Macro thread - Why is the market up/down?

[treasurehunt]

1 hour ago, Sweet said:

It some ways it’s bad.  It would be better to be clear and say X department will get a X% cut in staff budget over the next years.  Implement a hiring freeze, offer redundancy.  Allows sections to focus their work and reduce headcount in workable way.  Although I think you need all these sections audited to measure what they claim they need vs what they actually need too.

 

Yes, all of what you say here sounds good and sensible. I don't understand the approach they have actually taken. But I have said my piece on this issue; time to move on to other things.

[Gregmal]

5 hours ago, Sweet said:

It some ways it’s bad.  It would be better to be clear and say X department will get a X% cut in staff budget over the next years.  Implement a hiring freeze, offer redundancy.  Allows sections to focus their work and reduce headcount in workable way.  Although I think you need all these sections audited to measure what they claim they need vs what they actually need too.

 

In other ways firing everyone quickly is good, as you said it cuts the bill sooner, and importantly it doesn’t risk someone else coming in a reversing the plans you set out.

Because every new administration comes in and proverbially rips things up. If you ran a gradual process like that, they’d run out then clock and then next president there’s a good chance they then go hire 80,000 agents. 

[rogermunibond]

[rogermunibond]

[rogermunibond]

Gundlach on CNBC says risk of recession is 50-60% in the next few quarters.

 

Good interview ongoing.

[Gregmal]

Gundlachs been quoted on this board predicting the imminent recession since like 2021....

[ArminvanBuyout]

On the card data - keep in mind that we're lapping Easter slowdown last year, and so is non-comp

[brobro777]

So a little bounce here into the summer and then a hard -20% YTD crack in SPX in the fall? 

 

That would be pretty cool haha

 

[ArminvanBuyout]

19 hours ago, brobro777 said:

So a little bounce here into the summer and then a hard -20% YTD crack in SPX in the fall? 

 

That would be pretty cool haha

 

As a young-ish person with decades left in working, nothing would be better if we just meander around for the next few years

[Paarslaars]

https://www.reuters.com/markets/us/us-consumer-spending-rises-february-core-inflation-firmer-2025-03-28/#:~:text=Consumers' one-year inflation expectations,up from 3.5% in February.

 

Market not happy. Inflation up while consumer strength is down, Powel can't lower rates like this so what is his next move, print even more money?

[Spooky]

4 hours ago, Paarslaars said:

https://www.reuters.com/markets/us/us-consumer-spending-rises-february-core-inflation-firmer-2025-03-28/#:~:text=Consumers' one-year inflation expectations,up from 3.5% in February.

 

Market not happy. Inflation up while consumer strength is down, Powel can't lower rates like this so what is his next move, print even more money?

 

Puts the Fed in a tight box since the US is flirting with stagflation. Real GDP growth has been and is still negative. If push comes to shove and the Fed needs to chose which of its dual mandate to follow my bet is they will fight inflation first at the expense of a recession.

[Kupotea]

On 3/28/2025 at 6:42 PM, Spooky said:

 

Puts the Fed in a tight box since the US is flirting with stagflation. Real GDP growth has been and is still negative. If push comes to shove and the Fed needs to chose which of its dual mandate to follow my bet is they will fight inflation first at the expense of a recession.

Until the new chair gets appointed next May then it’s YCC and money printing for everyone.

[Spooky]

1 hour ago, Kupotea said:

Until the new chair gets appointed next May then it’s YCC and money printing for everyone.

 

Agree, whoever Trump appoints next will definitely be more dovish and less independent. From the last press conference, JPow and the Fed are currently looking through tariff price increases (he was even baited into using the word transitory). It might be the right decision to look through inflation caused by tariffs and ease at the end of the day if they cause a sharp recession. 

[Sweet]

Deficit at 1.5 trillion through the first half of the US governments financial year and expected to be 2.5 ish trillion for the full year - or about 8% of GDP.  All while yields on US borrowings are rising.  They need to get this under control.

[Kupotea]

1 hour ago, Sweet said:

Deficit at 1.5 trillion through the first half of the US governments financial year and expected to be 2.5 ish trillion for the full year - or about 8% of GDP.  All while yields on US borrowings are rising.  They need to get this under control.

They wont, austerity is never politically popular it’s far easier to just print your way out of it. The Supreme Court will remove FED independence by summer and we’ll have some form of yield curve control by the fall. 

[mattee2264]

Yeah that is the way I see it heading. Financial repression is far easier and will be made possible if Trump can get a puppet FED governor. 

[Paarslaars]

It should not happen but if it does, Trump will be printing like a motherfucker... All good for BTC I assume.

[Spekulatius]

15 hours ago, Paarslaars said:

It should not happen but if it does, Trump will be printing like a motherfucker... All good for BTC I assume.

However printing money means a rising deficit which is the opposite of what seems to be the goal hege.  The Fed does not print money, the Treasury does.

 

FWIW, I do think that despite all the austere talk, the deficit this year will be larger than last year, the recession we are looking at alone will make sure of that.

Edited April 12, 2025 by Spekulatius

[gfp]

4 minutes ago, Spekulatius said:

However printing money means a rising deficit which is the opposite of what seems to be the goal hege.  The Fed does not print money, the Treasury does.

 

FWIW, I do think that despite all the austere talk, the deficit this year will be larger than last year, the recession we are looking at alone will make sure of that.

 

I agree with all of that, but if the government runs a big deficit like you predict, we may not have the recession.

[Paarslaars]

2 hours ago, Spekulatius said:

However printing money means a rising deficit which is the opposite of what seems to be the goal hege.  The Fed does not print money, the Treasury does.

 

FWIW, I do think that despite all the austere talk, the deficit this year will be larger than last year, the recession we are looking at alone will make sure of that.

I am not sure about that. During election time they spoke about using BTC to cut the debt in half in 20 years. I think for now he just wants the interest payments on the deficit to be low.

[Blake Hampton]

Every day, I read these articles in the paper talking about “what you should do now that the market is in turmoil.”

 

- Self-reflect

- Talk to a loved one

- Remember the market returns 10% a year

 

Not once do I read them break down market fundamentals—current earnings, average interest expenses, tax rates, historical ROE, or anything that simply reminds people these are businesses. I thought that when everyone puts blind faith in something magically going up, regardless of the fundamentals, that that was a bubble.

 

Edited April 13, 2025 by Blake Hampton

[Blake Hampton]

The bond market almost failed on the 9th, but don’t worry—the market’s up. We’re out of the woods.

[no_free_lunch]

43 minutes ago, Blake Hampton said:

Every day, I read these articles in the paper talking about “what you should do now that the market is in turmoil.”

 

- Self-reflect

- Talk to a loved one

- Remember the m.arket returns 10% a year

 

Not once do I read them break down market fundamentals—current earnings, average interest expenses, tax rates, historical ROE, or anything that simply reminds people these are businesses. I thought that when everyone put blind faith in something magically going up, regardless of the fundamentals, that was a bubble.

I guess the one pro I see is that US stocks are selectively crashing, on a stock by stock basis.  So BRK is barely down while more cyclical stuff is down 30-50%.  At least this makes a bit of sense.

[Spooky]

2 hours ago, Blake Hampton said:

The bond market almost failed on the 9th

Can you elaborate on this? Was there anything in the functioning of the bond market other than yields rising?

[Blake Hampton]

4 minutes ago, Spooky said:

Can you elaborate on this? Was there anything in the functioning of the bond market other than yields rising?

 

There was extreme volatility in the bond market and interest rate derivatives, and it was causing a lot of liquidations. Basis trades blowing up, etc. People were really panicking. It's was essentially the same thing that happened during March of 2020.

 

Read this: America’s financial system came close to the brink - The Economist

 

If you can't read it, subscribe to The Economist; it's certainly one of the best financial publications there is. You're doing yourself a huge disservice if you're not reading it.