Discussion
The BRRRRR stopped.
Right now there's a slow sucking sound.
But there's still a LOT of money sloshing around.
That is not gonna end well. It needs to accelerate otherwise the whole thing collapses.
There's signs of strain all over the economy. Consumer debt way up with savings rates way down. Buyers all but disappeared from the housing market with higher rates. Commercial real estate owners choosing to default on half-empty office towers rather than refinance the mortgages at higher rates. Everyone is watching the stock market but they should be watching the bond market and Fed fund futures.
Yeah the pot is now starting to boil from all the rate hikes from last year. I’d say another year maybe two of this and well get SHTF.
The market has been pricing in a Fed pivot way too soon for a while now, although more recently it's been pushed further out.
Inflation is still running too high and the Fed is NOT going to pivot until unemployment blows up. Those are their two mandates, inflation and employment.
Officially that is their mandate but unofficially it’s the S&P500. They won’t pivot until it’s below 3200. That will likely coincide with higher unemployment but its 6 of one half dozen of the other. That’s also why it’s so dumb to buy stocks in anticipation of a pivot. By definition you are going to make less money than if you just wait for the pivot. Or at least wait for the larger drawdown first
