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2008 and 2019 - Stock Market Crash: Similar Signs Now! S&P 5002008 and 2019 - Stock Market Crash: Similar Signs Now! -Reverse Repo and S&P 500: Inverse Correlation is Screaming. Here are 5 Highlights: 1:: Quantitative tightening has been underway since June 2022, and the Fed will have to make a Big Move- iin September 2024: 2:: The overnight reverse repo facility is now getting down to low levels, raising questions about whether another breakdown in financial market liquidity and stress in short-term funding markets could occur.: 3:: On January -2022, the chart shows that the REVERSE REPO started to increase and at the same time S&P 500 started to drop, showing an almost perfect inverse correlation.: 4:: What Happened in the 2008 G-F-C - Quantitative tightening, and in September of that Year? 5:: What was the: dash for cash, and what happened in the September 2019 Repo Crisis? Quantitative tightening (QT) has been underway since June 2022, with the Fed shrinking its balance sheet in order to bring reserves and liquidity in the financial system back down to more normal levels. The CME's FedWatch Tool forecasts that the federal funds rate will most likely end 2024 at 4.25% to 4.5%. If so, that's a full percentage point lower than current rates. However, there's substantial uncertainty around that estimate and a higher, or lower, degree of policy accommodation is possible; The overnight reverse repo facility is now getting down to low levels, raising questions about whether another breakdown in financial market liquidity and stress in short-term funding markets could occur. I believe that an unexpected rate spike, similar to September of 2019 is unlikely, considering the current liquidity conditions, but the chart I have created triggered a Warning Sign. As you can see, usually there is a clear Inverse Correlation with REVERSE REPO, and the US STOCK MARKET. On January -2022, the chart shows that the REVERSE REPO started to increase and at the same time SPX started to drop, showing an almost perfect inverse correlation. On May - 2023, the chart shows SPX, at the start of a Bull Market as REVERSE REPO is on a Downtrend. What I have noticed, is that when they are running beside each other, at some point they start to go in the opposite direction, and when they are far apart from each other, at some point they start to converge, going in the opposite direction, crossing at some times. Since they are really far from each other, the next inverse correlation move could be huge. So, the question is, the pattern will follow, and if it does how much will the stock market Crash when Reverse Repo starts to spike UP? For now, I do not see a breakout of the Downtrend for Reverso Repo, but we need to keep very close attention when that happens, to review our stop loss. Since I have never seen this analysis between the Reverse Repo and the US Stock Market, I had to publish it as soon as possible to warn as many people as I could, of what could happen, anytime from now. If you know anybody who has made this analysis, let me know in the comments below. What is the Reverse Repurchase Agreement? A reverse repurchase agreement (RRP), or reverse repo, involves the sale of securities with an agreement to repurchase them later at a higher price on a specified future date. It represents the seller's perspective in a repurchase agreement (RP), or repo. The difference between the initial sale price and the repurchase price, along with the timing of the transaction—often overnight—represents the interest paid by the seller to the buyer. In the U.S. repo market, more than $3 trillion in short-term funding is provided daily, with most transactions being overnight and collateralized by Treasuries. Repos are commonly used for short-term borrowing and lending. How Does a Reverse Repo Work? In a reverse repo, a party in need of cash reserves temporarily sells a business asset, equipment, or shares in another company, with an agreement to repurchase them later at a premium. The buyer of the assets in a repo agreement earns interest for providing liquidity to the seller, while the underlying collateral helps mitigate the risk of the transaction. Example of Reverse Repurchase Agreements Consider Bank ABC, which has excess cash reserves and wants to earn a return on them. Meanwhile, Bank XYZ faces a reserve shortfall and needs a temporary cash infusion. Bank XYZ may enter a reverse repo agreement with Bank ABC, selling securities to Bank ABC to hold overnight and agreeing to buy them back at a slightly higher price the next day. From Bank ABC’s perspective, this transaction is a repurchase agreement. How Does the Federal Reserve Use Reverse Repos? When the Federal Reserve engages in a reverse repo, it sells securities with an agreement to repurchase them later. In doing so, the Fed borrows money from the market, which can help absorb excess liquidity in the financial system. The Bottom Line A reverse repurchase agreement (RRP), or reverse repo, is the sale of assets with an agreement to repurchase them later at a higher price. Essentially, it functions as a short-term loan with the sold assets serving as collateral. What Happened to the Repo Market during QE of 2008, and What happened in September of that Year? During the 2008 financial crisis, the repo market faced severe liquidity stress as financial institutions struggled to obtain short-term funding. The repo market, where institutions borrow cash by selling securities with an agreement to repurchase them later, is a crucial source of liquidity for banks and financial firms. However, as the crisis unfolded, the value of the collateral—primarily mortgage-backed securities and other complex financial instruments—plummeted. This led to a sharp increase in haircuts (the discount applied to the collateral), causing lenders to demand more collateral for the same amount of cash. The resulting lack of confidence in counterparties and declining asset values led to a run on the repo market, where borrowers were unable to roll over their repos or obtain new funding. This liquidity crunch intensified the financial crisis, leading to the collapse of major institutions like Lehman Brothers and prompting the Federal Reserve and other central banks to intervene by injecting liquidity and expanding their roles in the repo market to stabilize the financial system. During the 2008 financial crisis, U.S. bank reserves became scarce in the period leading up to the implementation of Quantitative Easing (QE) by the Federal Reserve. So, what happened in September 2008? This scarcity of reserves was most pronounced in the fall of 2008, especially following the collapse of Lehman Brothers in September. At that time, the interbank lending market froze as banks became increasingly risk-averse and reluctant to lend to one another due to fears of counterparty default. This resulted in a severe liquidity crisis, making reserves—cash that banks hold at the Federal Reserve—scarce. Banks hoarded reserves to ensure they could meet their own funding needs, leading to a sharp increase in the cost of borrowing reserves, as reflected in the spike of the federal funds rate above the Fed's target. To address this, the Federal Reserve initiated a series of emergency measures: Liquidity Facilities: The Fed introduced several facilities, such as the Term Auction Facility (TAF) and Primary Dealer Credit Facility (PDCF), to provide liquidity to banks and primary dealers. Quantitative Easing (QE): Beginning in late 2008, the Fed started its first round of QE, which involved purchasing large quantities of longer-term securities, including U.S. Treasuries and mortgage-backed securities (MBS). These purchases injected substantial reserves into the banking system, alleviating the scarcity of reserves and lowering borrowing costs across the economy. By increasing the supply of reserves through these measures, the Fed aimed to stabilize the financial system, restore normal functioning to credit markets, and support economic recovery. With the advent of quantitative easing in 2008, the U.S. Federal Reserve (Fed) moved from a scarce to an ample reserves regime. The Fed used to control rates by managing the supply of bank reserves so that interest rates would clear at target. But now banks frequently hold substantial reserves. These reserves are now managed and incentivized by the Fed, which pays interest rates on reserve balances (IORB). Non-banks, such as money market funds, can also park money at the Fed’s Overnight Reverse Repo Facility. These two mechanisms act as a floor system, allowing the Fed to control short-term interest rates. For example, if interbank rates fell below IORB, a bank could make more money using the Fed facility and would do so. What was the: dash for cash, and what happened in the September 2019 Repo Crisis? The recent dash for cash highlighted the importance of understanding liquidity stress dynamics in key funding markets. The sharp spikes in repo rates in March 2020 were clear signs of severe liquidity stress. We previously observed similar stresses in money markets when reserves became scarce in September 2019. The Fed's quantitative tightening (QT) began in the fall of 2017, and by mid-September 2019, $700 billion in reserves had been drained from the financial system. What Happened in September 2019? On September 16, 2019, $70 billion was withdrawn from banks and money market funds to meet quarterly tax payments. Simultaneously, $50 billion in long-term Treasuries settled, which were purchased by dealers, further straining their reserve positions. At that time, hedge funds significantly ramped up their borrowing, and repo spreads widened, particularly in the bilateral segment of the market, where banks and gilt dealers were lending at much higher rates compared to borrowing from non-banks. Will the Fed respond the same way this time? Could the same liquidity-type crises happen again? First, it's important to recognize that in 2019 and 2020, the Fed used repos reactively as a firefighting tool to address liquidity crises. Learning from these market disruptions, the Fed established a new standing repo facility (SRF) to proactively provide liquidity whenever needed. This facility has a capacity of $500 billion, which is expected to be sufficient to handle liquidity demands during future periods of stress. Additionally, the Fed introduced another repo facility called the Foreign and International Monetary Authorities (FIMA) Repo Facility, allowing foreign central banks to access dollar liquidity. Generally, the Fed aims to avoid repeating past mistakes. Reflecting this, the Fed recently announced a reduction in the pace of quantitative tightening (QT) for its Treasury securities from $60 billion to $25 billion per month, partly to lower the risk of another liquidity crunch. Looking ahead, a new ruling by the U.S. Securities and Exchange Commission (SEC) from December 2023 mandates a shift to central clearing of repos by June 30, 2026. What could still go wrong? The Treasury market seems more fragile now than it was before the Global Financial Crisis (GFC). Algorithms account for 60%-80% of trading depth at any given time, but they tend to shut down during periods of high volatility, such as market scares. This can exacerbate fragility during risk-off events, especially with dealers constrained by post-GFC capital rules. There is a circular relationship between the Fed and the markets. The Fed cannot precisely determine in advance when reserves will shift from being ample to scarce; instead, it relies on market signals and pressures to gauge when a tipping point might be near. Speaking at the U.S. Monetary Policy Forum in New York on March 1, 2024, Fed Governor Christopher Waller noted that increased use of the Standing Repo Facility (SRF) could indicate that reserves are nearing an ample level. However, this still leaves directional illiquidity risks in the market, even if those risks are somewhat mitigated by the new backstop measures. The bottom line What is beginning to happen is that there are new protocols in Treasury markets for trading all-to-all participants. These algorithms will reduce capital, and hedge funds will begin to step in. As these protocols get built out, more non-traditional price makers and market participants will be able to help support unexpected stress in the Treasury market. The institutional features are in place and have changed the market structure to reduce the risk of a repeat of 2008 and 2019, but everything has a limit at some point, and something is unbreakable until it breaks. This lesson we all have learned from Titanic is: never doubt about a natural force's power. I believe, that even the abstract reality of money and markets follow the same principle, and when this natural force decides to act, no one can stop it, otherwise they could've prevented what happened in 2008 and 2019. Technical analysis is not 100% perfect, as any other financial instrument that tries to predict the market, but the signals I have captured from the Inverse Correlation of the US Reverse Repo Market and the US Stock Market, are Very Strong. If the US Reverse Repo market starts a strong Uptrend, it could trigger the Stock Market Crash. Since, we are expecting big moves from the Fed in September, which is a regular period of withdrawal from banks and money market funds to meet quarterly tax payments, volatility is on the way; maybe the Fed will be able to hold liquidity steady, but only time will tell. From my experience, this is the best time to review all investment strategies cutting risks as much as possible. Let's hope for the best while preparing for the worst. - Good Luck and Good Profit My Friends: Disclaimer: The information presented on this channel is for news, education, and entertainment purposes only. The information does not constitute an offer or solicitation to buy or sell any investment product(s) or investment strategies, or a substitute for professional investment advice. It does not take into account your specific investment objectives, financial situation or needs. I am not a financial advisor or a licensed investment professional. Please consult with your financial advisor before following any investment strategies discussed in this channel. ,
FRED:RRPONTSYD
by EDWARDCASHTRADER
Knock Knock. Who's There? Vibecession Ft. US Interest RatesHello Everyone, IMPORTANT: ALL FED POLICIES LEAD TO NEGATIVE OUTCOMES TLDR AT THE END In February 2022 the Federal Reserve gave us the fastest rate raising campaign in history to try and combat very high inflation, but they were very late in raising rates causing one of the worst inflation in 40 years. During his speech at Jackson Hole he confirms rate cuts in September due to inflation being under control and the labor market "cooling." Good news is inflation is under control, however this is only the start of our labor market "cooling." Jerome Powell is extremely late in cutting rates and will be cutting rates because we are getting BAD economic data and the cracks are showing in our labor market, commercial real estate, and banking sectors. The Federal Reserve 100% KNOWS a recession is coming that is why they are cutting rates. We have Jerome Powell come up on stage sweet talk to us about a soft landing, inflation under control, and how he will cut rates to help the labor market. He's not going to be instilling fear in Americans as a chairman. Just Remember, ALL FED POLICIES LEAD TO NEGATIVE OUTCOMES. Recession is coming, Sahm rule and inverted yield curve hasn't been wrong and it won't be wrong this time. This time it's not different. TLDR: Jerome Powell is too late in cutting rates causing a recession
ECONOMICS:USINTR
by justaturboman44
1
Federal Reserve is Behind the Curve, Recession is 100% CONFIRMEDHello everyone, The federal reserve has kept interest rates at near zero and printed the MOST money in US history back in 2020 and this has caused one of the worst inflation in 40 years. Jerome Powell decided to fight inflation by giving us the fastest rate raising campaign in history. He has kept rates too high for too long and we are now guaranteed a recession. Jerome Powell will find himself in a position to cut rates very fast due to the cracks in the job market. It is already too late we will be witnessing a huge spike in unemployment. Who knows how high this can go, back in 1929 unemployment hit 24.9%.
FRED:UNRATE
by justaturboman44
The bearish case for risk-on assets during rate cuts.It’s interesting to observe how, historically, every time the Federal Reserve cuts interest rates, we tend to see a rise in unemployment and a decline in the S&P 500. While rate cuts are often used to stimulate the economy, they can signal underlying economic challenges that lead to market downturns and job losses. 📉📊 Here are two charts showing the relationship between interest rates, unemployment, and the S&P 500 over time. Having said that, I'm open to the idea of a 'This time is different!' scenario and a 'soft landing,' especially given how aggressively the Fed has raised interest rates this time.
FRED:UNEMPLOYShort
by Ramiknfr
Macro Monday 61 - Fed Balance Sheet Signals Liquidity BounceMacro Monday 61 Fed Balance Sheet Hits Long Term Supporting Trend Line The Federal Reserve Balance Sheet The balance sheet is published weekly, typically on Thursday afternoons, and it provides valuable information on the direction of global liquidity and the fed’s monetary policy. When the Federal Reserve’s balance sheet increases, it means that the central bank is acquiring more assets. This expansion can occur through purchases of Treasury securities, mortgage-backed securities, or other financial instruments. The increase in assets typically leads to greater liquidity in the financial system and can influence interest rates. Conversely, a decrease in the balance sheet indicates asset sales and reduced liquidity The Chart - FRED:WALCL ▫️ Since April 2022 the Federal Reserve Balance Sheet has reduced from $8.973 trillion to $7.140 trillion (reduction of $1.833 Trillion). ▫️ Right now, the chart has signaled that we have hit a critical diagonal trend line support (red line on chart). ▫️ We have hit this red trend line twice in the past (Sept 2019 & Aug 2008) and on both occasions it bounced from the red trend line and the balance sheet thereafter increased significantly for 2 to 5 years. If you follow me on Trading view, you can revisit this chart at any time and press play to get the up to date data and see if we have held the line or fallen below it. What does the following mean to you? ✅High likelihood of interest rate reductions in Sept. ✅Apparent stabilization of the rate of inflation (U.S) ✅A current stable labor market in the U.S ⏳The possibility of the balance sheet bouncing from trend support and increasing from the support line as it did in the past for 2 years+ (Increasing Global Liquidity). Versus 🚨 The yield curve un-inverting (moving above 0) 🚨 Sahm Rule Triggered 🚨 The marginal increase in the U.S. Unemployment Rate which is consistent with prior recessions. 🚨 U.S. Initial Jobless Claims and Continuous Jobless claims have had increases consistent with pre recession historic activity. 🚨Job openings reducing since March 2022 from approx. 12m to 9m (this would be the largest pre recession drop ever if followed by a recession. 🚨 Warren Buffet sitting on the biggest pile of cash ever. Does this all say “soft landing” imminent or should we be worried? In my opinion, we will know by Jan 2026. Its a big window of time, but the timing is the biggest challenge, and if we can take one thing from the above, volatility is guaranteed. Happy Trading PUKA
FRED:WALCLLong
by PukaCharts
2
Lower inflation do not mean things will become cheaperLower inflation and interest rates do not necessarily mean that prices will decrease. If I annualize the inflation numbers instead of focusing on the monthly figures, the overall picture becomes much clearer. 2 and 10 Year Yield Futures Ticker: 2YY, 10Y Minimum fluctuation: 0.001 Index points (1/10th basis point per annum) = $1.00 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
ECONOMICS:USIRYYLong
by konhow
7
UAGASP / UKRAINIAN GAS PRICEUAGASP/USD Analysis with Geopolitical and Economic Context: The chart reflects the average price of gasoline in Ukraine denominated in USD. The key dates highlighted on the chart are critical for understanding potential future shifts in gasoline prices based on global and local factors. Historical Context: • Long-Term Average Price: Historically, the average price of gasoline globally has been between $1 and $1.3 per liter. This benchmark serves as a reference point when analyzing the current and projected prices in Ukraine. • Current Trends: The chart shows a significant rise in gasoline prices in recent years, correlating with global economic shifts, supply chain disruptions, and geopolitical tensions, particularly involving energy-rich regions. Key Dates and Potential Influences: 1. December 2026 (12/01/26) - Potential Price Surge: • Scenario: By the end of 2026, several factors could drive a significant increase in gasoline prices. These include geopolitical tensions in major oil-producing regions (such as the Middle East or Russia), global economic recovery post-pandemic leading to higher demand, and potential supply constraints. • Impact on Prices: The price of gasoline could surpass historical averages, driven by both increased global oil prices and local factors like currency depreciation, higher transportation costs, and increased excise taxes. 2. October 2029 (10/01/29) - Stabilization or Decline: • Scenario: By late 2029, technological advancements, a potential increase in global oil supply, or shifts towards alternative energy sources could stabilize or even reduce gasoline prices. Additionally, Ukraine’s economic situation might improve, strengthening the Hryvnia against the USD and mitigating price increases. • Impact on Prices: Prices might stabilize, returning closer to the historical average of $1-$1.3 per liter, assuming reduced demand for gasoline due to a potential increase in electric vehicle (EV) adoption and alternative energy sources. Global and Local Factors Influencing Gasoline Prices: • Global Oil Prices: The price of gasoline is heavily influenced by global oil prices, which can fluctuate due to geopolitical events, OPEC decisions, and shifts in global demand. • Currency Exchange Rate: The strength of the Hryvnia against the USD plays a crucial role in determining local gasoline prices. A weaker Hryvnia would increase the cost of imported oil, leading to higher gasoline prices. • Transportation and Distribution Costs: Rising transportation costs, driven by higher fuel prices or logistical challenges, could further increase the price of gasoline in Ukraine. • Government Policies: Changes in excise taxes, subsidies for alternative energy, or regulations aimed at reducing carbon emissions could impact gasoline prices. Higher taxes on fossil fuels could drive prices up, encouraging a shift towards more sustainable energy sources. Consider the Shift to Electric Vehicles (EVs): With the potential for sustained high gasoline prices and increasing environmental concerns, it might be time to consider the benefits of switching to electric vehicles. Tesla, a leading EV manufacturer, represents a significant shift in the automotive industry towards cleaner, more sustainable transportation options. • Cost Savings: Over the long term, EVs could provide significant savings on fuel costs, particularly if gasoline prices remain high. • Environmental Impact: Reducing reliance on gasoline can contribute to lower greenhouse gas emissions, aligning with global efforts to combat climate change. • Technological Advancements: Tesla and other EV manufacturers continue to innovate, improving battery technology, increasing vehicle range, and reducing the overall cost of ownership. Conclusion and Reader’s Consideration: As gasoline prices in Ukraine and globally continue to fluctuate, driven by a complex mix of geopolitical, economic, and environmental factors, it raises an important question for consumers: “Is it time to transition to electric vehicles?” Exploring options like Tesla and analyzing the broader EV market could be a forward-thinking strategy in an era of rising fuel costs and increasing environmental awareness. The shift towards EVs not only offers potential cost savings but also supports global sustainability goals. What are your thoughts? Is now the right time to consider going electric?
ECONOMICS:UAGASP
by trushkovskiy
btc/rrpas i come from hibernation to give you the mother of all shorts... BTC and i have multiple reasons why... 1. groups.csail.mit.edu 2. japan carry trade (alot of crypto was purchased using negative loans in yen) and 3. giving the keys to larry tinkle finkle (the OG financial crisis architect). laugh all you want if im wrong im wrong and ill be able to offload my bag at 100k like the rest of the masses, or im right will have a massive discount and still sell my bag high and have a great opportunity to buy more...
FRED:RRPONTSYD
by tntaz008
UAWAG/USD / Salaries in UkraineUAWAG/USD Analysis with Geopolitical Context: The chart reflects the average wage in Ukraine denominated in USD, showing significant fluctuations over time. Key dates are marked on the chart, which align with potential changes in geopolitical scenarios and their impact on Ukraine's economy. Key Dates and Potential Influences: July 2027 (07/01/27) - Post-Conflict Economic Rebuilding: Scenario: By mid-2027, if the previously discussed freeze or resolution in the conflict with Russia is maintained, Ukraine could enter a phase of economic rebuilding. International aid, investments in infrastructure, and efforts to stabilize the economy may start showing tangible results. Impact on Salaries: With the economy stabilizing, there may be gradual improvement in wages, especially in USD terms. However, this growth may still be modest due to the lingering effects of the war and the ongoing need to rebuild various sectors. June 2029 (06/01/29) - Economic Strengthening and Wage Growth: Scenario: Assuming continued stability and successful economic policies, Ukraine could see more robust economic growth by 2029. This period might mark the beginning of a significant improvement in living standards, with the possibility of higher foreign investments and stronger currency reserves. Impact on Salaries: Average wages in USD could see a notable increase during this period, driven by economic growth, a stronger Hryvnia, and improved employment opportunities. This would be a positive period for the Ukrainian workforce. June 2033 (06/01/33) - Potential Economic Challenges or Recession: Scenario: Around 2033, external factors such as global economic conditions, shifts in trade dynamics, or even internal political changes could introduce economic challenges for Ukraine. This might include a recession or a slowdown in economic growth. Impact on Salaries: In such a scenario, wage growth could stall or even decline. Inflationary pressures, reduced foreign investments, or economic mismanagement might erode the gains made in the previous years, leading to lower average wages in USD terms. January 2038 (01/10/38) - Long-Term Economic Outlook: Scenario: By 2038, the economic landscape could stabilize after the challenges of the early 2030s. This period might see Ukraine either recover from or adapt to the economic shifts of the previous decade. The outcome will largely depend on global economic conditions and Ukraine's integration into international markets. Impact on Salaries: Wages in USD might start to improve again, reflecting a more stable and potentially growing economy. However, the pace of this recovery would likely be slow, contingent on the broader global economy and Ukraine's ability to maintain political and economic stability. Conclusion: The UAWAG/USD chart highlights the potential for significant wage fluctuations in Ukraine over the next decade. Key events, such as the resolution of the conflict with Russia, economic rebuilding, and possible future economic challenges, will all play crucial roles in determining the average wage levels in USD. While there is potential for wage growth, particularly in the late 2020s, there are also risks associated with global economic conditions and internal political stability that could hinder this growth. As a result, Ukrainian workers and policymakers should be prepared for both opportunities and challenges as the country navigates this complex economic landscape. Ultimately, these projections underscore the importance of strategic economic planning and the need for Ukraine to build resilience against external shocks while fostering sustainable economic growth.
ECONOMICS:UAWAGLong
by trushkovskiy
USHPI / US House Price Index US House Price Index (USHPI) Analysis: The chart indicates that after a prolonged period of growth, the US housing market is approaching a critical point. The index is currently at its peak, but there are strong indications of an impending decline. Short-Term Outlook: As we approach early 2025, the chart suggests a major downturn in housing prices. The red arrow points to the anticipated decline, with the index potentially dropping to a range between 259.36 and 299.29 points. This decline reflects a significant correction in the housing market, which could be driven by various factors, including rising interest rates, reduced consumer affordability, and broader economic challenges. Mid to Long-Term Outlook: Following this decline, the chart predicts a recovery period starting around 2027, with a potential rebound in housing prices, as indicated by the green arrow. This recovery is expected to continue into the 2030s, with the market gradually regaining strength. Key Considerations: Economic Conditions: The projected downturn coincides with a period of economic instability, possibly driven by higher interest rates and a strained economy. This could result in decreased demand for housing, leading to lower prices. Market Timing: For those looking to invest in real estate, the period from 2027 onwards might present an excellent buying opportunity, as prices begin to recover from the expected lows. Long-Term Strategy: The long-term outlook suggests that the market will eventually recover, but the initial phase of the 2025 downturn could be severe, with a prolonged period of lower prices.
ECONOMICS:USHPIShort
by trushkovskiy
US HOUSING MARKET CRASHUS Real Estate Price Index Analysis: The chart illustrates a long-term upward trend in the US real estate market, with prices consistently climbing over the years. However, we are now approaching a critical phase that requires close attention. Pre-Election Period and Mid-2025 Outlook: As we move towards the upcoming elections and into mid-2025, real estate prices in the US are expected to continue their ascent. This trend will be heavily influenced by consumer purchasing power and interest rates on loans, which individuals should monitor separately. The continued growth is driven by demand, but this is likely to face significant headwinds soon. Impending Crisis in 2025: As we enter 2025, the real estate market is on the brink of a major crisis. Prices are predicted to plummet, potentially falling to an average of $380,000 per home. If prices break below this level and sustain, we could see a further drop, possibly revisiting the 2020 price levels where the average home price ranged between $280,000 and $300,000. Market Correction and Future Growth: The market is expected to correct by approximately 30%, after which it should resume its growth trajectory. This correction will be tied to the growing unaffordability of new homes for the average family, as credit interest rates rise to levels beyond the reach of many. Consequently, more people will opt to rent rather than buy, leading to an oversupply in the market as homeowners struggle to keep up with mortgage payments. With the increasing number of properties flooding the market and demand not keeping pace, the imbalance will push prices down. Additionally, global military conflicts and the policies of the Democratic Party, should they win the election again, will likely lead to a prolonged two-year recession from early 2025 to the end of 2026. Real estate will be one of the last sectors to recover from this crisis. Strategic Buying Opportunity: Given this outlook, I anticipate a market bottom by the end of 2026, making early 2027 the optimal time to purchase real estate in the US. This period should offer the best prices before the market stabilizes and begins its next growth phase.
ECONOMICS:USSFHPShort
by trushkovskiy
Macro Monday 59~Japan Interest Rate Hikes Often Lead Recessions Macro Monday 59 Japan Interest Rate Hikes Often Lead Recessions Apologies for the late release this week, I was ill yesterday and I am slowly making a recovery. This week I am keeping it brief however the chart really will speak for itself. If you follow me on Trading view, you can revisit this chart at any time and press play to get the up to date data and see if we have hit any recessionary timeline trigger levels. They are very handy to have at a glance. The chart illustrates the Japan central banks Interest rate history and overlays the last 7 recessions. A few key patterns and findings are evident from the chart which I will summarize below. The Chart - ECONOMICS:JPINTR SUBJECT CHART ◻️ 5 of the last 7 recessions were preceded directly by Japan Interest rate hikes. - Arguably it is 6 out of 7 if you include the 1980 recession with the 1981 recession (which happened as rates were still declining from the original increase). ⌛️The average length of time from the initial hike to recession was 11.6 months. - This would be Jan/Feb 2025 based on the initiation of Japan’s rate increases in Feb/Mar 2024. If you read my material you’ll know that the date of Jan 2025 has repeatedly arisen as a concerning date on multiple charts. This does not guarantee anything other than historical time patterns on multiple charts seem to point roughly towards Jan 2025 as a month of concern. ◻️ The minimum time frame from initial hike to recession was 8 months (Oct 2024) and the maximum time frame 18 months (Aug 2025). This can be our window of concern. ◻️ Its important to note that the rates have remained elevated or increasing for longer than the above timelines outset. In this chart we are only looking at the the first rate increase to recession initiation timeline. We are doing this establish a risk time frame. In the event rates remain elevated into month 11.6 (the average timeframe) we will know we are entering dangerous territory (Jan 2025). Likewise we could go a long as 18 months which is the maximum timeframe. This is all dependent on rates remaining elevated or increasing. A reduction in rates could deter or remove the risk timelines discussed. What happens next is dependent on what the Japan Central bank does. History suggests when they start to increase rates its for a minimum of 6 - 8 months (Sept - Oct 2024), lets see if they pass these months and start to move towards Jan 2025 (the average time line from rate increase initiation to recession). This is a move into higher risk territory. I want to add last week summary as a reminder that multiple other charts are lining up to suggest we may have volatility in the coming 6 months: Macro Monday 58 Recession Charts Worth Watching What to watch for in coming weeks and months? ▫️ If both the 10 - 2 year treasury yield spread and the U.S. Unemployment Rate continue in their upwards trajectory in coming weeks and months, this is a significant risk off signal and recession imminent warning. ▫️ Since 1999 the Federal reserve interest pauses have averaged at 11 months. July 2024 is the 11th month. This suggests rate cuts are imminent. ▫️ The 2 year bond yield which provides a lead on interest rate direction is suggesting that rates are set to decline in the immediate future and that the Fed might lagging in their rate cuts. Furthermore, rate cuts are anticipated in Sept 2024 by market participant's. ▫️ Finally, rate cuts should signal significant concern as most are followed immediately by recession or followed by a recession within 2 to 6 months of the initial cut. Yet the market appears to be calling out for this. This is high risk territory. Combine this with a treasury yield curve rising above the 0 level and an increasing U.S. unemployment rate and things look increasingly concerning. (for all of the above charts see last weeks Macro Monday). ____________________________________ As always you can log onto my Trading View press play on the chart to see where we are, and get an visual update immediately on if we are at min, avg or max recessionary levels. PUKA
ECONOMICS:JPINTR
by PukaCharts
4