Rewrite The Textbooks.
On Friday morning, the knee-jerk reaction to June payrolls served as a stark reminder of just how entrenched the "good news is bad news" dynamic has become over the last couple of months.
When the headline jobs number blew away estimates, US equity futures immediately knee-jerked lower, while yields surged (by the end of the day, two-year yields had risen the most since January 4).
To be sure, this isn't a "new" phenomenon. The post-crisis years have, at various intervals, been defined by it
Yes it is a topsy -turvey upside down world … At least in this post it was not all blamed on Trump… He is merely sort of a bacteria form that thrives in the present medium… I don’t have a clue what it will take to change all that though….
After Powell testifies on Wednesday and everyone is done parsing every word, attention will start to turn to earnings season. I suspect many of the numbers will show the growth that would cannot support current earnings multiples, and may not show growth at all. But I’m not sure that will matter. It seems that most analysts are projecting growth in the 4th quarter. Perhaps the market will ignore earnings this quarter, because the rate cuts will be expected to kick in at the end of the year, or the trade war will be resolved eventually, and growth will then resume.
That is correct …they will always find some reason until they finally can’t sell it…..
“…If this goes on for another five years…” It won’t. At 106% debt/gdp and now metastasizing in trillion$ – and within a (tiny Orangehole~) handful of percentage points from post-WWII highs – there is no feasible way that Treasury rape can sustain it; not while the 1% pillage continues to gut the middle class: tribal demagoguery – like CB racketeering – becomes effete when people can’t afford a comfortable life without being gouged by credit vig predators for life. People will eat the rich, politically speaking, before allowing their children to languish in privation,
Look at what happened at debt/gdp highs in late 1940s; the next three decades of actual price discovery markets were decidedly lackluster until 7 recessions later when, in 1980s, it had reached a manageable nadir. Reductio ad absurdism? Not a chance. One of these days the first alto is going to scream FIRE! in the overcrowded debt theater of illusion and the inevitable mechanics of (money) supply and demand will reset this untenable virtual game of very real chicken.
“first algo” – although the Freudian autocorrect slip is telling.l.l