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Economy

Crash Incoming 13?Another simple, without noise chart: Effective Federal Funds Rate (blue) and the S&P 500 (dark yellow). Since March, with a macro perspective, almost all my 'crash' ideas are showing that the probability of a major crash is in place; the truth be told, with a boring pattern that keeps repeating itself. I don't know if this time will be different, what I know is that this research, that I am sharing with you disinterestedly, is helping me to build a strategy to protect my wealth. Stay well, stay safe.
FRED:FEDFUNDS
by SometimesLosing
2
Fed pivot indicatorThis chart is essentially proxy for the acceleration rate of interest expense for the US government, and has been a reliable indicator of fed pivot for 30+ years as the fed has ensured the US doesn't enter a debt death spiral. To keep this line 'inbounds' they need the middle of the curve to fall ~75bp between now and the 24th Or maybe they'll allow a brief spike above, and given the length of that chart, maybe 'brief' can be a number of months But as far as what would be normal fed behavior, we're at the tightening limit for interest rates twitter.com
FRED:FEDFUNDS
by givanse
5
Is it the right time buy a house? Since Fed's tapering began in the end of 2021, mortgage figures have been in a mark up phase. There is still no indication of a correction. As a result of it, housing prices may not find support for new high levels. Monthly price changes in the negative territory are supporting this idea in the last months. However, the year over year housing price changes are still providing more room for increase. So, the price conditions may stay elevated in 2023 but the momentum is clearly losing steam. Briefly if you buy a house now, you will possibly feel right for some time but there can be a phase of price correction in 2023 and 2024. Moreover, with softening inflation rates in the coming period, the housing market prices in real terms may be better than today.
FRED:MORTGAGE30US
by The_Quantastic
1
Inflation Rate against CPI IndexAs you can see - all crashes on SPX have been synced with the above chart dipping big time. What do we have now ? The chart hasn't even gone down - yet SPX has dipped -27%. The difference between SPX's TOP and the start of declining of Inflation Rate / CPI is of an average 15-18% decline on SPX. The only problem is that we haven't even started properly declining (circled area). Two assumptions based on this - Either we still have time in this market and this was just a correction... or... ... the fall will be huge. Personally expecting markets to recover a bit and soon inflation rate will spike down together with SPX falling. Not investing big time before seeing a proper spike down. Cheers!
ECONOMICS:USIRYY
by TheSecretsOfTrading
Is the delinquency rate too good to be true?The red indicator shows the level of delinquency for each quarter. The blue index is the SPX. We have an inverse correlation. With the increase in interest rates around the world, the cost of money becomes more expensive. The payment of loans becomes more expensive, so the percentage of defaulters tends to increase. To pay off debts, positions in the equity market are liquidated. I'm waiting for the Q3 result (quarter 3 - July to September). Any bullish indication above the value of 1.24 (quarter 1) would already be a yellow signal. A value above 1.43 (Q1 2019) would be a red flag for an earthquake. That would trigger a further drop in the equity market...
FRED:DRALACBS
by andre_007
1
Housing Market Crash Incoming!Demand always rules supply. Always. BLUF: Short-term projection = TBD Mid-term projection = bullish Long-term projection = bearish to extremely bearish Traders, I have been quick to point out the tremendous amount of disinflationary data in my videos which leads CPI reports in some cases by as much as 6 months (i.e. -rent). Now, let's take a closer look at the NAHB's Housing Market Index data which helps us to better denote market sentiment. First, observe that we have entered well below the weak demand zone. This is generally an area in which we can notice softening demand. Though the housing market may still remain hot in certain cities, others have noted softening demand. Once we dive below this "Weakening Demand Zone", it can often represent the beginning of a housing market recession, or, in the case of the 2008 era, a crash! We began this crash with certain city markets plummeting through this weakening demand zone, Detroit comes to mind along with a few others. These were our lead cities to watch at the time. At the point in which weakness in these markets began to be acknowledged and reported, it was already too late. Michael Bury (aka - The Big Short) knew this. The crash had begun. The markets did not react immediately, as we all know. In fact, the opposite: it would be a full 17 months before the stock markets reached their tops and then crashed hard. In a similar fashion, the Fed was notoriously tardy in recognizing lead disinflationary indicators and reducing rates accordingly. Not until a full year and two months AFTER the housing demand fell below its weakening zone would the Fed jump in and begin to diminish rates. By then it was too late. Fast forward to 2022. Despite the fact that our U.S. housing demand has fallen far below the weakening demand zone and below the approximate median for a housing crash start, the Fed continues to raise rates at a historic record pace. These rate hikes will come home to roost eventually, but not immediately. This is why I am under the persuasion that we WILL enter a more disastrous recession or worse in 2023. The lag effect of the Fed rate hikes will have a significant consequential impact. Just as in our past housing market crash story the impact will be significantly delayed and by the time they are noticeably felt, it will be far too late. Disinflationary data, low demand, low consumer sentiment, etc., will have hit us harder far in advance and the Fed will have realized they should have pivoted sooner. Though my longer-term outlook appears rather dismal at the onset, my mid-term outlook may be rather surprising to many. I do believe that just as occurred before the 2007-2008 market crash, the preceding price action will become bullish. It took the market a full 17 months to recognize the significance of our housing data, and the fed wasn't much better. Will it be any better this time around? It might be, but as we can learn from history, the market collective and the fed are often irrational and reactionary. The case for my blowoff top past the previous year's November highs still stands. The market will begin to recognize and digest more and more disinflationary data not least of which is housing market demand. The Fed will begin to be pressured more and more to pivot. And whether due to pressure or reason, I believe they will pause or pivot soon. Then the meltup (aka blowoff top) will begin. And sometime mid to late 2023, it all ends. Secular bull market (since 2009) exited. Secular bear market entered. Be ready my friends! And pray that I am wrong! Stew
ECONOMICS:USHMIShort
by stewdamus
2
The Fed Conundrum and the Housing Market CollapseThe Fed money tightening policies are using interest-rates as a lever to fix a balance sheet problem. Higher rates feed right back into the CPI, initiating the doom loop. After the financial crisis of 2008, The Fed employed a policy action to reduce the federal funds rate to a range of 0-0.25% for seven-(7) years, during which time the CPI fell. Post-pandemic (COVID), the CPI is 97% correlated to the Fed balance sheet. Looking historically, in 1980's, the Fed Rate was ~19% (real rate was 8%). Compared to today, the Fed Rate is under 3% and Real Fed Rate is at -6%. Folks already crying about a 3% Fed Rate. A colossal policy error in the making, or is everything going "according to plan"?
FRED:MORTGAGE30US
by shri30389
4
This is a Chart of the M1SL/BTCUSD up is goodThis chart is a Chart taking the US $ money supply (M1) and / it by the BTCUSD price. The trend that this chart is showing is i think the reason why we need to go down. because the fear value per BTC is low the 15k$ i think. - Take a look at the Gold, Crude OIL and DXY. (Need to go up for stable market) - Take a look at BTC on long term holders chain fees (Need to go above 75 per day Last seen sinds may 2021) low Average Coin Dormancy (Need to go up above 30 on chart for stable/bull market Last seen sinds aug 2021) ---> studio.glassnode.com The BTC Total Supply Last Active 6m-12m and Total Supply Last Active 2y-3y needs to turn up again ---> studio.glassnode.com ---> studio.glassnode.com
FRED:M1SLShort
by SPACEMEN99
Inflation in the USWhen it comes to inflation in the US, some will say that it has become entrenched, others that it has come to a halt. The FED has over stimulated the economy and is late in the process of raising interest rates. It may be some time before you see the effect of an interest rate hike e.g. the bankers are supposed to warn interest rate hike etc., but now the FED is impatient to get price stability. It can end with a ketchup effect. When the FED raises interest rates, it will strengthen the USD and it will have an inflationary effect on other economies. After all, they are going to pay more in their currency for goods traded in USD. The interest rate curve is inverted, but unlike previously it is attributed to the fact that the economy has been over stimulated (artificially low interest rate and QE = money printing) (1). Putting the money press in motion produces empirical inflation. Although GDP has been negative for two quarters, it does not resemble a recession in American society, see for example unemployment, PMI and consumer confidence (2). The S&P 500 index is back in a declining trend in the medium term and will remain so until proven otherwise. On the 5 year chart there is a support around 3400. Now Q3 will get some attention and it can go up or down a bit. Q3 may well surprise positively (3), but after that macroeconomics will take over. Markets are volatile and trying to find a bottom. The peaks of the VIX are steadily declining (4). It indicates that we are getting closer to the bottom. Geopolitically, Ukraine in particular, but also Taiwan, is important. Russia is using energy supplies to Europe as a means of pressure in connection with its assault on Ukraine. Energy prices will be high and this will have an inflationary effect. One should diversify and not depend on totalitarian systems such as Russia and China. I found it relatively easy to get out and in of the stock market in the big V-shaped correction in February-March 2020. Since the stock market then peaked and began to fall, the trend has been insidious. If you sell out, do you come out at the bottom? I have mostly chosen to sit still, but I want to buy a little when I think the price is low and preferably not sell anything unless there is a good reason. The stock market is coming back up. That's how I see it and not a call for specific dispositions. (1) www.nordnet.no (2) da.tradingeconomics.com (3) www.nordnet.dk (4)
ECONOMICS:USIRYY
by scorpiris
Inflation is here to stay?Many believe that inflation is here to stay. IMO inflation has peaked, it just take some times for things to cool off and show on the CPI print...when deflation kicks in, it will be fast, according to past experiences. Another interesting metric not many are paying attention to is the China PPI vs US CPI, the chart is self explanatory. The latest divergence is giving a big hint on where US CPI is going...deflation will kick in? Or inflation will stay because of "decoupling"? I believe in deflation.
ECONOMICS:CNPPIYY
by timhku