Recession Obsession

[Caseynotes 1,877]

here's another interesting chart, the Copper/Gold ratio and is in a similar vein to the the chart in the post above. Could we be on the verge of the next big rally?

Macro Charts @MacroCharts

Copper/Gold Ratio weekly RSI. All time record low -- one more for the history books. Ratio is correlated with Bond yields, which also plunged to multi-year lows. Could be forming another historic base. Maybe the most contrarian chart ever...

 

[dmedin 416]

Well, that's settled then:

“Now is the time to plan for the next recession – because the one thing we know for certain is that it will happen,” James Smith, Research Director at the Resolution Foundation, said.

https://uk.reuters.com/article/uk-britain-economy-recession/act-now-to-get-ready-for-recession-think-tank-urges-britain-idUKKCN1VT0VC

[Caseynotes 1,877]

'The next recession is coming, that's for certain!' ...  is not actually telling you very much.

Every man and his dog is predicting a recession, imminent, in 6 months, in 12 months, in 18 months, in 24 months. right.
We know this happens every time there's a downturn in the data but there have actually only been two recessions in the last 20 years. But this time it's different - yes well it always is, but what about the debt, well that's been around like forever, as that great 20th century economist Ronald Regan 🙄  said back in the 1980's "the debt's big enough to take care of itself" Boom Boom.
Ah, but the yield curve inversion, guaranteed that is. But does that really work so well now yields have been decreasing for decades and are going negative across the developed markets, even Alan Greenspan last Thursday said he expected the US yields to go negative in the future. Japan has had negative yields for an age, with such tightly packed spreads is an inversion as meaningful as once was? 
 History shows downturns in the data are more likely to lead to a new stock market rally than a recession and especially so when hedge funds are at minimal holding. The last two recessions we didn't really see coming, y2k and the bubble and bust then the sub prime fiasco (bubble and bust) but this time we know what's causing the data to drop, it's Trump trying to get China to play by the rules, it won't but it could end tomorrow.
Keep an open mind, don't swallow garbage wholesale, wait to see what happens, be equally prepared for a new leg up as for a leg down.

[Caseynotes 1,877]

S&P and momentum - value chart showing the current spike down, from these levels the biggest rallies start plus another look at current hedge fund positioning and the suggestion that in the past they have ended up chasing the market rather than being the wise front runners.

Also keeping an eye on the copper chart and a reminder of the copper gold ratio chart posted above on Sept 4th.

'History shows the biggest spikes were last-minute positioning resets that kick-started *massive* global cyclical rallies (2002, 2009, 2016).'

[dmedin 416]

I should really have made my other post here, thanks for reminding us to look at charts instead of being hammered by sh!tty manipulative 'news' stories.

[TrendFollower 656]

@Caseynotes makes a valid point. I do not know if there will be a recession or not but I learnt a long time ago to ignore the ‘market noise’ when trading and try and trade based on the price action. The media can influence traders in the wrong way leading to wrong trading decisions if they are not careful. 

If there is a recession and markets decide to take a tumble then you may end up having more short positions open than long. To be honest if you are comfortable trading both long and short then it really should not matter if there is a recession or not from a trading perspective. 

[Caseynotes 1,877]

oh dear, we printed money to lend to ourself and now how are we going to pay ourself back, er... just a thought but are those presses still handy?

whoa's me, we should never have left the gold standard when printed money was backed by gold, now what's it backed by ??  er, well us actually. Printed money is backed by production, people and infrastructure. There needs to be enough money in the system to keep production going but not so much as to cause excess inflation.

That's how it's always worked, people come up with a creative productive idea and the Govt prints money to pay for it, then collects taxes on it forever after. The gold didn't actually do anything. Ah, but gold kept us honest, well inflation can do that just as well.

Modern Monetary Theory, one step closer, Warren Mosler;

 

[Caseynotes 1,877]

"The word Recession in this business cycle has become synonymous w/ clickbait amongst Media outlets to get ratings & scaremongering amongst AUM hunters in the Hedge Fund Community, who then get terrible returns / lose lot's of $, because they're still living in Macro era 1997-2007"

AntonKreil @AntonKreil

[dmedin 416]

On 07/10/2019 at 11:22, Caseynotes said:

Printed money is backed by production, people and infrastructure.

This is actually a very profound point.  Ultimately, the source of all wealth is human labour and the world around us (and the raw materials it provides).  Everything is made from a combination of those two things

Edited November 5, 2019 by dmedin

[Caseynotes 1,877]

Guess what, recession warnings are coming round again in this new year for the just the 10th time in the last 10 years, wow.

[Caseynotes 1,877]

Yield curve signalling lower recession risk;

[dmedin 416]

'The only thing we have to fear is fear itself!' - well that and huge blazing fires, climate change, and a few other things

 

[Caseynotes 1,877]

5 minutes ago, dmedin said:

'The only thing we have to fear is fear itself!' - well that and huge blazing fires, climate change, and a few other things

 

"In 2019, "820 natural catastrophes caused overall losses of US$ 150bn, which is broadly in line with the inflation-adjusted average of the past 30 years."

https://www.munichre.com/en/company/media-relations/media-information-and-corporate-news/media-information/2020/causing-billions-in-losses-dominate-nat-cat-picture-2019.html

[Caseynotes 1,877]

Recession probabilities coming down for Ger, France, UK and Spain.

[Caseynotes 1,877]

Housing starts booming in the US, today's data and graph;