Fed Funds with 2yr, 10yr and 30yr TreasuriesChart recessions on a graph of Fed Funds with several Treasury issuances and charts of JPY, EUR, Gold DXY etc.
Enjoy.
Economy
$USPCEPIMC -U.S Price Index (January/2025)ECONOMICS:USPCEPIMC 0.3%
(January/2025)
source: U.S. Bureau of Economic Analysis
- The US Personal Consumption Expenditures (PCE) price index increased by 0.3% month-over-month in January 2025, the same pace as in December, and in line with expectations.
Prices for goods increased 0.5%, following a 0.1% rise in December and prices for services rose at a slower 0.2%, after a 0.4% gain in the previous month.
Meanwhile, the core PCE index, which excludes volatile food and energy prices, rose 0.3%, slightly above the 0.2% gain recorded in the previous month, and also matching forecasts.
Food prices went up 0.3%, higher than 0.2% in December while cost of energy eased (1.3% vs 2.4%). On a year-over-year basis, headline PCE inflation eased to 2.5% from 2.6%, marking its first slowdown in four months. Similarly, core PCE inflation declined to 2.6%, its lowest level in seven months, from an upwardly revised 2.9%.
$USGDPQQ -United States GDP (Q4/2024)ECONOMICS:USGDPQQ 2.3%
Q4/2024
source: U.S. Bureau of Economic Analysis
- The US economy expanded an annualized 2.3% in Q4 2024, the slowest growth in three quarters, down from 3.1% in Q3 and in line with the advance estimate.
Personal consumption remained the main driver of growth, increasing 4.2%, the most since Q1 2023, in line with the advance estimate.
Spending rose for both goods (6.1%) and services (3.3%).
Also, exports fell slightly less (-0.5% vs -0.8%) and imports declined slightly more than initially anticipated (-1.2% vs -0.8%), leaving the contribution from net trade positive at 0.12 pp.
Government expenditure also rose more (2.9% vs 2.5%).
Private inventories cut 0.81 pp from the growth, less than 0.93 pp.
On the other hand, fixed investment contracted more (-1.4% vs -0.6%), due to equipment (-9% vs -7.8%) and as investment in intellectual property products failed to rise (0% vs 2.6%).
Residential investment however, rose more than initially anticipated (5.4% vs 5.3%).
Considering full 2024, the economy advanced 2.8%.
The Dutch Housing Market is About to Collapse: The Perfect StormThe Dutch housing market is on the verge of a historic crash. The extreme rise in property prices over the past decades now seems unsustainable, and the first cracks in the foundation are already visible. Technical analysis indicates that a correction of at least 25% in house prices is a realistic scenario, and the underlying economic and social problems only reinforce this outlook.
Technical Indicators Confirm the Decline
An analysis of the Dutch House Price Index reveals a classic Head and Shoulders pattern, a strong signal indicating a downward trend. A break below the neckline could trigger a free fall. Furthermore, the Relative Strength Index (RSI) is showing a clear bearish divergence: while prices were still rising, the RSI had already started to decline, signaling weakening momentum. This indicates that demand is drying up and the market is ripe for a major correction.
A Country Made Unlivable
But this looming crash is not just a technical story; the Netherlands has gradually become an increasingly unattractive place to live. Multiple crises are reinforcing each other, accelerating the inevitable turning point.
1. Mass Immigration and Overpopulation
The Netherlands has changed dramatically due to uncontrolled mass immigration, mainly from non-Western countries. This has led to explosive population growth and immense pressure on the housing market. There simply is not enough space for everyone, while the government offers no solutions. Social housing is increasingly allocated to newcomers, leaving native Dutch citizens waiting for years. This creates not only social tensions but also an economic imbalance that is unsustainable.
2. Climate Goals and Unaffordable Sustainability Costs
The Dutch government has shackled itself to unrealistic climate goals, dictated by the EU and climate lobbyists. Homeowners are forced to invest tens of thousands of euros in insulation, heat pumps, and solar panels, often without ever seeing a return on investment. The mandatory energy label requirements make houses harder to sell and lower their value. As a result, house prices will continue to decline.
3. Exploding Energy Prices
Energy prices in the Netherlands have skyrocketed, partly due to climate policies and partly due to international tensions. While households are already struggling with skyrocketing mortgage costs, they are now also facing unaffordable energy bills. This makes it simply too expensive to own a home, reducing demand and putting downward pressure on house prices.
4. Soaring Inflation
The Dutch economy is being hit by historic inflation. Years of money printing, tax hikes, and rising living costs mean that fewer and fewer people can afford to buy a home. Mortgage rates are rising, making borrowing more expensive and further reducing purchasing power. This creates a perfect storm, where property prices can only go in one direction: down.
5. The LHBTIQ Ideology and Social Disintegration
To make matters worse, the Netherlands has increasingly succumbed to forced ideological brainwashing. The focus is no longer on prosperity, stability, and sound economic policy, but on gender quotas, inclusion policies, and the woke agenda. Companies and governments are wasting billions on programs that contribute nothing to the economy, while the real concerns of citizens – affordable housing and financial stability – are completely ignored.
The Great Correction is Coming
Everything indicates that the Dutch housing market has reached an irreversible turning point. House prices have peaked, and a correction is inevitable. The predicted 25% decline is not a pessimistic doomsday scenario but a realistic projection based on both technical and fundamental analysis.
Homeowners who still believe their property is a safe investment should seriously reconsider. The market is about to enter a free fall, and those who fail to act in time risk seeing their property value evaporate within a few years. This is not just a temporary dip – this is the beginning of the collapse of the Dutch housing market.
UK HOUSE PRICES: RELENTLESS UPTRENDIn January 2025, the latest figures reveal that UK house prices have risen by 0.7%, pushing the average price to a staggering £299,238, a new all-time high. For the mainstream media, the narrative of an impending house price crash has been a constant refrain over the past two years, fueled by the belief that prolonged high interest rates would spell disaster for the housing market.
Indeed, these elevated interest rates have significantly hindered the natural upward trajectory of house prices, which typically rise in response to inflation, a growing population, and a persistent shortage of new housing construction.
The current stagnation in UK house prices resembles a pressure cooker, building up energy that is bound to release in a dramatic surge. The government’s ongoing strategy of printing money to appease voters will inevitably flow into asset prices, leading to inflation in these markets, much like the consumer price inflation we’ve already witnessed.
The government finds itself in a bind, compelled to continue this money printing to meet the electorate's demands for free money and to manage an ever-growing debt burden. As the debt increases, so does the need for borrowing to service it. This cycle makes it increasingly challenging for the UK to lower long-term borrowing rates, especially compared to the US, which still holds sway over the global financial landscape.
UK house prices are gradually regaining momentum following the fallout from the Liz Truss debacle, a situation she seems to remain blissfully unaware of, despite the havoc her brief six-week tenure as Prime Minister wreaked on the British economy.
The financial landscape was nearly sent tumbling into chaos, prompting the Bank of England to step in with an unprecedented commitment to purchase UK Government Bonds. The economy is so fragile that the UK is now compelled to invest in US government bonds to shore up its financial system against the spectre of another crisis reminiscent of the Truss era under Labour. We were perilously close to a financial meltdown!
Currently, UK house prices are inching towards a potential increase of around 10% per year, indicating a modest upward trend rather than a frenzied housing boom, while also avoiding the catastrophic price drop that the media seems to obsess over.
Ultimately, average house prices in the UK are set to rise, irrespective of government actions or economic conditions. Therefore, those considering the purchase of a standalone house should act without hesitation, as flats and new builds present more complicated challenges—flats can become a logistical nightmare, and new developments might be situated in flood-prone areas, among other concerns.
Yield Curve Inversion Watch Chart - Fed Has To Cut!If you’re worried about a recession, you should be watching the Yield Curve Inverting.
Historically, an inversion signals a recession, but with a lag.
We can see this on the chart whenever the yield curve hits 0%
This shows the 2Y yield higher than the 10Y which is a signal that the market expects slow economic growth.
To counter-act the inversion, the Fed cuts the EFFR, although they are always late.
One would think that the Fed would learn from history, and get ahead of the curve this time around.
Only time will tell.
I’m cautiously optimistic as Treasury Secretary Bessent has stated that he has a weekly meeting with Fed Chair Powell.
BEAR 30Bearish divergence on MACD and RSI, made the THIRD lower low without any higher highs, looking at targets at the area 0.382-0.618
Timing the Markets with Consumer SentimentBusinesses and producers around the world always cheer when U.S. consumer sentiment is in the 80 to 100 zone, as U.S. consumers play a big part in the global economic ecosystem.
The United States remains the largest consumer market in the world, but since the pandemic, this index has not recovered above the 80 level.
Does it mean that, there is a risks economy to enter into a recession?
How can we use this index to time our investments and trades?
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$JPIRYY -Japan's Inflation Rate (CPI)ECONOMICS:JPIRYY 4%
(January/2025)
source: Ministry of Internal Affairs & Communications
- The annual inflation rate in Japan climbed to 4.0% in January 2025 from 3.6% in the prior month, marking the highest reading since January 2023.
Food prices rose at the steepest pace in 15 months (7.8% vs 6.4% in December), with fresh vegetables and fresh food contributing the most to the upturn.
Further, electricity prices (18.0% vs 18.7%) and gas cost (6.8% vs 7.8%) remained elevated with the absence of energy subsidies since May 2024.
Additional upward pressure also came from housing (0.8% vs 0.8%), clothing (2.8% vs 2.9%), transport (2.0% vs 1.1%), furniture and household items (3.4% vs 3.0%), healthcare (1.8% vs 1.7%), recreation (2.6% vs 4.0%), and miscellaneous items (1.4% vs 1.1%).
In contrast, prices continued to fall for communication (-0.3% vs -2.1%) and education (-1.1% vs -1.0%).
The core inflation rate rose to a 19-month high of 3.2%, up from 3.0% in December and topping consensus of 3.1%.
Monthly, the CPI increased by 0.5%, after December's 14-month top of 0.6% rise.
China's money supply explodes.China's revision of its M1 money supply calculation in January 2025, which now encompasses individual checking accounts and assets held in non-bank financial institutions, seeks to deliver a clearer understanding of liquidity within its economy. The reported surge from $67 trillion in December 2024 to $112 trillion in January 2025 has ignited discussions, with some viewing it as a strategy to obscure underlying economic issues, such as a potential deflationary debt spiral.
The People's Bank of China has declared a "moderately loose" monetary policy for 2025, aiming to boost the money supply and lower interest rates to foster economic growth, a move that may be connected to the M1 recalibration. This shift takes place against a backdrop of broader macroeconomic adjustments, including a 5% GDP growth target and initiatives to stabilize the real estate sector, as detailed in China's 14th Five-Year Plan for 2025.
US ISM is a leading indicator, chart shows ISM over laid RUTUS ISM is a leading indicator, chart shows ISM over laid RUT aka IWM, we are almost there! hang in there! send it all!!
2/18/25 - general mkt observationsi'd rather be sippin' pina coladas on the balcony at this stage than continue at the beach party with clear skies darkening. think i've just been there, done that enough to not want to play the last minute FAFO game as much as one can possibly avoid it.
so when i look out over the next 12 months... yup... let me stop right there... i don't think we can do that and i get the sense that everyone is doing just this. do i think we'll end the year higher on the index vs. where we stand today? yes. but do i think we just keep chugging along in the clown car in the same fashion as last year. no.
there are a lot of things that changed in the last 3 months. take for instance, how volatile the tape has become (once again) on trump's shower or toilet tweets. less taco bell, more pepto pls. but the reality is, we're just trading the tape we're presented to. any emotional reaction you have to any of it is a disadvantage to your pnl and a benefit to the zero sum other guy *well* computer. DOGE matters. dollar dominance and signaling matters. rates matter. tariffs matter. china matters. all of a sudden, the soup might include a bat. nah. that's for a fairy tale.
take a look at this chart.
i've plotted ST rates vs. S&P earnings yield and flipped on some haikin ashi action for the candles to show trends as more obvious. while we could argue about infinite topics in the >12 month context for each of these... simply put... ST rates look... competitive. even in the fake video game we all play, we get to choose different doors, weapons, opinions to follow. opportunity cost matters.
and so when i see the rolling over of this trend PLUS dominance of market cap weighted S&P vs. equal weight S&P (SPXEW/SPY)... this also tells me there's an embedded premium in these "will survive better than the others" boats. Bitcoin dominance (BTC.d in trading view) shows you the same thing. Everyone has been chitcoinin' but realizes now the zero-sum game of 99% of these things and the conclusion is... "settle into USDT and BTC". ultimately, that purple line (back to the trad mkts) indicates we might be reaching a point where growth is unclear, the path is unclear... and therefore... any relevant catalyst (like a headline about China-Taiwan... EVEN IF IT WON'T HAPPEN) could throw these markets off 5-10% easily. maybe that's all we get. maybe there's something else. right now we don't have that catalyst.
it's getting a bit spooky out here. we will keep playing our earnings game. liking what we like
BTC
,
NXT
,
UBER
, tsm... incubating a few others like
EVVTY
,
BLDE
, mu. i can't HELP but to keep my cash balance awkwardly high.
i don't mind jumping back in the pool. but my swimsuit is dry. the pina colada is chilly. and the whispy air coming in off the rocky ocean sends a feel-good shiver up my spine.
something's off, but in a good way. opportunity is coming. be vigilant. risk manage. know what you own. know what you want to own if/when/for how much.
have a good week.
V
Global Liquidity: A Turning PointLooking at the state of global liquidity, I believe we're in a solid position for some longer trades. The chart reflects a potential inflection point, suggesting that liquidity could increase over the next six months. This aligns well with my base case that we may see a gradual rise in liquidity, supported by macroeconomic tailwinds.
From a strategy perspective, this appears to be a prime opportunity for longer-term spot positions in miners, Bitcoin, and metals. These assets are historically well-positioned to benefit from rising liquidity conditions, and current levels offer an attractive entry point for patient investors.
While short-term volatility is always a possibility, the broader trend signals that this could be a pivotal moment for accumulation in these sectors. Patience and conviction will be key in riding this next wave.
To people (Realtors) Is there a home price correction?My case in point is this chart -- that there will be a much bigger home price correction this time around.
I do not want to even try and explain this chart.
U.S. Michigan 5 Year Inflation Expectations ComparisonThe U.S. Michigan 5 Year Inflation Expectation Comparison in the image attached shows the difference of the past 3 presidential administrations. I'm not trying to make this a political issue, but merely just looking at a comparison of what the masses of people have expected the future inflation rates to be in the past in order to have an idea of what to expect in the future.
When looking at this comparison, it shows the difference between economic policies (different administrations) and their effects on inflation expectations. Granted, with some policy implementations having a lag effect, there is likely some overlap between administrations and their effect on the inflation expectations. The dashed orange lines show the limits of the majority of data points that fall within those dashed lines. Anything that plots outside the dashed orange lines are outliers / not normal (for the last 30+ years).
COVID obviously had an outsized impact on inflation expectations since the U.S. government printed massive amounts of new money (Quantitative Easing (QE) by the Federal Reserve) to offset the closing of the economy / lockdowns due to COVID. That is marked on the chart to show approximately when that would have started. Thankfully, when COVID hit, we were at historically the lowest inflation expectations in U.S. history (as far back as the data goes on this chart).
With our current administration trying to cut costs of the federal government and trying to increase external sources of tax revenue to offset decreases to internal tax revenue sources, I suspect that will decrease the federal spending (net effect). A large portion of our inflation in the U.S. economy comes from government spending and printing of new money (QE). Granted the Federal Reserve has been in a Quantitative Tightening (QT) mode lately to help cool recent elevated inflation. However, I bet the Fed will be going to a net zero (not QT or QE) stance soon before they begin QE again in the future.
This will, hopefully in the short term, help inflation expectations come down, but tariffs will pressure inflation to increase if tariffs aren't offset enough by the administration lowering the taxes on U.S. citizens and businesses to have a net zero effect (which is possible). If the Federal Reserve starts QE sooner than later (highly unlikely unless our economy goes into a recession), then that will certainly put a lot of pressure on inflation to go up. This is a mistake the Fed has done before in the past back in the 1970's / 1980's until past Fed Chairman Paul Volcker raised rates to the highest they've ever been to break the insane inflation rates back then. Time will tell if history rhymes again or not. I certainly hope inflation is tamed and not allowed to go crazy again. Please feel free to leave a comment / your thoughts below. I welcome all feedback on anywhere my analysis may have been wrong. Good luck trading / investing out there.
M2 Peaking as Reverse Repo Drains to ZeroThe reverse repo balance at the Fed represents trapped liquidity. When this balance comes down it means liquidity is released into the economy and markets. The M2 level lags the change in reverse repo by about 300 days. Because reverse repo changes have been steady for some time, it is possible to draw a trajectory for reverse repo going to zero, and then M2 peaking out. This would coincide with a potential topping process for SPX as shown in the lower pane of the chart.
My CPI/ Inflation PredictionECONOMICS:USCIR NASDAQ:QQQ AMEX:SPY AMEX:IWM
We are just 15 minutes away from some very important inflation data coming out.
Here is my prediction: 3.1 YoY CPI or Lower
- Double top to drop continues
- Had a small lower high form and deflect off the 9ema
- Curling over and pointed down again
- Bearish WCB is still thriving
- The trend is your friend and the trend says we are going to continue to fall lower
Not financial advice
All Employees to Population Flashing CAUTION!As I have been saying in chat. It is hard to increase revenues, profits, and EPS without more workers producing. We have seen that reality play out in the data. Deporting prime-age labor and imposing taxes on ourselves is certainly not going to help. There is only so much output an economy is capable of. Giving tax cuts to the rich certainly won't change how much output an economy can generate. Reciprocating tariffs certainly won't help exporters grow profit or create jobs.
Caution is in order!
$USIRYY -U.S CPI (January/2025)ECONOMICS:USIRYY 2.9%
(January/2025)
source: U.S. Bureau of Labor Statistics
- The annual inflation rate in the US likely held steady at 2.9% in January 2025, matching December’s figure, which was the highest since July.
On a monthly basis, the CPI is expected to have risen by 0.3%, slowing from 0.4% in December, with food and energy prices continuing to increase, particularly natural gas.
Meanwhile, annual core inflation, which excludes volatile components such as food and energy, is anticipated to decline for a second consecutive month to 3.1%, marking the lowest level since April 2021.
In contrast, monthly core inflation is projected to edge up to 0.3% from 0.2% in December, driven primarily by an increase in new and used car prices.
Fed Net liquidityFed Bal Sheet - RRP - TGA. This indicator tracks Fed Net liquidity which should be a good proxy for where markets are going
US Debt and US Money SupplyThis chart shows the exponential increase in US Debt and US Money supply over the past few decades.
The Federal Deficit/SurplusThis chart shows the yearly US Federal Government deficit over the past few decades.
$CNIRYY -China Inflation Rate Hits 5-Month PeakECONOMICS:CNIRYY 0.5%
(January/2025)
source: National Bureau of Statistics of China
- China’s annual inflation rate surged to 0.5% in January 2025 from 0.1% in the prior month, above consensus of 0.4%.
This was the highest figure since August 2024, driven by seasonal effects from the Lunar New Year.
Meantime, producer prices fell by 2.3% yoy, keeping the same pace as in December while declining for the 28th month.
