December 2023

It’s always called a soft landing. At first…

The unusual divergence in the chart tells me that the sales cycle has decisively turned downward in the last quarter (aka recession) but that companies have used the cover of rapidly falling raw material input costs to boost margins even further – aka Greedflation.

Liquidity is one the most important yet misunderstood macro variables. This thread will help you understand how it works. This is one of the most popular and yet misleading charts in macro. People like simple narratives: the Fed is ”pumping money” into the ”system” and that’s why equity markets go up. That’s just NOT how

The lagging effects of monetary policy are about to start impacting financial markets. With a two-year lead, changes in Fed funds rates have often foreshadowed significant volatility events in equity markets. The current narrowing leadership in the stock market, coupled with numerous recession indicators sounding alarms, supports the argument that volatility is currently unsustainably suppressed.

Bloomberg shared some evidence of the cost of living crisis many Americans face today. Since 2020:  Groceries: +25% Home Values: +42%  Electricity Bills: +25% Natural gas: +29% Rent: +20% Used Car: +35% Car Insurance: +33%  Child care: +32%  Food at restaurants Chicken dishes: +32%  Burgers: +23% Pasta: +14% Pizza: +17% Meanwhile, instead of addressing the