I believe the 2008 correlation that we have been seeing over and over again over the last months is actually enticing everyone to be ultra bearish.
We are seeing it in the put/call ratio, news flow and alike.
We are seeing it in the put/call ratio, news flow and alike.
CPI
•Inflation expectations have been deflating lower
•Inflation indicators all pointing down
•Housing rolling over
Recession expectations
•Yield curve
•Lower guidances
...
The consensus is a deep recession is looming and bearish bets are on, could we have priced most in?
•Inflation expectations have been deflating lower
•Inflation indicators all pointing down
•Housing rolling over
Recession expectations
•Yield curve
•Lower guidances
...
The consensus is a deep recession is looming and bearish bets are on, could we have priced most in?
Rate pauses and a slower pace in rate increases and pauses are mounting overseas, lastly done by Canada yesterday.
This cycle:
slowdown in demand = lower earnings = lower CPI
lower CPI = dovish FED
The thing that scares most might lead to the pivot.
bloomberg.com
This cycle:
slowdown in demand = lower earnings = lower CPI
lower CPI = dovish FED
The thing that scares most might lead to the pivot.
bloomberg.com
The dynamics are different than 2008.
The financial system isn't nearly as leveraged and instead the problem in this case is the solution.
All the discounting on the high inflation numbers will work in reverse as inflation falls.
The financial system isn't nearly as leveraged and instead the problem in this case is the solution.
All the discounting on the high inflation numbers will work in reverse as inflation falls.
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