Down goes the Dow

I've bought a teeny tiny position in TLT, the 20-year treasury ETF. Have to think we'll get a nice snapback rally in that thing. Maybe soon. Down 12% this year. And it may be a tiny insurance policy if there is some financial accident. And I get 5% to wait.

Bond yields keep screaming higher while the Fed thinks inflation continues to fall and is down to a mid-2 handle.

What's going on here? Why are interest rates spiking when inflation is falling? that's not supposed to happen.

People are apparently worried that the Fed will look at fast economic growth rather than inflation I suppose. And keep rates high. But that's just short term rates...weird stuff happening. Am very curious to see how this will resolve. Either inflation will resurge or rates will fall soon. Can't have both. Unless holders of treasuries capitulate and sell all they can.

newyorkfed.org

Multivariate Core Trend (MCT) Inflation

A measure of the trend, or “persistent,” component of personal consumption expenditures (PCE) price inflation.

Link:www.newyorkfed.org/research/policy/mct...

“The total return of 30yr Treasury bonds is now negative since quantitative easing was launched.

So much for the idea that valuations can be ignored because zero interest rates offer "no alternative" but to speculate in long-term assets.

Stocks are likely to learn the same lesson.”

—John Hussman

Good one agip, but you better hope for a weak job's report Friday, or

Image:i.imgflip.com/81glj8.jpg

Armadillo jump < Dead Cat Bounce

Hard to get a less accurate prediction than this one.

Predicted a serious recession for Q2/3 2023. Instead we're having a boom: 3-4% real GDP growth.

Carl Quintanilla
@carlquintanilla
“We have argued for some time that the economy would avoid recession this year. But that view now looks untenable, given our expectation of a sharp tightening
of credit .. we now expect the economy to shrink at about a 1 1/2% annualized rate” in Q2/Q3. - @PantheonMacro
#GDP

9:24 PM · Apr 2, 2023
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83.5K
Views

And a matching prediction of a recession that should have already been here. But isn't. That;s a lot of views. Dustbin, Rosenberg?

David Rosenberg
@EconguyRosie
The yield curve leads the econ cycle with a classic lag of just over a year. It inverted last summer, which means Q2 &/or Q3 have a bullseye on their foreheads. Our models peg GDP contraction next quarter & all these calls of “no landing” will be relegated to the dustbin.

7:35 AM · Feb 15, 2023
·
145.7K
Views

Just in case you wondered why the stock market has remained somewhat resilient with rising interest rates, from the Kobeissi Letter:

“JUST IN: The US added another $33 billion of debt in one day yesterday, bringing the 2-day total to $308 billion.

Since US debt crossed $33 trillion just 15 days ago, the US has added another ~$500 billion in debt.

That's an average of $1.4 billion per hour for the last 15 days straight.

If US debt borrowed over the last 2 weeks alone was split by every taxpayer, it would be $3,000/person.

Debt to GDP is back above 120% while we may see $34 trillion in total US debt within a month.

Now imagine what happens if a recession hits.”

Stunningly, $2 Trillion added to the deficit June 2-October 3.

failure of democracy to stop the bleeding.

although debt/gdp has been nosing over for a few years, and that's very important.

fred.stlouisfed.org

Federal Debt: Total Public Debt as Percent of Gross Domestic Product

Federal Debt: Total Public Debt as Percent of Gross Domestic Product

Link:fred.stlouisfed.org/series/GFDEGDQ188S

The good news is that I'm playing with house money now with my $6.03 in profit on the trade. Do I get free drinks with this?

Failure of institutions, that have become more about self-dealing than a function of democracy.

it's just that elected reps gain next to zero votes for restricting spending/increasing taxes, so they don't restrict spending or increase taxes.

But reps do get votes for boosting military spending and programs and cutting taxes. It's a bad incentive system. Voters should reward reps who say we have to get this under control...but voters don't do that.

Hence, failure of democracy.

Igy this one's for you.

A compilation of 'America collapsing like the Roman Empire' stories from decades and decades. Caution!

Personally I have no idea how we survived 1972-1980 and I was actually there.

You could apply that same standard to healthcare policy, really anything. Thus my point government has become a self-dealing institution. Certainly more about preservation of power than serving the people. Turds, both parties.

I guess our difference is that I divide blame among the parties, politicians and voters. A triad of bad choices.

Well, there is plenty of debauchery and collapse of Hadrians Wall to draw that analogy.

Liz Ann Sonders-

“Deficits might matter again (they always have, frankly) … @USCBO estimates interest costs of deficit could eat up >20% of tax revenue by 2032
@biancoresearch @USTreasury”

From Jim Bianco, perhaps this is the secret of Flagpole’s 32 out of 33 year beat of the Dow: