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washparkhorn

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Everything posted by washparkhorn

  1. The writer is chief economist at UBS Global Wealth Management: In the world’s financial markets, US Federal Reserve chair Jay Powell is increasingly cast in the role of playground bully — looming over the prostrate form of the global economy and chanting “hike, hike, hike” with malicious glee. US policy rates are rising relentlessly. However, Powell’s public remarks offer little insight into how he expects higher rates to tame inflation. The omission matters as the current policy tightening will have an impact through an unusual route. That is because today’s price inflation is more a product of profits than wages. TLDR: Financial Times: “Fed should make clear that rising profit margins are spurring inflation Companies have taken advantage of circumstances to lift prices”
  2. Agree. Just because the employees are "at-will," it doesn't mean no laws are involved. The most important one in a mass layoff is the WARN Act--Worker Adjustment and Retraining Notification Act. In California, if you terminate 50 or more employees in 30 days, you either have to provide 60 days' notice or pay them for 60 days. https://www.inc.com/suzanne-lucas/elon-musk-can-fire-anyone-he-wants-to.html
  3. More jobs created than expected. 261 v. 193. Wages up, but not keeping up with inflation China ending Covid Zero policy rumor has commodities up.
  4. Terminal rate guess - 5.5%. One factor to consider: https://www.thesling.org/the-hidden-cause-of-economy-wide-inflation/ My claim is that platform MFNs are a hidden cause of the current macroeconomic inflation. An economy full of dominant intermediaries, all of whom use MFNs and their non-price equivalents, is an economy primed to turn private unilateral market power into widespread macroeconomic inflation when it comes time for recoupment.
  5. Key moment of the press conference: Reporter: “Chairman Powell- the stock market is moving higher” (it wasn’t at that moment) Powell: ~ “fucking idiots.” Markets accelerate downward.
  6. Yields moving higher as well as the press conference continues.
  7. The Fed promised pain and will not be satisfied until millions are put out of work. This is a Fed created problem with their commitment to the Fed Put (f/k/a the Greenspan Put). The Put was Fed Orthodoxy from 1997 - 2021. Clowns like Larry Summers had no problem with the Fed Put until very recently. tldr: if you cannot spot the sucker at the poker table, you are the sucker.
  8. “Cumulative effects” = things may break warning Dollar drops; equities rise The dreaded Lag
  9. It is a testament to the board and its owner/admins that it has resisted the Q brain rot for the most part. Q brain rot is worse than kudzu.
  10. ISM shows growth and stabilizing prices paid. Stable prices equals inflation slowing. Jolts numbers scaring markets as employment remains strong (Fed wants higher unemployment to stop wage price spiral). The market has been pricing in a pivot (again). Inversion in the 10/3 (key Fed measure) looming, which should signal the Fed to back off intensity of hikes. Small business missing rent payments and consumers relying more on credit cards with high interest rates are evidence of the Fed rate hikes working to destroy demand. Bad news is good news remains in play when it comes to the Fed. Perverse to say the least but reality in this Fed driven economy.
  11. Well done SpaceX. Ignore the noise and focus on the work.
  12. The Fed wants to fight inflation by almost doubling unemployment from 3.5 to 6%. Why? Because that is the primary tool available to it. They have no power to combat one of the primary drivers of inflation: Political pressure will ramp up from the Dems and the Populist Repubs as a result of the yaw demonstrated above. Temporarily, that pressure indicates a weakening dollar and stronger S&P when pricing in the peak Fed Rates on the anticipation the Fed will blink. The Fed is caught in a trap of its own making. tldr: pain and no solution for one of the core drivers of inflation. As the economic uncoupling of the West from China continues, supply chains must shorten and become more resilient. Localization and regionalization will redefine the economies of the West. Great opportunities will emerge as old solutions wither. No CR. We are all in this together.
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