AND monthly claims bad…

IT ALWAYS takes time for optimism to come off…since april it has been accelerating…

https://fred.stlouisfed.org/graph/?g=10m6s

YoY looks good compared to last year…

BUT of course, it won’t spread from there!

Only 1 year into downturn and new homes discounted by 30% Florida like Toronto condos…

AND yes I already knew that builders continue to build into the downturn

but less and less using up already purchased land at lower and lower prices

and YES better materials will be used as well.

ASSET PRICES lead the economy as I have been saying for 10-15 YEARS!

For example,

10 spend $50 or $5 each

60 spend $20 or $0.33 each

RELATIVE SPENDING of top 10% to bottom 60%

=5/0.333=15 times !!!

In 20 years, it will be 70% of spending and bottom 60% will be 12% or 35X.

AND PEOPLE CALL ME AN IDIOT WHEN I SAY FDR IS COMING!

I say in 20 years he’s coming (when money velocity hits zero). What does it mean?:

top tax rate 90%, capital gains rate 75%, banning of gold ownership, etc…

maybe even wealth tax like Europe…

From Ed Dowd below,

Risk off….trade of the year US Treasuries bonds.

1. Tariffs no big deal disinflationary
2. Budget no big deal…just extension of current taxes…my comment SPY is saying the same…sideways. +0.58% YTD
3. Real estate dropping A BIG DEAL….I call it NEGATIVE WEALTH EFFECT
4. Yields to drop
5. Recession coming Q4…I say warnings-bad guidance reported in Q4

Last week UTWO started the move…this week IEF.

Mar-May upward slope….

Quote from sidebar…

How Low Will Rents Go? | Canada Real Estate

Much lower than today. Landlords need to know that rents are FALLING in Southern Ontario, same in Vancouver although not as bad.

So many reasons: Bad Economy, Immigration Reversing, The End Of Airbnb, the Great GTA Pre-Con Condo Crash, Massively Increased numbers of new Purpose-Built Rental Towers coming on stream. Honestly the outlook for some Landlords is grim

I liked her back in 2007 and 2008 even 2009…some recent links…

She was the only one I would see at gold bug conventions as she was the only one there who liked US treasuries.

I believe it was the massive real estate bubble that drove immigration to Canada the last 20 years…

She talks a lot about housing being the key to recessions.

“Bear markets, it is said, are periods when assets are returned to their rightful owners–strong hands take back from weak. And so it goes, cycle after cycle. This time is not going to be different.”

From her blog Apr 25th, CRUNCH+SURGE-

my comment…CRUNCH wk2 APRIL THEN BUYING SURGE wk 4 APRIL:

Below is why they are now cutting immigration, refugees, and student work visas…

Already worse than 2008 !

AND NOW is she good in risk on? NFG… WAY OFF in 2022 !!!

Notice on May 1 the utwo moved FIRST then IEF followed.

A key concept is ‘negative wealth effect’.

The XHB downturn leads the economy and leads to ‘negative wealth effect’.

Here you go…OB at 594 on Monday and then began selloff. THIS is a sideways/mild bear market.

No more BULL. THE MARKET DETERMINES THE NEWS NOT THE OTHER WAY AROUND.

Tariffs were also big news in 2018 but did not matter. The ‘deals’ did not materialize and macro problems came to the fore and stocks went down anyway.

Downward pressure on bonds will start to come off with unemployment rate first week of June. Of course, you have 3 days down with bs payroll numbers when hedge funds sell.

However, it’s bought back and more the next week.

AND wall street doesn’t like Mr T budget. I guess the Mr. T magic has worn off.

Once again, it was predicted that 2nd term will be a disaster. Poll ratings are already below 50!

SPY +88 points +17.6%

IEF -2.9 or -2.9% off high so QUITE RESILIENT ! 1/6th…

Oil Rigs cracking…I guess the $65 per barrel break even price seems to have merit…

lowest level since Nov 2021…