Inflation YoY vs Fed Fund Proxy in the 1940s ... Inflation YoY vs Fed Fund Proxy in the 1940s ... No need to lift rates do match inflation .... something to think about it
Economy
Rates Rise Building Permits Decline Recession FollowsHere's a chart of the relationship between building permits (which come out this week) interest rates, and recessions.
When rates rise permits drop and recession follows.
This week's building permit numbers could be are not likely to be good.
Inflation in the USWhen it comes to inflation in the US, some will say that it has become entrenched, others that it has come to a halt.
The FED has over stimulated the economy and is late in the process of raising interest rates. It may be some time before you see the effect of an interest rate hike e.g. the bankers are supposed to warn interest rate hike etc., but now the FED is impatient to get price stability. It can end with a ketchup effect.
When the FED raises interest rates, it will strengthen the USD and it will have an inflationary effect on other economies. After all, they are going to pay more in their currency for goods traded in USD.
The interest rate curve is inverted, but unlike previously it is attributed to the fact that the economy has been over stimulated (artificially low interest rate and QE = money printing) (1). Putting the money press in motion produces empirical inflation.
Although GDP has been negative for two quarters, it does not resemble a recession in American society, see for example unemployment, PMI and consumer confidence (2).
The S&P 500 index is back in a declining trend in the medium term and will remain so until proven otherwise. On the 5 year chart there is a support around 3400.
Now Q3 will get some attention and it can go up or down a bit. Q3 may well surprise positively (3), but after that macroeconomics will take over. Markets are volatile and trying to find a bottom. The peaks of the VIX are steadily declining (4). It indicates that we are getting closer to the bottom.
Geopolitically, Ukraine in particular, but also Taiwan, is important.
Russia is using energy supplies to Europe as a means of pressure in connection with its assault on Ukraine. Energy prices will be high and this will have an inflationary effect.
One should diversify and not depend on totalitarian systems such as Russia and China.
I found it relatively easy to get out and in of the stock market in the big V-shaped correction in February-March 2020. Since the stock market then peaked and began to fall, the trend has been insidious. If you sell out, do you come out at the bottom?
I have mostly chosen to sit still, but I want to buy a little when I think the price is low and preferably not sell anything unless there is a good reason. The stock market is coming back up.
That's how I see it and not a call for specific dispositions.
(1)
www.nordnet.no
(2)
da.tradingeconomics.com
(3)
www.nordnet.dk
(4)
Inflation is here to stay?Many believe that inflation is here to stay. IMO inflation has peaked, it just take some times for things to cool off and show on the CPI print...when deflation kicks in, it will be fast, according to past experiences. Another interesting metric not many are paying attention to is the China PPI vs US CPI, the chart is self explanatory. The latest divergence is giving a big hint on where US CPI is going...deflation will kick in? Or inflation will stay because of "decoupling"? I believe in deflation.
Junk Bonds as Indicator of Overall Market RiskThe decline in junk bonds is generally an indication of high market risk. In this type of enviornment, investors of junk bonds demand higher yields to compensate for additional risks.
As bond yields and prices are inversely correlated, higher yields cause junk bond prices to fall; a repeating pattern over the last two decades.
When markets face a significant crisis, junk bonds fell along with other risk assets.
VIX Volatility only beginningVIX is showing higher lows and has broken above the Brim Level of a Cup and Handle.
This is problematic for a trader as it means a lot more jumpiness is coming.
It's also broken out of its downtrend on both chart and the RSI.
With the inflation rate going up, interest rates soon to go up in November and with more money going to be printed in the economy - this isn't good for the markets in the medium term.
Time to risk less per trade, I'd imagine.
Inflation Canada well I am continuing these charts till we hit my stop loss and go down---
if you look at my indicators you will see inflation is at 2% in canada right now and will continue being 2 percent for a while---I dont think it will do a uturn for a while I think we are stabilized at this point for a while.
thanks for reading - if your policitians get this to the right people please inflation isnt real-- it takes a 5 or 10 million trade to make 160 trillion on here lol----
Inflation Americanheres my chart for the next few months or atleast till the end of 2022--- Im going to set it and forget it the fed its barking up the wrong tree inflation is at 6% till feburary or march of next year--- but hes a monkey chasen a banana i guess....
INFLATION FIGHT - Pattern changed?Core CPI in blue overlayed with FED FUNDS RATE.
In the 70s and 80s, FFR spikes (RED BOXES) used to fight Core Inflation (YELLOW BOXES)
RED BOXES > YELLOW BOXES to stop inflation historically.
RED BOX before YELLOW BOX
Pattern changed?
Spx500 BearishInvestors are less confident and are rapidly exiting the stock market.
Key price levels turn into resistance levels.
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London Has FallenIt doesn't take long to look through UKs statistics to find a dumpster fire.
United Kingdoms bankruptcies are reaching highs from 2008 showing an early indication of Insolvency Contagion.
More charts to come as the Fire Sale continues.
Check out my other 2022 Dumpster Fire Charts
Inflation not going to slow down for the US until 2028In the short term - like today!
8:30 EST 13 Oct 2022
If the CPI (measures inflation) comes out at above 8.2% this could lead to a market crash as the Fed would likely raise interest rates by another 100 bps on 2 November to curb inflation.
If the CPI comes out below 8.2 this could spark a market rally as they will believe inflation is starting to cool down.
In the long term. Price broke out of the W Formation and is showing major upside to come for Inflation.
This could go on until 2028... If this happens, there is a potential Depression that could kick in world wide.
This depression would then last for another 10 - 20 years (if they can get it under control).
We need a government and quantitative reset...
Sorry for the doom and gloom but it's not looking good technically.
ASSETS /INFLATION DEFLATION JUST STARTED Since 1971 ALL ASSETS have inflated based on the start of M2 and the start of money velocity . it is just starting down housing BUBBLE is about 5 x of 2007 as is the pension system . when it is over it will be a very DARK TIME and a NEW System . FIXED money . CASH AND T BILLS ARE THE ONLY SAFE HAVEN !! I HAVE WARNED OF MAJOR CIVIL ARREST and having a good 1 yr of dry goods something to protect you and you family . and move as far away from any city or state thats BLUE
InflationThe Golden FIB is at it again!
This time it did its magical powers on Inflation.
What can can Mr. FIB do next?
Will its power dominate the world?!?!?!
How do we get inflation down? probably when unemployment increas
When unemployment increases, inflation will go down. The aforementioned 10-year-old minus the 2-year-old has told us before when this could conceivably happen, a suggestion would be autumn 2023?
Signal is when this turns up above zero.
Los Angeles County housing price IndexMade for Veronica cus she cuts good haaaer ....
Watching the house price index in Los Angeles county in respect to Federal Interest rate and nationwide housing market correction.
liquidity number v2 from Arthur Hayeson bloomberg machine: FARBAST Index - (RRPQTOON Index * 1000) - CERBTGAN Index + NYRPVOA Index - FARWFOIA Index + FESLTOTL Index
units of those metrics have been updated
source tweet: twitter.com
Assets of major central banks vs BTCAssets of major central banks vs BTC
They are the market.
A trend reverse on the chart could signal an absolute bottom.
Smooth Recession Probabilities BreakoutWhere can I buy this "recession"? Looks ready to go parabolic to me.
Recession Probability Outcome heres my chart im going be posting and looking at over the next year
something that will be on everybodys mind come election and new year--
how to tackle inflation and recession--- probabilities.
I am neutral for which I dont have many indicators that will work with this i dont believe
so I will have to do some searching on google- for some examples of indicators and write my own with this--- on the second chart I post for this exchange.
Recession probabilities.
The base or starting line--for this project--will be adjusted and watched with due diligence.
We will adjust and continue working with this project as months progress into the future.
Fuel SeasonalityAs someone who works in industry with large consumption of diesel fuel, we are very concerned and interested in fuel.
This past few weeks while gasoline is dropping, diesel fuel is in a price similar to the beginning of Ukraine war. So when will prices go back to "normal"?
As you can see in the included image, relative price between gasoline and diesel is very consistent in the way it moves every year. With a very similar and consistent variance. Diesel remained abnormally high between August of 2008 to January of 2009, bottoming in May 2009. This is apparent in the seasonality chart I made. Because of the extreme prices gasoline reached during the summer, the problem for diesel will continue for the entire winter. A single event (Ukraine war) caused a price chaos that lasts a year. Who knows what extremities will occur if, god forbid, a scaled war begins.
PS. I have made statistics regarding DJI, kWh, NG1!, RB1!/USOIL, and RB2!-RB1!
Maths and statistics are beautiful. This is not trading advice, this is art.
Tread lightly, for this is hallowed ground. -Father Grigori
10yr and 5yr inflation expectations - breakeven10yr and 5yr inflation expectations - breakeven ... FED 2 % target rate ... means at 2 % they pause ...
