Recession

Fed's Dudley Had Some Worrying Remarks During A Closed-To-The-Press Session

"...when financial conditions ease—as has been the case recently—this can provide additional impetus for the decision to continue to remove monetary policy accommodation." Said otherwise, Dudley wants financial conditions tighter, and stocks lower, and will keep hiking rates until the market reacts accordingly.

Perfect Storm 2.0 - Will The Auto Industry Ever Be The Same Again?

The automotive industry needed every single ingredient listed below to reach last year’s record setting sales number. However, something has changed. Well, in reality, everything has changed. The set of ingredients that perfectly fueled the recovery have all reversed and now power the perfect storm...

BIS Lists The Four Biggest Threats Facing The Global Economy

i) inflation could choke the expansion by forcing central banks to tighten policy; ii) serious financial stress could materialise as financial cycles mature; iii) consumption might weaken under the weight of debt, and investment might fail to take over as the main growth engine; iv) a rise in protectionism could challenge the open global economic order.

Why The Next Recession Will Morph Into A Decades Long Depressionary Event... Or Worse

"The next business cycle recession will be unending and is very likely to run years into decades and perhaps a century or more.  A declining population already indebted with record debt and zero interest rates will consume less...meaning overcapacity and excess inventories will never be fully cleared before the next downturn...and on and on and on."

An Open Letter To The Fed's William Dudley

"Let’s face it... The Fed can’t hold the financial order together much longer anyway. Why pretend you can with utter nonsense like crashing unemployment? It’s insulting...Your credibility’s shot..."

"Is The Equity Market Irrational Yet?" Citi Answers With The Following Chart

As the cycle matures, pair-wise correlations drop. When the cycle turns and stock markets drop, correlation picks up rapidly as investors “sell what they own”. In 2000/2001 and 2006/2007, this correlation indicator fell to around 20% before markets peaked out. We are currently at 30%.

Dear Market, I Think Janet Yellen Broke Up With You Last Week

"Now what has happened in the real world to accelerate the Fed’s tightening agenda, and more to the point, a specific form of tightening that impacts markets more directly than any sort of interest rate hike? What has happened is that the Fed’s reaction function has flipped 180 degrees since the Trump election."