Founder/CEO of Arkomina | Investor | Macroeconomist | Stock Picker | Not investment advice (see disclaimer) | ArkominaResearch.com/Subscri…
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Markets still expect Fed rate hikes later this year.
Kevin Warsh has already pushed back and the dot plot is giving a distorted picture.
Why hikes are off the table, what his task forces will actually change, and what to watch in tomorrow’s Sintra panel with Lagarde, Bailey & Macklem.
arkominaresearch.substack.co…
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This is an odd list.
Most cities in Europe and Asia are safer than any bigger US city or Amsterdam and Barcelona.
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Any1 responding Putin, should actually go there and try living in Russia, then come back and take this poll again.
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Many are trying to ridicule him, but Michael is not wrong.
He is pointing out some important truths:
1) Many stocks have been disconnected from fundamentals for a while now.
2) Yes, the growth rate is declining.
3) Yes, the AI CAPEX is in a bubble.
4) Yes, $NVDA is scheming to show higher revenue.
Let me add some more:
5) No, we are not early cycle, not by any stretch of the imagination.
6) No, the economy is not "strong", "resilient", "healthy", "solid", "stable", or whatever nonsense the #Fed likes to use.
7) Yes, the #recession risk is way underpriced.
8) Yes, bubbles can expand further, but no, they don't last forever.
9) No, you don't have any "superior" knowledge or skill, it's all a bubble activity.
10) No, double-digit mkt (or triple-digit AI related) performance yr after yr is not normal.
11) Yes, this means that the mkt will need to have a number of negative yrs to get to its 8%-ish LT mean.
12) No, the Fed, the government, or whoever will not be able to prevent that.
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By now you've probably heard a lot about how great Sep Employment Report was.
However, the data disagrees with that telling us not only it wasn't "great", but it was so weak that it points to a #recession.
I'll explain why in a thread.
1/11
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Nice to see ppl tweeting this without realizing it's completely impossible to do without increasing deficit big time...
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Yes.
He is just one sad example of a person who was an entertainer for every1 in order to try to hide all the sadness and pain inside him.
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All 3 could be driving or standing depending on a slope and whether they are accelerating, braking or maintaining constant speed.
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So in a country of 340M these 2 fossils are the "best" choice?
Apparently 12 yrs ago there were better choices...
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In a world where looks seems more important than brains and heart, this is a result.
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Hate to tell this but I've been pointing to that ever since they first published this inaccurate data...
Make no mistake, it doesn't stop with the labor mkt but it also includes inaccurate CPI numbers.
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The mkt was down -13% after the "Liberation Day".
It is up +3% tdy and remains down -8% from the "Liberation Day" and this account writes about their favorite political hero being a "master strategist"...
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Congrats to the GOAT 👏👏👏👏👏!
At least 3x all 4 grand slams.
No1 came even close to what you've done... and the best part - journey's not over yet
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For any1 thinking how the Middle Ages were better times than now - stop dreaming, they weren't
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Interesting what this world has turned into when any1 who's genuinely polite is immediately identified as a phishing scammer...
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Absolutely.
It shows how big tigers actually are when a Rottweiler looks like a stuffed animal in comparison.
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This implies the government knows better what to do with billions of US$ than individuals...
Who believes this?
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His resignation would present an unfavorable precedent where politicians can bully a Fed Chair out of the office.
That's a no-go and would be highly problematic for the Fed's independence, sth the mkt would not like very much.
I don't think he will get fired either:
nitter.app/MBjegovic/status/19455…
Will Powell get fired?
I don't think so, but I don't think that these attacks on Powell will stop either.
1) The President cannot fire Powell, but Congress can. The bar for firing Powell is high. It's all a matter of interpretation, but renovating #Fed building sounds like a procedural thing and not sth that a Fed chair should be fired for. It's hardly a "probable cause".
2) Ultimately, if Powell gets fired, this admin could stand to lose the most - popularity into the doldrums (for any1 thinking mortgage rates are way too high now, they would skyrocket if Powell would get fired), There would also be a huge disruption across the mkts, yields through the roof, which is the exact opposite of what this admin is trying to achieve. Sure, the Fed could finance the government directly at the auctions, but that's, put mildly, a financial suicide.
3) In addition, putting a "yes man" instead of Powell is not enough to ensure that the Fed mindlessly cuts rates or that it does unlimited QE again. Whoever comes there would still need to face other governors and regional Fed presidents. That person cannot exert their own will unless the majority of voters agree. What would they do? Fire every1 at the Fed and put their own "yes men"? Again, there should be "probable causes" to fire ppl. What else could they do? Coerce them to become "yes men"? Such a scenario feels way overstretched.
4) Powell is much more useful as the Fed Chair. Think of it as an insurance - if the economy tanks, politicians have a perfect scapegoat. "He maintained rates way too high for way too long and created a recession" should be an easy sell. It's not us, it's Powell. It makes 0 sense to squander such a valuable insurance.
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Jan #CPI came stronger than the mkt expected.
Some have said that #inflation is spiking back up and the #Fed should not be in a hurry to cut rates.
However, CPI details don't suggest that.
Let's parse in the latest data.
A CPI thread.
1/9
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The guy was probably better than many other lawyers but they are going to arrest him...
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Venezuela, South Africa and Brazil in top 10 was expected.
US cities are not too far either.
This list makes more sense than the one the other day about world's safest cities.
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I'm a bit late in analyzing the Nov Employment Report, but I think you'll find what I'm about to share quite interesting.
While +227K NFP and 4.2% UR appear strong, there is much more underlying weakness than the headline figures indicate.
I'll explain why in this thread.
1/11
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Many believe hurricanes and strikes are making the Oct Employment Report look weaker than it actually was.
However, that's not what the data is telling us.
I will explain why in a thread.
1/12
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Truths no1 wants to hear
1) #inflation was transitory.
2) Inflation hasn't been a problem for a couple of yrs (this period is now longer than the transitory period before that).
3) The #Fed has been too tight for too long.
4) #deflation is a much greater risk than another inflationary wave.
5) The US #economy is in a #recession or not far from one.
6) The equity mkt is in a bubble.
7) The housing mkt is in a bubble.
8) Gold is in a bubble.
9) #BTC is in an even bigger bubble.
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Many ppl look at Nov #CPI thinking the numbers are not as cool as they hoped for.
But CPI was actually cooler than both mkt's and my expectations.
I'll explain why in the details of this report.
A CPI thread.
#inflation
1/11
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So they just left a flying object go on its own risking it hitting a residential building or a passenger plane or falling on a school or sth...
You said it right, something doesn't add up here.
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2, 3, 1.
Whoever doesn't know that should be banned from ever sitting behind the steering wheel.
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If Ukraine collapses, it will be the sole fault of the US Congress for stalling the aid for so long...
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It is baffling why that guy on the bike went in that narrow space between 2 vehicles instead of using the sidewalk...
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As we are preparing for the so-called "Liberation Day" tomorrow, let me remind every1 that:
1) Tariffs increase prices, but they do NOT increase #inflation
2) Tariffs decrease economic growth by lowering personal consumption growth (or making it negative)
3) Contrary to what most ppl think, tariffs could end up deflationary in the end, if consumers pull back their spending
4) There is ABSOLUTELY NOTHING to suggest #stagflation is underway
5) The current economic slowdown doesn't have the tariff effect yet
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There was no attack here, just 2 dogs playing and the little boy was never in danger
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That's too bad if you need an outside perceived threat to have ppl with different views united...
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At first glance, the Jun Employment Report looks strong.
One might think that the BLS report tdy is much stronger than the #ADP report ydy.
However, both show almost exactly the same amount of weakness.
I will explain why in a thread.
1/13
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"Biden economy" started from a lower point of recovery in early 2021.
Saying 6M GDP decline is not a recession is 100% politics and 0 macroeconomics.
Inflation was created by the same politicians you are trying to defend, and I'm referring to both recent administrations.
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These threads take a lot of time and effort to make.
If you like the content, please love and retweet to help me spread the message.
Also make sure to check my Substack: ArkominaResearch.substack.co…
for additional macro and mkts content.
10/11
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I am baffled to see so many ppl misinterpreting this report as "strong" while in fact it is recessionary.
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Many think Dec #CPI disappointed but actually it wasn't that much hotter than expectations like news headlines may suggest.
In the details, CPI remains pretty cool.
Let's delve deeper under the hood.
A CPI thread.
#inflation
1/9
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By now, you've likely seen various reactions to Friday's Employment Report.
However, I'm sure you will love what you're about to see here.
Let's dig into the details.
An employment thread.
1/12
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To talk about pandemic is incorrect bc the whole disruption was created by politicians, not the virus.
It wasn't the largest "pandemic" but unprecedented lockdowns introduced by politicians. Don't mix these 2 up
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It is true that some ppl completely lose themselves and cannot actually care for themselves when kids are around bc all they care about are these kids.
This has nothing to do with the kids themselves and all to do with ppl.
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I'm late to address Sep #CPI but I'm sure you'll love what you're about to see.
Some have suggested #inflation may be reaccelerating due to which the #Fed should pause cuts, but the details show there are no signs of reacceleration.
I'll explain why in a CPI thread.
1/12
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Most ppl look at Sep #CPI thinking it was hotter than expected.
In reality it was cooler than the mkt and I expected.
I'll explain why in the details of this report.
A CPI thread.
#inflation
1/11
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Dec Employment Report looks hot on the surface with
💥NFP above +200K
💥UR not going up from 3.7% and
💥AHE running at +0.4% MoM for the 2nd month in a row.
However, there is much more weakness under the hood.
Let's dive deeper into the numbers.
A thread.
1/8
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It happened once in history with completely different set of structural factors that enabled inflation to resurge but don't exist tdy - on the contrary, we have deflationary effects now.
That chart is meaningless and completely misplaced when brought up in a context of tdy's world which already has deflation.
More on that:
nitter.app/MBjegovic/status…
I've seen opinions (like @biancoresearch) that LT #inflation is now at 3%.
However, the mkt doesn't believe that AT ALL as 5y breakeven is around 2.2%, while 10 yr breakeven around 2.3%.
Mkt based inflation expectations have been well anchored around these levels (+/-few tenths of pp) for a number of months since 2021.
IOW mkt never actually bought any LT inflation spiking up narratives, not even in H1 2022 when official reported inflation figures were the highest in 40+ yrs and 10 yr breakeven didn’t go above 3%.
Now the best part.
We've seen these levels of mkt inflation expectations in the 2010s (2010-2014 and 2018) when #deflation was more of a concern than inflation.
IOW, these levels are not out of the ordinary that they in any way negate the below 2% inflation.
Now an even better part.
When we switch just 2 of the extremely lagging components (Shelter and Used Cars) for real inflation measures, it turns out that core #CPI with ALNRI and MUVVI has been below the #Fed's inflation target (even negative on NSA basis - deflation) in most M from Jul 2022 - Jul 2023.
IOW not only LT inflation is not 3% like some have suggested but there is increasingly more evidence that it is actually below the Fed's target (possibly negative already) and that it has been there for quite some time now.
Currently more ppl are realizing inflation is below the Fed's target after reported core CPI was below their target in Jun and Jul.
If that persists in Aug and beyond, the Fed won't be left with anything to justify their hikes from here.
Can favorable core CPI prints continue from here?
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The Fed is stuck at 4.3%, while #CPI is virtually the lowest in more than 4 yrs, and the labor mkt points to a #recession.
Here is a thread on 7 reasons why they could miss it entirely.
🧵
1/13
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May #ADP Employment came in at +37K, well below expectations of +115K.
These numbers might as well be recessionary.
I'll explain why in a thread.
I will also explain what these numbers might mean for Friday's Employment Report.
1/8
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With all due respect this tells more about politicians of these countries than about the GOAT...
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I'm a bit late but here is my take on the Jul Employment Report.
TL/DR: numbers are weak as the details have shown for quite a while, but not all of the weakness is visible on the surface yet
The data tells us that the #recession might have begun.
Let's delve deeper.
🧵
1/10
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Feb #CPI data came a bit stronger than expected following stronger-than-expected CPI in Jan.
Some are still holding on to "inflation spiking up" narrative although nothing in CPI actually suggests that.
Let's delve into details.
A CPI thread.
#inflation
1/9
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Ppl are not born to work but to live and when you get these two mixed up you get diseases, suicides, overdoses and all kinds of other destructive problems.
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Namely, the seasonal factor in Sep 2024 was the highest of any Sep on record (data going back to 1939).
The reported NFP of +254K is clearly far from actual.
How far?
As far as a pie in the sky.
If the seasonal factor in 2024 was the same as Sep 2023, NFP would be +145K (that's more than -100K below the reported number).
If the seasonal factor in 2024 was the same as the 2007-2019 avg, NFP would be +35K (that's more than -200K below the reported number), which is among the lowest reads during that period.
The lowest ones were negative reads 2008-2010 and if the seasonal factor in 2024 was the same as the 2008-2010 average, NFP would be, prepare yourself, NEGATIVE -78K, which is well #recession-ary and more than -300K below the reported number.
And that's before normal (likely downward) revisions we will likely see in the coming months and quarters.
If we would factor in likely downward revisions (monthly + annual), we could easily be looking at close to -200K in Sep, yes you read that right.
Is that a "great" jobs growth like almost every1 described it?
Not by any stretch of the imagination.
3/11
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+254K NFP in Sep coming after +159K in Aug which was revised upward from initial +142K, seems like a great jobs growth.
This means the economy is still going strong, everything is fine, the labor mkt is nowhere near falling off a cliff, right?
Not so fast.
When looking under the hood, we are talking about #recession-ary NFP.
Yes, you read that right.
Explanation follows.
2/11
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Talking about surprises and #recession, average workweek ticked down to 34.2 hours which are recessionary levels (same as in Sep 2008, Aug 2020... you get the point):
5/11
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50 bps is not enough.
I've said this a few months ago and am sticking to it now.
The Fed should cut by 300 bps to get to neutral instantly and stand ready to cut more if necessary.
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Basing your relationship on anything material rather that individual real qualities is sooner or later destined to fail.
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At first glance, Nov #CPI was somewhat better-than-expected report (headline MoM slightly lower than expectations -0.1% vs 0%) and mostly in line (YoY headline, as well as MoM&YoY core).
But in the details #inflation is much weaker than gets recognized.
A thread.
1/17
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It's a disgrace to see an American president spreading lies about Zelenskyy.
What the world has come to...
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