A Minsky Moment is Coming
Updated
The economy has been going into the toilet for a while now. All the NBER coincident indicators are trending down to 0% growth. Some leading macro indicators have actually flashed negative. Housing volume is crushed, the treasury has started pricing in recessionary conditions while the credit market has been twiddling their thumbs expecting a soft landing (even bitcoin foolishly climbed to 25k on distorted hope, and some think that's going to happen again because of Elliot Waves and Fibonacci, the prophets of TradingView). But that is now changing, with the biggest drop still to come, and lessons will be taught all around.
We will probably have mass layoffs in Q4, based on the condition of deteriorating employment. The non-farm payroll survey, which does not survey households, is still downtrending in spite of double or even triple counting people holding two or three jobs as two or three employed. Household survey is dropping. People are starting to work less hours, which means there is trouble ahead for employment and the soft landing narrative.
We are still waiting for that turning point where the credit market and broad economy realizes a recession is unavoidable. And now, over the weekend, retail finally gets a headline it can work with: Bed Bath and Beyond CEO jumps to his death. I'm not going to short this index, its still too risky and I will keep my existing crypto shorts while rolling over everything else into USD and TLT; but I can see why one would short it. Things are rapidly coming to their crescendo, and the credit market will resume pricing in reality soon, if not on Tuesday.
2022: SPY woke up after labor day, wearing white, and chose violence.
Happy trading, fart knockers.
We will probably have mass layoffs in Q4, based on the condition of deteriorating employment. The non-farm payroll survey, which does not survey households, is still downtrending in spite of double or even triple counting people holding two or three jobs as two or three employed. Household survey is dropping. People are starting to work less hours, which means there is trouble ahead for employment and the soft landing narrative.
We are still waiting for that turning point where the credit market and broad economy realizes a recession is unavoidable. And now, over the weekend, retail finally gets a headline it can work with: Bed Bath and Beyond CEO jumps to his death. I'm not going to short this index, its still too risky and I will keep my existing crypto shorts while rolling over everything else into USD and TLT; but I can see why one would short it. Things are rapidly coming to their crescendo, and the credit market will resume pricing in reality soon, if not on Tuesday.
2022: SPY woke up after labor day, wearing white, and chose violence.
Happy trading, fart knockers.
Note
From Minsky moment to Zelensky moment...
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