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The real rate has finally moved into positive territory after a 500 basis point rise.
Did we just dodge a recession? | The Hill
Audaces fortuna iuvat
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No.
The Hill is looking backwards, not forwards. It’s difficult to see the hazards in front of you when you’re looking exclusively in the rear view mirror.
Yellen screwed the pooch. In 2021 when the Fed opened the floodgates long term interest rates were significantly reduced. The Treasury failed to take advantage of an unusual opportunity to increase the duration of the nations debt obligations. Now over 50% of the outstanding portfolio has to be refinanced over the next 30 months. The appetite for longer durations is drying up. Short term t-bill rates are up from 50 basis to 550 basis points in the last two years. Accordingly debt service costs are going parabolic with no hope of slowing down.
As to the “health” of the consumer, there’s this:
“Another data point: “Costco’s average transaction. Its ticket size fell 3½% in the U.S. and 4.2% globally. The company’s CFO also noted that COST customers are downshifting from more expensive discretionary items into cheaper “essentials”. This reflects a pattern being reported by most retailers, outside of the luxury segment.””
Mick, I think we’re in the first three innings, not the last three innings of this virus initiated economic dislocation…and policy failures out of DC will exacerbate the problems.
Here's a toast with one last pour, may it last forever and a minute more;
Good fortune seems to you have sung, to live and love way past long -
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Just talked with a friend of mine who regularly polls about 400 general counsels at large-scale companies. He says, with almost no exceptions, that they all have directed their law firms to directly address outstanding legal issues — cost be damned. In other words, cost is no object, and the clients are not negotiating fees. They all think the economy is doing well.
Audaces fortuna iuvat
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[quote quote=7293]Mick Jr. has a mid-management position at Nvidia…he’s fairly optimistic about the economy.[/quote]
Hopefully they have a generous option plan for mid managers and that Mick Jr. is fully vested. 😉
Here's a toast with one last pour, may it last forever and a minute more;
Good fortune seems to you have sung, to live and love way past long -
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https://twitter.com/WallStreetSilv/status/1664267119301738497
Well, there’s always a revision.
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