.
“Private equity “smash and grabs” are a cancer on our economy.”
Sure. But they’re just metastases.
The primary tumor is invariably central banking.
Every single penny any of the middlebrows engaged in PE have ever gotten their hands on, has been handed to them; in return for nothing at all of value; by The Fed. Absent The Fed; not one single one of them would exist. And conversely: As long as there exists a Fed, these sort of parasitic growth by entirely arbitrarily privileged idiots will continue. Guaranteed. You can not have one without the other,
But the roach motel still paying good money so I stay….
GS saving account pays 5.5%. The roach motel is safer. I am not a buy & hold investor. I buy/sell several times a week. My positions are modest, well below yours. NVDA gap up to a new all time high in the AH. QQQ and SPY are testing today high in the AH. QQQ might rise to 504 or drop below 2021 high.
The rate should be 200% to more accurately reflect the real values and risks.
Those new home”owners” that dated the rate may have knocked it up with triplets.
Fed keeps targeting demand as that is all they can do with monetary policy.
Fed can not produce supply of hard goods or services (other then Government debt financed spending influences).
Much of Housing was refinanced at lower rates and owners can sit out this tightening cycle. Only thing being affected is if an owner needs relocate for some personal reason.
Unless unemployment really spikes there will be no duress in Housing sector. Unlike during GFC when it was a matter of overindulging in a Debt orgy.
There are always some who took on more then they can chew, but not at levels as in 2008.
Personal credit and Auto loans are vulnerable. That means a slump in consumption is probable/already underway but not so much in Housing. Have not reached the collapse point as of yet in employment that would drive a Housing shakeout.
Fed would act if unemployment rate started jumping hard. In the meantime all they can do is sit on their hands with current policy levels.
Fed is forced to follow the economy at this time cause of inflation. Which puts any real pivot entailing actively re-stimulating off at some distant point.
Perhaps commercial real estate will force Fed action, has not happened to date.
They continue to roll Bad banks into others.
I doubt it would take much financial distress to tip the average American household paying a mortgage into foreclosure. Debt levels remain off the charts. Existing nest eggs might already be going through drawdowns just so families can maintain. Many people live paycheck to paycheck and have no cushion if things turn downward economically.
Any outlook is possible. Certainly quite a fair amount of younger people are walking on the edge as you describe.
Mish continues to point out these younger Voters will be the ones determining outcome of election.
My Bet is that they have had enough economic instability and do not wish to always be one paycheck away from Ruin.
There does remain quite a few people with equity in Housing and these people can weather a Storm as they have been down this road before. It is not like signposts pointing towards an unhealthy end to what has been going on was not in evidence. So there are people who have been preparing for a difficult time, for quite a while.
Housing shortages are growing as Replacement housing and new Builds continue to fall behind the Populations Need for a roof over ones head.
This innate demand will continue to support housing market and sop up any forced liquidations that may occur.
It will come down to unemployment rate which appears to be headed higher as Consumption is slowing rapidly. People are making choice between shelter, food, staying warm in winter and leaving behind the cheap thrills economy that has existed. This view is supported by people now shopping at Walmart rather then the high end retailer they had become accustomed too.
Belt tightening is underway and the amount of economic distress that people are under will determine how many notches that Belt will get drawn in.
Another thought is that fair amount of real estate purchases are all cash deals. These are the strong hands who will not get shaken out by credit
restrictions but are buying to “Have and to Hold” for the long term.
I remember when the Fed’s spiel was called “jawboning.” The art of persuasion and sometimes misdirection. Now we all think that the economy and FED move on “data” which of course is revised, estimated, incomplete etc. So I’ll go out on a limb here and say that the FED is jawboning because markets are about to get very frothy again. All sorts of narratives not least the messianic fervor of AI. Under the hood, consumer is retracting, inflation is sticky and Goldilocks is a child’s story.
I was just about to mention jawbonong myself. How things have changed since Paul Volcker used to run things. Back then they operated in secret and the only clues the public got were either when the Fed minutes came out months later, or the rates changed with no forewarning at all.
Now monetary policy tool to artificially lift the stock market is ” Forward Guidance “. FG success story is getting fade. Lately deficit spending is getting larger to lift too. After that?
When Volcker slammed on the brakes, one outgrowth was that the Fed became more broadly visible and subject to political commentary in the 1980s and thereafter. Greider’s Secrets of the Temple put the Fed on a much broader radar screen. As a result, Greenspan faced pressure to be more forthcoming, but those who paid attention and learned the language could figure it out.
Both Mish and especially the more unhinged commenters have their claws out for the Fed to a degree that I do not and never will. I think both Volcker and Greenspan did a superb job, and followed the bond market as much as he led it. The Fed entered dangerous territory with the Panic of 2008 by buying long bonds and mortgage-backs, and again during covid.
I think they have a long ways to go on unwinding the balance sheet. They danced with the devil because the alternative was worse, but the resulting asset inflation is and will remain a significant issue for some decades. They seem to have gotten religion about 1970s style stagflation that did great damage, so I hope they keep up that battle. Once inflation gets embedded, it is a real bitch to get the genie back into the bottle.
The alternative wasn’t worse. That is the PROPAGANDA they sold the gullible. It was just a natural occurring economic cycle that was aborted before allowing it to naturally play out. They danced with the devil because they are cowards and gutless charlatans that pretend they are economic gods that “know better” and ONLY want to PUMP everything higher for themselves and their fellow asset owners.
END THE FED. Fukin criminals
Blah blah blah gold standard gold gold. I was on Dorothy’s side in the original book and lay, where she wore silver slippers. If you think the Fed is bad, just wait until we have another William McKinley, whose 1896 R convention speech was edited by John D. Rockefeller. ay no attention to that man behind the curtain! LOL
If only Hollywoodland didn’t opt for the showy red footware that came alive in Technicolor.
Incidentally, do you think the Fed is more independent than McKinley was? There were people scheming to bring it into existence for years before it came to be.
Yes, I think the Fed is more independent than McKinley was.
You’re mistaken.
“If you think the Fed is bad, just wait until we have another William McKinley, whose 1896 R convention speech was edited by John D. Rockefeller.”
And, exactly how much higher did McKinley raise people’s income taxes as a result of that? And how greatly did he debase their money, in order to hand the resulting loot to ScaryGuy Rockefeller?
Government will always be comprised of not just scum, but the very worst of all possible scum. “Good princes” only exists in children’s fairytales. In the real world, they’re all bad. No exceptions even possible.
Given that: The only relevant question is how to restrict how much (invariably bad) government can do. You don’t do that by affording them entirely unlimited access to theft-by-debasement. Just as you don’t do that by letting them arbitrarily spy on and confiscate people’s income.
McKinley was the scummiest of all possible candidates in 1895. Biden/Trump today. Difference being: McKinleys budgets were a mere fraction of Biden/Trump’s. His ability to issue “debt” with implicit Fed cover much less certain.
As a direct result: McKinleys government was smaller (compare federal spending then vs now ), and more limited. Hence better. Smaller and more limited bad, is always preferable to larger and less limited bad. There are exceptions. Outside of children’s fairytales.
re: “I think both Volcker and Greenspan did a superb job,”
Both should be executed for gross incompetence.
No significant rates cuts (even zero) till 2025. They have to pay off the old people with interest on their savings accounts to vote for Biden on November 7th. Once he is elected …
Old people have had their brains eaten by cable news they have no idea what’s in their best interest, and they don’t care. They’re not voting for Biden.
We shall see.
This!
And a bit more…
There are two versions of Boomers.
Those who went to college and became brainwashed anti establishment, anti government Frankfurt communists who became statist pro war socialists sucking up the SS and medical.
4 Biden
The other is the pro war red neck Evangelical cohort. Brainwashed by southern Baptist’s and evangelicals they join the military and vote ideologically because they literally need to be told what to think.
4 Trump
Both had their brains rearchitected by TV into download mode only. After 60 years of watching screen based social programming illusions / they can no longer reconnoiter reality.
They sit in little groups and talk about money and complain about those who’s money their stealing to fund their lives and illusions of reality.
No one likes them besides themselves.
You left out the group that joined the military then went to college and turned into Libertarians.
Boomer libertarians might be the smallest demographic in american history.
I see plenty of propaganda on alternative media sites/sources as well. It’s not just a problem with legacy media it’s a problem with all media.
It’s not “Media” which is the problem. Freedom of Speech; all speech; no matter what; is good.
The problem is people believing in the nonsense. Just because some moron on TeeVee is introduced as an “expert” or whatever other nonsense (worst of all being, some rank moron enriched by nothing but Fed redistribution…..)
You also left out the group of Boomers who do not give a flying fuck for what people like you think.
Those are include in the “nobody likes them” group.
Stick with making excuses for Michael Cohen.
Old people remember the last SS adjustment was 3.2%, way under their personal inflation experience. Oddly the IRS raised the tax brackets 5.4%. Slight disconnect there?
the next SS increase will be announced in mid October. Will Brandon crank on a big one to buy some votes?
Hopefully but it won’t buy mine
Old people don’t like mass immigration.
Not sure who they think is going to empty their bedpan when they end up in the old folks home, but I agree, they don’t like it.
My 24 years younger wife God willing
US Treasury bonds should be paying 12%. That’s why the Fed is the only buyer. China is selling.
Bravo KGB. Nice to see somebody gets it
Someone has to come up with all this money in interest you are giving away. You do understand there is no big pot of money just waiting to be paid in interest, right?
That’s why the Fed is the only buyer.
Bullshit. The Fed has been reducing its holdings of Treasurys.
Audit would show that. The Fed refuses.
Two sets of books so an audit wouldn’t matter
Not according to Mannarino they haven’t
Greg M. is a serious guy but he doesn’t see everything, esp. @ the Fed.
For example, he continues to lump Powell into the same pile w/ Bernanke, Yellen, etc.
Powell is a different species & has consistently contradicted the White House, the Treasury & his predecessors. Analysts like Greg continue to expect Powell to do “typical MMT things”. In reality, Powell’s Fed tenure has been (and continues to be) marked by moves/policy that are 180degrees from “typical MMT” expectations.
Gravity with Germany and Japan pulls them together.
Exactamundo
It’s amazing what time does to economic prophecy.
In 2022, I fully agreed with Mish that rates could not reasonably go north of 3% when he stated:
“In today’s clown act, five FOMC participants actually believe that in 2024 the Fed will hike all the way to 2.75% to 3.25%.
Such predictions are amazing in light of what they would do to interest on national debt.
I am unconvinced the Fed gets in any hikes in 2022 and certainly not 6 by the end of 2023.”
And yet, here we are at 5.25% and it’s likely not enough.
What will implode first? The consumer due to inflation or the debt?
With federal debt resetting, and commercial debt starting to reset in March of this year, there is no doubt in my mind that something is going to implode soon. Danielle DeMartino Booth’s narrative on a recession starting at the end of last year is extremely well done in my opjnion and all the data she’s compiled pretty clearly shows that we are in a recession now.
I don’t think federal funds rates will go higher.
FED apologist Dimartino Booth and her palsy sidekick Stimpy have been calling for “carmageddon” with massive record Repos, AirBnBust and housing crash, bank and shadow lending crash and stock market crash since summer 2022.
Charlatans
But don’t worry, they just keep moving it out to “next quarter” and now I think it’s “after the election”
Dangerous to follow either of them
Well, there’s much higher repos, AirBnB has definitely busted (looked at that data lately?) and commercial housing is absolutely tanking.
She’s not called for a housing crash in anything other than commercial, and has been quite clear that March of 2024 was when commercial loans were resetting.
You are aware that it takes well over 90 days for loans to fully default, right? It hasn’t even been 90 days from when commercial loans started to reset. It’s coming this summer and will increase as more and more reset.
Commercial loans are like 2008 all over again, for those banks exposed to them….and small banks will implode, starting with those most exposed to them. The big banks are mostly ok and have sufficient reserves to cover. Small banks do not.
So, so far she’s been correct on everything I’ve actually heard her say.
If you consider summer 2022 to be close enough to March 2024 or “after the election” or whenever she has pushed it all out to lately, then I guess you are indeed correct
I try to be fair. So I will admit she was correct on a few banks and a handful of commercial high rises….. but only 12-18 months late
Most bears call recessions way too early.
Even Mish, whom I respect.
The digital cartel economy ie. Booking And Air BNB only works when supported by fake economic prosperity – funded by zero interest air bucks,
It’s all going to collapse – digital ads are vapor wear. The internet is dead. When is the last time you got an ad relevant to your life? Serving internet ads is a giant scam.
Dynamic pricing discourages engagement – price maxing is abusive. It’s going away.
They only work in fake economies.
The Ai created internet sans humans will be all that remains / skyscrapers filled with internet making people not so much.
A huge washout is inevitable and pricing discovery processes will manifest.
Capitalism will inevitably return as market competition (not cartel competition) returns to fights for shrinking slices of the pie.
Remember the Motel 6 ads.
“Always $20.00?”
It’s gonna be like that.
Competitive Rat Colony Economic Model psychology is doomed.
“The internet is dead. When is the last time you got an ad relevant to your life?”
In what alternaverse are ads some measure of the internet’s viability?
Makes about as much sense as claiming the patient is dead, just becasue his cancer is going into remission.
A global, highly redundant packet switched network, is a very useful thing. It won’t go away anytime soon.
I does badly need more universally and easily available “unbreakable” encrypted protocols layered on top of it now, though. For communication, as well as for making payments. As well as a wider, much more distributed and un-“policeable” set of underlying carriers.
Reliably indoctrinated retards dumb enough to fall for anything being reliably indoctrinated retards dumb enough to fall for anything: The totalitarians have clawed back lots of ground by scaring the dumbeffs into submission with childish and silly nonsense of the “fake news” and “terrorist” kind. Such that now, the underlying infrastructure needs to be upgraded, for the internet to continue remaining of much use for anything other than pure regime propaganda and apologia.
A major boon is, as always, diminishing returns. The protocols accounting for what is still 95% of the ‘nets utility; were largely in place by the 90s. Meaning, you can clandestinely run almost all “important” internet communication under cover of a million-to-one pile of mindless who-cares.
Almost exclusively text based protocols, over very high latency channels, got us to the US Constitution, nukes and a moonlanding. No 8K Youtube realtime streams required. The latter may, in fact, well be part of why we can no longer moonland… And no longer comprehend the Constitution….
Dense text protocols, over latency tolerant asynchronous channels, can be made almost arbitrarily hard to intercept and decrypt. Heck,even detect. And can include both communication in general, and arbitrary sized crypto transfers. All with what is today VERY cheap and simple hardware.
Ditto clandestine physical carriers. They’re only nonviable in the context of the sheer volume of fluff comprising most of today’s “internet.” For carrying async text communications, as well as crypto directions made for resilience-first, even a cellphone camera decoding smoke signals could be very useful. HIghly directional, and/or bursty transmitters, and mesh protocols, make it hard for even the most heavy handed totalitarians to suppress communication.
Check out dailyjobcuts.com. You’ll see the layoffs, businesses closing and economy headlines show things are getting worse. This website is NOT an opinion website. Each story takes you to the source of the story. (i.e. Fox News, Washington Post or directly from the company)
No historical context there.
She is not a fed apologist and wrote the book FED UP. I do believe that there may be an undertow of declining employment and a recession percolating but the SHTF hasn’t happened yet. I suspect it will, slowly at first then suddenly. However, inflation even with the manipulated stats the politburo publishes will persist. How can it not? Excessive unprecedented govt deficits, reshoring, tariffs, and wage pressure along with soaring commoditiy prices. It seems more like a stagflation is coming and the fed is painted into a corner.
Might be they’re trying to pad asset deflation with interest payments that are created out of thin air.