The problem with listening to perma-bears is that they miss important things.
For example, McDonalds had 13 Q of record growth 30% !
How can you say economy was bad in 2024! It’s Complete Stupidity!
However, as I always say it’s all about timing!
Hence also the 2 YEAR RULE is important in order to live in this world.
Plus Minsky instability means things fall apart quickly in 18 months…
NOW FINALLY 2025 we have the first year of negative growth..
The YoY comparison is useful. Normally it drops every year. And in 2007, it accelerated upwards.
But now it continues up at 10% and the unemployment rate is now more reasonable at 4.2%…
The economy was too strong in 2023 when the rate was 3.5%.
Last 6 months…
Always mentioned are sub-prime loans for dramatic effect.
However, what’s important are the prime loans…
Last October it passed above 2% for 120days past due…
Level 1 (employees) and 2-3 are like birds. They’re always looking for small stuff and
they miss the big stuff.
THEY SQUANDER THEIR MENTAL CAPITAL WATCHING ALL THE TIME!
The BEAR or level 4 only wakes up when there is honey…He is refreshed and ready to go in a big way.
When does the bear wake up?
When the market hiccups!
The years 2023-2024 had no real hiccups only -10% over 3 months.
BUT NOW the bear awakens.
Between Feb and April …-17% and 6 weeks…VIX also rising.
THE REASONS ARE IRRELEVANT. Could be growth…overpriced/overvalued assets or the big T.
Only birds talk about ‘tawk’…
Great video of Bordenaro….
In 2021, rumors of inflation abounded and in 2022 the Fed went crazy raising rates.
Similar..we now have rumors of recession and then 2026 follows with Fed panicking again.
I think of 2026 as 2022 in reverse…
Since stocks have been rallying from last July-Feb 2025, notice that claims have been flat. Unemployment rate (UR) follows.
Now that the stocks are in transition with market down -3% (by 3rd wk Dec) this year as opposed to +24% last year, and the recent hiccup Mar-Apr…claims start to rise again.
Even 2023 rise came from stocks -20% in 2022…
Initial Unemployment Claims also rising again…
Stocks continue rally to mid-July now…anticipating the cut….up on the rumor down on the news.
Spy will be 593 by 3rd week of May OB then small $20 pullback by end of month.
It will be a little bit above 600-605 by mid-Jul but not a new high.
DHI breaks out as predicted…
Also 2y Treasury got ahead of itself…now moving back to 12 week moving average…
by mid-Jun can return to 3.58…
Since last year…
IT’S ALL ABOUT GROWTH NOW…NO MORE CPI.
FOCUS IS ON DROPS.
From April 29….
Proof of weakness….TECK stock…40 wkma X 100 wkma by next week…
AND 100 wkma super-cycle slope points down since March…
The Fed does not look ahead. It always looks back fighting ‘inflation’ now instead of worrying about next year.
But bonds have been quietly moving up since mid-March as growth has been dying. Short term inflation will have less and less effect on bonds moving forward.
Feb inflation in Europe was 1% but the bonds moved up anyway.
Bonds are still waiting for the first cut before ‘breaking out’. And eurodollar university says which I agree with
the Fed always does a flip-flop.
I have looked at consumer sentiment over the years and its basically useless.
BUT job sentiment appears to be the significant part of michigan sentiment before a recession…
Note how high this is BEFORE THE RECESSION!
The kid overstates everything BUT this job sentiment IS SIGNIFICANT.
JOB layoffs at government will account for less than 0.15% of payrolls
BUT this sentiment indicates the majority are now worried not just Federal workers.
Credit Flow Investor 