Today’s Animal Spirits is brought to you by YCharts and Tropical Brothers:
See here for YCharts September Fund Flow Report
See here for tropical gear, free shipping, and sunglass straps on all orders (ANIMAL20 for 20% off)
On today’s show we discuss:
- Weekly market commentary via BlackRock
- Fed hikes could add $2.1 trillion to deficits
- 14 charts that explain inflation
- Full Stack Economics on leaning out of a career to support a significant other
- Lumber prices round-tripped
- Death of the starter home
- John Paulson on the frothy housing market
- Don’t Take Personal Finance Advice From Billionaires (AWOCS)
- Klarna announces a fresh round of layoffs
- Chamath is closing 2 SPACs
- Changes in global wealth 2021-2022
- Airbnb cleaning fees
- Industry v Succession
- Margin Call
- A Random Watch Down Wallstreet
- The Raid
- Abandoned Lord of the Rings Set
On the one hand I understand that they want to be certain this isn't the 1970s.
On the other hand, I don't think this is very similar to the 70s and that they're now creating a lot more downside economic risk than they think…..
— Cullen Roche (@cullenroche) September 21, 2022
Federal Reserve Chairman Jerome Powell on the impact of the Fed's aggressive pace of rate hikes: "No one knows whether this process will lead to a recession or if so, how significant that recession would be."
— Brian Cheung (@bcheungz) September 21, 2022
Pace of rate hikes. #FedDay pic.twitter.com/kquHBtygvk
— Kathy Jones (@KathyJones) September 21, 2022
Jeremy Siegel of the Wharton School ripping apart Powell and the Fed…
“They Know Nothing” 2.0 pic.twitter.com/6F1NDHVh55
— Stephen Geiger (@Stephen_Geiger) September 23, 2022
Fun fact… for the Fed to make housing "more affordable" at 7.0% vs 2.5%, home prices would need to drop more than 40%. https://t.co/DO5r519cqE
— Jake (@EconomPic) September 26, 2022
So it’s fun that we can now say something that’s never happened before is going to happen.
-We get inflation down from elevated levels without a recession
-A 50%+ retracement of a major bear market selloff goes on to make new lows
So you have to decide which it is.
— Conor Sen (@conorsen) August 12, 2022
Not throwing in the towel: It’s surprising how little capitulation there has been in the market. Yes, the sentiment surveys are all negative, but actual flows have not been. This seems consistent with the lack of volatility in the market (as illustrated by the muted VIX). pic.twitter.com/HYU9dsADTX
— Jurrien Timmer (@TimmerFidelity) September 22, 2022
Summing up, the global bond market has lost over one-fifth of its value this year.
Before 2022 such a move was thought to be impossible.
Note that this index is priced in dollars, and with 53% of this index is foreign-denominated bonds, the strong dollar is killing it. pic.twitter.com/ZazJPUh7XH
— Jim Bianco biancoresearch.eth (@biancoresearch) September 27, 2022
Widespread losses among target date funds YTD. Avg fund in 2030 target year and up is in a bear market. pic.twitter.com/CFypA0ps32
— Jeffrey Ptak (@syouth1) September 24, 2022
1) Great Charlie McElligott note this AM.
Cleveland Fed Nowcast CPI strength through 9/13 is most ironically a catalyst for further USD strength.
“Everything else is an emerging market” as we effectively export our inflation problem to solve it.
A MS chart on the topic: pic.twitter.com/sEDJRXjJqM
— Gavin Baker (@GavinSBaker) September 26, 2022
INFLATION INDICATOR: Chipotle’s Garlic Guajillo Steak burrito is $19 pre-guac, tax, and delivery fees/tip in NYC pic.twitter.com/NrL6gFk5KZ
— Exec Sum (@exec_sum) September 21, 2022
The 30-year fixed rate mortgage jumped to 6.25% last week, according to the Mortgage Bankers Association. That’s the highest level since October 2008.
Applications for purchase loans are down 30% year over year
— Nick Timiraos (@NickTimiraos) September 21, 2022
6.7% mortgage rates + these frothy home prices are a lot like 13% mortgage rates in the early 80s. https://t.co/Vc0xBWKuoy
— Lance Lambert (@NewsLambert) September 24, 2022
The average 30-year fixed mortgage rate moves up to 6.87%.
This is getting pretty close to a 1981-level mortgage rate shock. pic.twitter.com/lDtNkgnRJg
— Lance Lambert (@NewsLambert) September 26, 2022
Watch in real time as home buyers react to the latest spike in mortgage rates!
Available inventory of unsold single family homes rose this week to 557,000
Price cuts seeming to accelerate too
That's the @AltosResearch real estate market vid for the week 🧵📽️👇 pic.twitter.com/2jyiLzYL6J
— Mike Simonsen 🐉 (@mikesimonsen) September 26, 2022
AAII bears >60% for only the 5th time in history.
One of the worst years ever for a 60/40 portfolio will do that, but note the avg return a year later for the S&P 500 was more than 33%.
"When everyone is alike, then somebody isn't thinking." General Patton pic.twitter.com/gGzwr3InNx
— Ryan Detrick, CMT (@RyanDetrick) September 22, 2022
Internal memo: Amazon saw the "biggest three hours for US Prime signups ever" in its first exclusive stream of Thursday Night Football (@taylor_soper / GeekWire)https://t.co/vrqo1cry5bhttps://t.co/StS8L6VXXc
— Techmeme (@Techmeme) September 20, 2022
Contact us at email@example.com with any feedback, recommendations, or questions.
Follow us on Facebook, Instagram, and YouTube.
Check out our t-shirts, stickers, coffee mugs, and other swag here.