10Y S&P 500

Paging Goldilocks: CPI Beat Makes Good News Bad Again

Remember "good news is bad news"? 

Remember “good news is bad news”?

Of course you do. Because that’s the heart of the “Goldilocks” narrative that’s propping up risk assets.

Bottom line: you do not want “too much” inflation pressure, because a sudden uptick in inflation could cause central banks to effectively revoke the market’s license to co-author the policy script by getting overly aggressive with the “hawkish” forward guidance. Recall this chart (note the yellow bar):


What does that mean? Well, it means that this morning’s CPI beat raises questions for stocks because again, “good” news (upbeat inflation print) is actually “bad” news (to the extent it argues for a removal of the punch bowl).

Sure enough, here’s the reaction in 10Y yields and futs:


“Paging Goldilocks” – you’re getting fucked out here.


1 comment on “Paging Goldilocks: CPI Beat Makes Good News Bad Again

  1. My comment from another indirectly related article on the US economy – based on its continued declining status on the world economic stage:

    Even calm water can be violent. Swim the Rio Grande and swallow a few mouthfuls and you’ll learn the meaning of “violent” – violent intestinal cramps. It gets worse in the fall when rains wash high concentrations of coli-forms in runoff into the Rio Grande, its tributaries – arroyos, and the storm sewers of the proximate towns. Yet the Rio Grande hasn’t limited border crossings and neither will a “32 foot high” fence – that desperate people will go under, over and or through. Trump’s limited imagination, limited knowledge of border breaching and coupled with his inability to accept his mistaken perceptions, and or reassess and change them – isn’t going to change. He will persist with his “fools wall.”

    Trump isn’t a genius, he isn’t smart, not even close – because his range of learning and knowledge is far too limited as he self-demonstrates publicly and daily. Trump is obviously shrewd within the very limited environments he controls with his leveraged wealth and power. Even then he isn’t even a savant – unless you consider his world class ability to straight face lie repeatedly – then lie in denying it.

    It is hard to decide whether Trump is just and only clinically insane – because it’s hard to tell where his paranoia, Self-Injury Disorder, and delusions of grandeur stop (his diagnosis of schizophrenia is questionable because it turns out the voices he was hearing – were mostly just Steve Bannon) and where his basic illiteracy and learning orders begin. Further mental pathology diagnosis is largely confused by some other obvious mental structural problems. For example – the “wiring” problems between his speech center (inability to form intelligible and grammatical/logical sentences), and his mouth – and especially his brain’s decision making inability to decide when it’s in his own best interest to keep his mouth shut.

    His Self-Injury Disorder pathologies extend to his inability to recognize and learn how his sociopathic statements (“shit hole countries” for example) harm his own agendas and further reduce any chance of his being accursed of being “sane” or “smart.” However, his Self-Injury Disorder is blurred with life long, controlled and pampered existence – where his inheritance based wealth allowed him to dictate what “true” was – as opposed to be forced into cognizant analysis on his part. This limited him from having any practiced and or reinforced critical thinking skills. The process of “decreeing the truth,” also supports his massive denial problems. So, when he makes mistakes – he simply denies them and lies that they don’t exist. This is a major problem for Trump because it doesn’t allow him to recognize his mistakes and learn from them – and grow intellectually. Trump is certainly the greatest living example of someone being “a legend in his own mind.”

    It’s even hard to judge Trump’s real “success” in that he constantly demonstrates (by lying and or taking credit for things for which he made no contributions) and that he is so extremely insecure about. Most believe that this is because of the inherited – wealth boosted leg-up given to him by his father. He was “smart” enough to hire at least some of the necessary business expertise (still didn’t prevent six bankruptcies credited to his lack of management) – people at least smart enough to generally continue to build on his inherited wealth – and arguably build the “Trump brand.” This being especially true among people that wanted to use him/his wealth and influence, and or had the same limited critical thinking skills as Trump.

    Perhaps the best and most accurate assessment of Trump and his mental abilities lie somewhere between archaic terms of “buffoon” and “fool.” Insane, incompetent, or not – Trump unfortunately and historically has become the US’s most embarrassing “elected” President to ever step on the world leadership stage. The extent of that embarrassment and danger is just beginning.

    More importantly Trump is an obvious demonstration of the abject failure of the US political party system and its for-profit campaign election industry. The 24/7 campaign cycle industry that Republicans and Democrats created, nourished, and whose members benefit from individually and collectively. The for-profit multi-billion dollar (7+ billion in 2016) campaign, election and parasitic political media industry – all of which that fail to provide the US voters with truthfully verified, qualified, competent and effective political candidates and or to insure they meet the Constitutional requirements of their elected offices – and the general expectations of US voters while they remain in office. It isn’t Trump that will destroy the US, he is only the messenger. The US’s inability to correct and adapt its political campaign and election system to a performance based and accountable system – is destroying the US from within – a task that it’s foreign enemies could never achieve.

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