Recently, it seems like every week I’m calling for a recession, but – every week I see new signals. Someday, like a stopped clock, I will be right. I really “liked” that inversion model – it looked accurate, at least for the last five recessions anyway. This also might explain the motivation behind the strong rally in long rates over the past month. Will it continue if we actually have a recession? Typically long rates plunge during recessions – but so do short rates as the Fed cuts like mad.
Note: We are almost at the end of the year – so I figured I’d provide some market context for the last 4 years of the Zients et al (Senile-Joe-Figurehead) administration viewed through prices.
Long story short: that means monthly charts. An old trader told me once, if you need context about a trend, pull back on your timeframe, and things will become clearer. Let’s see if that works.
A warning: sensitive readers might suffer from Chart Overload from this report.
Consumer Economy
Durable Goods, New Orders (DGORDER); $285B -3.0B, (-1.06% m/m)
Median New Home Sales Price (MSPNHSUS); $402.6K -23.0K, (-5.71% m/m)
This month we saw a contraction on durable goods – down just slightly. New Home prices also fell, and not by a small amount. The new home price drop is a new 2-year low; the last time we were at $402k was Feb 2022. Note that topping new home sales prices tend to signal recessions. Not every time, but – say 50% hit rate.
+++++++++++++++++++
Dave’s Discussion
Recently, it seems like every week I’m calling for a recession, but – every week I see new signals. Someday, like a stopped clock, I will be right. I really “liked” that inversion model – it looked accurate, at least for the last five recessions anyway. This also might explain the motivation behind the strong rally in long rates over the past month. Will it continue if we actually have a recession? Typically long rates plunge during recessions – but so do short rates as the Fed cuts like mad.
That H1B-visagate is quite the thing. Who wants to pay American workers big money? Not them. It is far better to import workers so as to increase competition for the positions, which reduces the wages they might have to pay to the little people, regardless of origin. Plus – that H1B-Visa status gives employers extra power. For example, I suspect no H1B-visa worker dared reject the DeathVax(tm) back in 2021 – if you lose your job, you get deported. I call it “Soft Slavery” in exchange for legal immigrant status. That kinda reminds me of what happened back in the 1800s.
Trump continues to be super enthusiastic about the DeathVax(tm), which saved hundreds of lives, while killing millions. This is showing up in the Calley Means/Poison Food gambit. Maybe there is some 5-D chess going on in MAGA, or maybe Calley Means is being covertly promoted by the Vax Cartel. Calley may not even know. I do think the food is poison, and given our new hypernovelty environment, I think there’s a nonzero chance that both the evil Poison Food AND the DeathVax(tm) will end up being eliminated. I think “some actors” may be used to working in the old environment where “the squirrel thing” (“look! Fruit loops!”) used to work every time, but I suspect “they” may have just shot themselves in the foot once again. To me, both Poison Food AND the DeathVax(tm) must go. Why have one when you can have both?
(more…)
by cmartenson 
