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In the deluded minds of the masses, surely soaring interest rates must be good news, in spite of the fact our once-great nation is $32 trillion in debt (actually vastly more, but…….) and consumers are already under the heel of oppressive monthly payments. We can see on the ultrashort fund against bonds (a proxy for rates) it’s up, up, and away…………
Hello, Slopers!
First I would like to thank you for your kind words, I was very happy to see you appreciate the previous content. Hopefully that will end up having a positive impact for some if not all of the community.
Now, after having seen that the FED is (most probably) at its most restrictive stance in decades (pressure index), not only on the interest rate front but also doing QT at a $90B per month pace making the case for the highest probability of a recession in a long time, three main questions are left:
(more…)To see Part One of this post, click here.
In fact it preceded 3 of the last 5 recessions 1982 1990 and 2007. Not a bad start considering that the 2020 recession was a very special one.
Now even if 1990 was a recession year it can be considered as a soft landing, things ended up really well at that time and there’s another period that you should take a look at: 1994 when Greenspan aggressively raised rates without causing a recession.
When you look at the chart the pressure index was raised well above the red line and for a relatively long period of time, why did we end up in a no-landing scenario?
(more…)Before proceeding, I’d like to remind you that this article is not written by a perma-bear. It is important to have credibility and indeed, NFTRH planned for a potential humdinger of a bear market rally back in Q4, 2022 based on the inputs of then extremely over-bearish sentiment, the bullish mid-term election cycle (which on average projects bullish for a year, post-election), a coming fade in inflation signals (with the attendant hopes for a softening Fed) being its primary elements. Here is one post discussing the rally in November, 2022.
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