May
25
“Inflation is always and everywhere a monetary phenomenon”– Nobel Laureate Milton Friedman in speech given in India in 1963 We have discussed before many times that money supply growth drives the direction of inflation. When money supply growth is soaring (M2 in chart below), inflation soon follows. Too much currency...
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May
23
There are three consensus views I see right now in the market: US recession sometime 2H23 US office real estate is a mess and will experience permanent loss/impairment The 4200 level on the SP500 is a HUGE technical level to watch here Sean has forgotten more about market technicals than...
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May
18
With over 90% of companies in the S&P 500 index having already reported results, Q1 2023 earnings season is drawing to a close. Even though this was the second consecutive quarter in which earnings declined on a year-over-year basis, results have come in much better than initially expected. As of...
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May
09
Everything is politics, including politics itself, investing, and the role of the Fed and its chair. Not really a surprise that after getting way behind inflation in late 2021/most of 2022 and embarking on the fastest/most aggressive rate hiking cycle ever, confidence in Fed chair Powell nearing historic lows. Heavy...
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May
04
As expected, the Fed hiked +25bps yesterday and the post-hike Powell press conference was the usual bad TV it always seems to become. Inflation isn’t the problem it was six months ago. The problem is that under the Powell watch, three major financial institutions have experienced classic bank runs in...
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May
02
Tomorrow brings the latest Federal Reserve decision, with another quarter-point hike viewed as a slam dunk – current market pricing shows a 93% probability of that outcome. That would bring the Fed Funds rate up to a range of 5-5.25%, which is what their “dot plot” projection from the March...
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Apr
28
The Fed has been aggressively hiking rates since March 2022, the yield curve has been inverted since last fall, and overall financial conditions have tightened dramatically. We think we’re headed towards recession; the market thinks we’re heading towards recession, everyone thinks we’re headed towards recession. The question isn’t “if, it’s...
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Apr
26
“Money makes the world go ‘round - Still don’t nothing move but the money” – Cabaret the Musical (1990s revival) Money – and the growth of money supply – influences everything in the capital markets and the economy. Booms, busts, recessions, recoveries. Fear and greed alike. All of this links...
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Apr
25
More and more evidence is now pointing to the much-anticipated recession beginning to materialize over the next few months. Last Thursday, the Philadelphia Fed released its Philly Fed Manufacturing Index, a survey which measures changes in manufacturing activity covering the Pennsylvania, New Jersey, and Delaware region. While this is only...
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Apr
19
We hear this question a lot; and most of the time it is a foregone conclusion that we will revisit the 2022 stock market lows. War, recession, the Fed, regional banks, commercial real estate… there are so many pessimistic investors out there waiting for large declines to happen. So, a...
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