New Low Observer

Dow Theory, Price, & Research Specialists.

We're touching the financial & economic third rail, so you don't have to.

皆さんがそうしなくてもいいように、私たちは金融と経済の第三レールに触れています。

[New Low Observer @NewLowObserver]

How is it possible to exert yield curve "control" in the environment that we're living through but was outlined to perfection in 1984?

1985-2030 rate projection in red.

[New Low Observer @NewLowObserver]

"By driving oil prices down, he knew that would set long term inflation expectations lower."

A trend in motion tells us that Bessent had nothing to do with the decline in price that followed 3-3-3.

Especially when the price had fallen from $123 to $74, or -39.86%.

[Radigan Carter @radigancarter]

Secretary Bessent is keenly aware that oil prices is one of the number 1 drivers of long term inflation expectations. Why adding 3 mbpd domestic oil supply was a pillar of his 3-3-3 plan in 2024.

By driving oil prices down, he knew that would set long term inflation expectations lower, allowing interest rates to be lowered to hopefully get 3% GDP growth.

Prices are starting to reflect the reality on the ground, which is the exact opposite of what administration wanted so could lower interest rates.

Higher oil prices mean higher long term inflation expectations, higher rates to compensate savers for inflation, which leads to lower growth.

The exact opposite of what is wanted, so I'm betting inflation will be used to make up for lower real growth so nominal GDP still looks good.

[New Low Observer @NewLowObserver]

@DariusDale42 Dalio at the beginning of a secular bull market.

October 1982: Depression is Coming

Has been feeding on fear for a long time now. He constantly couches that with having the solution. An unfortunate business model that creates the miserable 90% we have today.

[New Low Observer @NewLowObserver]

@LoganMohtashami 🤣

[New Low Observer @NewLowObserver]

The Art & Collectibles market might indicate excessiveness and extremes during a secular declining rate trend in the market.

However, in a secular rising rate trend, one we are entering, Art represents savvy buyers adjusting for coming inflation.

Thanks to @BrianFeroldi

[New Low Observer @NewLowObserver]

"Even most ardent Gold bulls will need to admit that Gold was wildly overvalued vs USD in 1980."

"When gold was $850 it was overvalued and on the covers of Time and Newsweek."

Don't have gold bulls like that anymore.

Thanks to @jaganmsna & @BrianFeroldi

The call on bonds 😳

[New Low Observer @NewLowObserver]

More on Nob Hill:

A gold rush town never remains the same. Historically, it becomes a ghost town. To survive in spite of the history of mining boom towns is a testament to the people and the likely future of The City.

[New Low Observer @NewLowObserver]

Shiller CAPE ratio, Case/Shiller index, and this. 😉

[New Low Observer @NewLowObserver]

"The Fed Has Trained Bond Traders Not to Push Yields Up".

Remember when it was thought that the Fed could keep rates down at the beginning of the Pandemic? 🤣

The Fed doesn't matter.

[New Low Observer @NewLowObserver]

"The stock market has never been this disconnected from the economy."

3 years ago, the market had the widest disconnect from the market.

The market boomed and the economy followed.

The history of plagues and pandemics.

Thanks to @jessefelder & @SoberLook

[New Low Observer @NewLowObserver]

"...ZERO comfort to people who have only known (and can only afford) a world of ZIRP"

Charles Dow predicted this reaction.

"Interest has been so low for so long a time that to many people a rising rate produces a sort of alarm..."

Thanks to @spomboy & @SheilaBair2013

[New Low Observer @NewLowObserver]

1980-2020: CEO/Consumer Confidence, YoY

End of recession.

Pretty good indicator from @VrntPerception

[New Low Observer @NewLowObserver]

State sponsored deflation or devaluation (in green) doesn't end well as noted in the 1929 example for the U.S., the 1989 example for Japan, and apparently in the Chinese example more recently.

[New Low Observer @NewLowObserver]

If Volcker broke the S&Ls then he did it not knowing their financial condition and then bailed them out AFTER realizing the risk, ultimately creating the infinite safety net, or too big to fail.
https://t.co/H3dX4vvfjs

[New Low Observer @NewLowObserver]

Former Harvard president outraged that "American human capital" has fallen in value. 😳
https://t.co/Ipf0dyOdT7

[New Low Observer @NewLowObserver]

The money is leaving China and has been actively bailing for a while.

https://t.co/RcEyi6Cs1W

[New Low Observer @NewLowObserver]

Second largest economy takes down the global economy? Sound familiar?

https://t.co/HNkyGCuHhf

[New Low Observer @NewLowObserver]

Why do central banks hoard gold?

[New Low Observer @NewLowObserver]

@zerohedge Volcker gets a participation prize for showing up (peak in interest rates) but he wasn't instrumental in the end to rising rates or the subsequent decline in rates.
https://t.co/6gZcwV1PFb

[New Low Observer @NewLowObserver]

October 1941: Monthly Military Expenses

[New Low Observer @NewLowObserver]

1929-1941: Machine Tool Production