2023-01-08

*** denotes well-worth reading in full at source (even if excerpted extensively here)

Economic and Market Fare:

Pesek: US recession alarm bells ringing far and wide
US corporate titans highly pessimistic on economy’s 2023 outlook but it’s not clear the inflation-fighting Fed is listening

For a central bank with such a fabled research apparatus, the US Federal Reserve sure is missing some big clues that the US economy is stalling. .......

BlackRock says we’re all doomed. It’s being optimistic
The world’s largest asset manager has forecast systemic economic chaos. The reality is even worse

 

 

Tchir: A Simple and Clear View on Markets & the Economy

For better or worse, I want to be on the record with my rather simple view.

    1. The economy is rolling over and the recession will be sooner, deeper, and longer than whatever the current consensus is (and may have already started).
        a. The 2023 Outlook – PAIN covers this in detail as do the Q1 Deflation and the Rise & Fall of Inflation of Risk Factors pieces.
    2. Markets, due to positioning and human nature, will initially misinterpret the data as a “soft landing” only to realize that the landing is going to be very hard.

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Fed Hikes Are Not the Main Problem Going Forward
.....
The real problem will occur when markets finally realize that the Fed has already done too much/set too many things in motion that even the end of hikes won’t stop this pendulum from swinging deep into “recession” ......

Quotes of the Week:

 

Mac: The problem with the "soft landing" delusion is that Fed tightening has caused every recession since World War II. The only soft landing (non-recession) took place in 2018 when Trump demanded the Fed pivot. It turns out he was right to do so, because the Fed ended up cutting rates three times in 2019. Unfortunately, this time around there are ALREADY signs everywhere that a hard landing is unfolding in real time.

J. Grantham wisdom: "There's nothing as quick & spectacular as a bear mkt. rally. With hindsight they signify very little, but at the time they frighten the pants off bears and they give hope that all is over, all is forgotten, and it's back to the races."

Charts: 
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2022 was the worst year for new auto sales (units sold) in over a decade:https://t.co/UmS245vodn

After 2008, go back three decadeshttps://t.co/0q1qxH3h4f

Automakers have been using the "supply chain" excuse to keep prices jacked up. That is running out of time. pic.twitter.com/ntvf34vDiE

— Mac10 (@SuburbanDrone) January 8, 2023

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Credit on Borrowed Time...

With policy lags, further tightening, and recession risk in 2023 -- the initial move in spreads could be simply Act 1 of a show that will go on into Act 2 this year pic.twitter.com/hDRRtZs3l8

— Topdown Charts (@topdowncharts) January 9, 2023

(not just) for the ESG crowd:

 

Will the weather eventually provoke radical action on climate?
OPINION: It could take a catastrophic weather event in the Global North to bring real action on climate breakdown

Pics of the Week:

So much for winter? Temps in the first week of Jan, and extended outlooks through 1/21, give the U.S. a running start on what could be the warmest January on record, especially in the Northeast. pic.twitter.com/b0p0QkL9wp

— Bob Henson (@bhensonweather) January 7, 2023