First, I have some bad news. My data provider decided to stop shipping futures data to me (it was a free service which I’ve used for over five years) – the last updated value was Thursday at end of day. So, my charts for all futures contracts in this report end on Thursday. Now, I have to scramble around and buy an end-of-day futures feed from someone else, get it working, make sure the data is similar enough – all before next Saturday. “Good luck with that.” So today, data is just through Thursday (6/30) for the futures charts.
Currently, I’m exploring the “impending recession” thesis – from both Chris and Ed Dowd, through a number of different lenses.
First, I’m told there is “credit contraction” happening. So, I dug out an old favorite, a FRED series called LOANS: the total number of outstanding bank loans and leases in the U.S. (through May), charted alongside the U.S. recessions (red lines). You can see that bank credit (black line) did start falling roughly in the middle of the recession, but it wasn’t the most timely indicator. Conclusion: total bank credit is not a great leading indicator, and if credit contraction is happening today, it isn’t showing up in LOANS.
Here’s another credit series: “U.S. FINRA margin debt” alongside recessions in red. Unlike the broader bank credit series, margin debt appears to be much more predictive. Often, when the margin debt contracts, a recession is in the offing. In the current cycle, margin debt started falling back in November of 2021. Implication: a recession is probably incoming. We might well be in one now. See 2008? That kinda feels like where we are now. Just minus the red line indicating recession, which always appears 3-6 months later.
Now, about rate increases.
by westcoastjan 
