Warning: monster rally into october

1. It actually is different this time. Wage growth is up 3.8% which does not match a rising UE narrative. If the labor market does cool, but remains robust, recession can be postponed for months until the back of the consumer breaks. Keep in mind the labor market is just now reaching the normalcy of pre pandemic. That's it.

Market always dumps after rate cuts start.

do you consider a 2 week rally after FOMC and then a crash, a "dump"...? There is no reason for markets to be spooked with a 25 cut. In previous instances (the vast majority) cuts predicate declines because it means the economy is weak. Cuts themselves aren't what causes the decline, its the economy.

but i tought past performances weren't an indication of future performances
are they? or are they not? you can't have both

Unemployment is treading upwards which always means it'll only continue to go up until the FED starts slashing rates massively. Even then it will take at least a year before the labour market can absorb the recovery. In mid 2001 the unemployment rate was just 4.2% however it jumped to 6% the following year and stayed there until 2004 and that was after the FED cut rates to near zero.

yeah I know, but the thing is that people dont get that covid fucked so many things up in the economy, that simply expecting the rate of change of UE to go up is a trap

it took us 2 years of 5+ rates to even get an inkling of slowing. Mind you, the federal government is still deficit spending as if we WERE in a recession, which is a huge cushion. Additionally, the key problem with UE is not cyclical, but structural. There aren't enough workers. If trump severely cuts immigration I dont see how UE will go up while wage growth accelerates. All signs point to STRUCTURAL higher inflation, not deflation like people are expecting.

What do I do with information as a humble DCA midwit?

except that's bullshit because UNRATE doesn't count people who straight up stopped looking for jobs and last year's jobs number got a -800 000 revision number.

2008 recession was declared by NBER in dec 2008, bottom was march 2009. they backdated the start of the recession to dec 2007. if you're always waiting for confirmation from the mainstream you're always late and getting maybe 30 - 50% chop on portfolio value. which took about 10 - 15 years to regain in nominal terms.

the only things that really matters is UNRATE. the fed rate is always lagging that's why UNRATE always peaks well after cuts start.

people acting like a rate cut means a 30% drop in 1 month. if the entire economy is truly in a recession it means a 30 - 50% drop over about 2 years. this shit doesn't happen overnight. we are not talking about flash crash scenarios.

I bet they rig the election for Kamala, tax the unrealized gains/bail ins, then then raise rates to crush/control what remains.

If there's a 50% correction while over 1/4 of the taxes go towards interest in national debt in a bull market they're going to be screwed.

Honestly appreciate the analysis but I'm so spooked I don't think they can pull it off.
Even OP is talking about more immigrants lol it's so cooked.

i bet you the only reason rates haven't been cut yet because biden was in office and a cut means a failure of democrat policies.

the FED is captive and acts on political pressures. everybody knows a rate cut is admission of a weak economy.

if we want to be sinister, trump will win and the FED will cut, things will go to shit as expected. and people will remember that the economy crashed under republican administration.

SAHM rule is always triggered AFTER a rate cut. never before. this time they're late. we are already in a recession.

Nope they know a great depression is on the way so as soon as asset values started to decline they increased the demand by allowing millions of people to flood into everyone's respective countries.

Every single country associated with the west just RANDOMLY decided to go crazy with immigration. They are even subsidizing them to the max to make sure they can be a market participant and contribute to the demand. They're being controlled by the banks.

If they didn't bring more people into the country, assets would have lost 50% of their value and banks would have defaulted on their bad loans. By increasing the demand, landlords were able to rent at top dollar to cover the cost of their mortgages - which is being subsidized by the citizens through social assistance!! We're basically bailing out the idiots who got over leveraged when interest rates went to zero

O.P what say you the chances of a 25bps cut vs 50bps cut vs no cut?

and if there's a monster rally into October preceding a big correction, what do you make of the chances for btc to break its ath in the next 3 weeks?

and, if you're about and because you've made a good thread, how much and how long of a correction are you expecting, especially with regards crypto. Are you saying market reversal and it turns bearish for the next 24 months and there's no post halvening bull cycle?

Literally everything costs too much to not crash spectacularly. CPI prices in consumer "shit", not any actual core expenses. If you want a vacuum, you can steal one because they are sitting one fuckton of them because no one has any money. Meanwhile, gas and groceries are through the fucking roof. I'll give an anecdote

Be me, commercial roofing contractor

Based out of Colorado Springs, but I'm working in Indianapolis

Our pricing is normally vastly different, i.e. Denver area is usually 10% lower than Indianapolis

CAN NEVER GET BEACON LOCAL TO MATCH DENVER DAN'S PRICING USUALLY

Call Beacon today about more shit on a 700k job

They give me my standard pricing (which is excellent for my pricing region)

As soon as I mention I'll just buy if from Beacon Denver, they offer to beat it IMMEDIATELY

Mfw I bought a 100k worth of shit for 80k

This literally never happens. They aren't moving materials. AT ALL, and I buy Carlisle Syntec exclusively. I do 3+ million of dollars in business a year, of which 35% is material expenses. Huge red flag, especially given the level of development money the state is spreading around Indy. I could provide other anecdotes about spec bids being revised drastically down or being cancelled altogether, but you get the picture. No one has any money

Disinflation has been mistaken for recession by market participants. Yields have declined so much because of commodity deflation, not necessarily growth scares.

This is a bold claim, I need sauce on this. What about oil prices.

OP is fucking retarded. We will crash this month

I agree with you, that it is going to be a 25bps cut
However.. a key however.. is that although it's going to be a 25bps cut, although this is what the market expects the Fed to do, this is NOT want the market WANTS the Fed to do
The market believes that we are going into a recession, that there is extremely alarming data prints, from PMI, ISM, new orders, beige book, job revisions, delinquencies, revolving credit, commercial real estate, you name it..
The market WANTS a 50bps cut, to prevent the recession, that the Fed is behind the curve, and if the Fed cuts by 25bps, they are already too late, and this will make them even MORE too late, where a hard landing becomes a certainty
I agree that historically we do see strength in October for crypto
and I do agree that the popular consensus expectation is that we have weak September, into a very strong November / December and potentially even break a new all time high in SPX
However.. as the negative economic data keeps piling up, and the Fed cuts by 25bps, the market will have a shit fit, that it is too late, too little
I do agree with you that huge hedges will come off, and that these flows are supportive to markets
However.. there's a reason why September 23-30 is the weakest week of the year
In my opinion, the hedges coming off is what will finally remove the put walls, finally stop volatility from being suppressed

Yields have only declined so much because of commodity deflation

Tell me anon.. why do you think commodity prices are completely shitting the bed?
Because the demand is not there.. it's not there in China, it's not there in EU, it's not there in USA..
Commodities shitting the bed across the board is indicative of the recession..

The only intelligent person in this thread
Sad!
The carry trade is also not over

You guys are alright, here's the secret.

so what you're saying is at the first sign of trouble they'll print, like during the bankruns in 22?

Net capital gains + taxable IRA distributions are ~200% of consumer spending growth

Wat
That's just not true.. not even close - it's like 10%
Wages account for 70% of consumer spending growth

bump

so how does this affect me as a humble CIA agent on the interwebz?

tax the unrealized gains

I don't think the Federal government can legally do that and I doubt congress would actually pass it

The market WANTS a 50bps cut

I've heart the market wants 50bps but 50bps signals a weak economy so the argument is 25 or 50bps it doesn't matter, someone is going to panic

The correlation is only 0.3, 0.8 was the 2022 peak

Market always dumps after rate cuts start

and in every thread someone said this particular piece of stupidity there is someone there to tell you no
look at the graph and it clearly shows that no rate cuts dont always precede market crashes unless they are big emergency cuts
yet for some reason anons here flatout refuse to look at the data and repeat some twatter KOL bearish take

kek baggies

Mmmm
It's not so clear cut..
Immediate reaction is usually to the downside
However.. when you start going further out then you can see strength
will link another picture after this that shows the dynamic well, entirely depends on recession vs no recession

I thought the yield crossed 2 weeks ago?

pic related

We just need to figure out if which we are in..
Based upon all the economic data thus far.. it seems more likely we're in the recession cycle, but not impossible (yet) to achieve soft landing

Yes, it's an older pic but the point still stands.

Americans can't afford groceries you normie keynesian fuck.

The fucked up thing is that migrants are skewing data points enough for this to partially not matter. I still think we crash this month

the key emphasis is on the always
its what you hear them say every time, indicating they dont look at the graphs themselves but repeat talking points they heard but dont understand from someone else
as if the cuts themselves create the dump/recession lol

as i have said in numerous threads imagine selling there on rate cut fears, you would turn a shade of pink yet undiscovered as at the pico bottom of 2 market wipeouts you'd never even buy back in close to your sell point