Timeless

[Timeless @ceothree]

@edzitron @nsharp713 @kakashiii111 @DarioCpx Stockpiling ahead of Taiwan invasion. I suspect this whole semi fiasco has been deliberately engineered.

[Timeless @ceothree]

@Sleepysolcap How is TSLA a defensive consumer disc name??

[Uncle Milty’s Ghost @his_eminence_j]

I’ve said for a while that this would not be some sort of mythical interest rate-driven recession or a market pullback that results in recession. None of those things ever really happen.

This is going to be a demand destruction recession.

And that’s why it will be so insidious.

We’re not dealing with a few bank failures, causing a liquidity crisis (at least not yet). We’re dealing with a consumer that is tapped out and falling behind on areas of basic living.

And the assets that most consumers have, that have inflated in value over the last few years (mainly their house and their 401k), are not accessible. They’re not liquid. They’re paper gains only, which will evaporate as both the housing and equity bubbles pop.

Today’s restaurant report places the industry deep, deep into the worst parts of the Great Recession, and we are just getting started. Entire retail chains that rely on low- and middle-income consumers are filing for bankruptcy. Layoffs are way up. Car prices are dropping and loan and credit card delinquency rates are spiking.

The mortgage/real estate industry is already devastated, with so many agents leaving the business over the last year that we’re back to levels not seen since housing bottomed in 2014. CRE continues to crash. And housing starts and new permit pulls are at multi-decade lows. Office vacancy rates in most major cities are above 25%.

General unemployment has made the letter “J“ on the graph that is required before each recession, and the Sahm rule triggered weeks ago.

I don’t write all of this to doom and gloom, and before some idiot starts accusing me of being a bear, I’m not that either.

I’m a realist. I want people to understand the economic reality because the market is violently detached from it and the pullback could be something more like 40-50% than the 20–30% I originally thought.

I really thought the pullback in August was the market coming to its senses. It has not.

A rate drop this week will endure the same lag effect that a rate increase has. That means that the economy, already racing into a recessionary brick wall, will continue its forward momentum.

They couldn’t drop rates enough this week to avoid it, because they can’t avoid the lag effect.

And with core and super core CPI stuck at about 3.5% for months now, I firmly believe this pivot is still too soon and we will see an increase in inflation going into 2025. Only a very hard landing will finish inflation when rates are below neutral and QE has resumed.

Protect what you’ve worked so hard for , it’s your future that you invest for.

Things will get better, but we must endure what’s coming and stop deluding ourselves that we can keep walking between the economic raindrops and not get wet.

The only way out of this now, is through it. There’s no way the Fed will be able to avoid it.

Just be smarter than the average guy on Twitter. It’s your life’s work at stake. 🙏

[Timeless @ceothree]

@50ptMAE Do you do anything to mitigate the volatility decay of those OTM calls? No calendar spreads, even with elevated VIX?

[zerohedge @zerohedge]

On Wednesday, the Bureau of Labor Statistics will downward revise jobs for the April 2023-March 2024 period by up to 1 million. This means that all "beats" recorded in the past year will have been misses and the US job market is in far worse shape than the admin would admit.

[Capital Misallocation @BenBrey]

In late stage Carry Regime, it’s all one trade - winning side or losing side are simply symmetric.

QQQ - you look like the “outside cat” what you doing out there buddy?

[Nobody Special @JG_Nuke]

The Party told you to reject the evidence of your eyes and ears. It was their final, most essential command.

[50ptMAE @50ptMAE]

#BoJ and Ueda have been masterful. Contrary to popular belief these guys have been navigating the current economic conditions perfectly.

You must remember they are dealt with an impossible task. People in Japan just aren't having enough babies. This has resulted in a sickly economy comprised of all older people and very low productivity.

Consequently they must stimulate endlessly via monetary policy. This lead to decades of ZIRP and ever since the 2022 inflation super cycle post wide that has blown out yield spreads (US t-bills yielding 4.5%+, which is 4.5% more than Japan charges to borrow).

This has lead to $USDJPY to go no-offer for literally years. Who is willing to short USDJPY when you are losing 4.5% just to hold the position and knowing you are going against MASSIVE momentum? Almost nobody.

So a historic amount of yen shorts built up, comprised equally of real money long USDJPY and now a huge amount of speculators, moms guys, CTA trend followers.

BoJ knows their currency is on a death spiral, least they can do is slow the descent, which is wipe out Specs.

They know they can hike, but their economy/stock market can't stand it. There is also political pressure to hike as Japan is seeing nascent signs of inflation and the weak Yen is heavily felt by the consumer. They know they can't really hike, because the economy is too weak, but they are also facing political pressure from the government to "do something" about inflation.

They decided to hike once and signal Uber-hawkishly. This crashed the Nikkei of course and global markets to an extent.

I believe they knew this was going to happen but did this anyways because it accomplished two things.

1. It completely wiped out the USDJPY longs, stopping the currency death spiral, taking it back 20 big figures. It also greatly deters any future yen spec shorts for the foreseeable future.
2. They cover their own ass. Ueda can call the PM and say, "hey obviously we can't hike, look at the Nikkei last time we tried". They are absolved of their responsibility.

There is no winning for them. There is no monetary policy solution to Japanese people not having enough babies. That is a much bigger problem with no apparent solution. All they are tasked with is slowing the descent of their currency, and fighting off inflation as best as they can before the inevitable arises or the next guy has to deal with it.

Moving forward, if inflation continues to persist, their best chance to hike again will likely be when the whole global market falls into a down cycle as they won't be blamed or held responsible for the downturn as its already happening everywhere.

I see alot of hubris on this website, Ueda has a PhD from MiT. He's a hell of a lot smarter than you or I and anyone who believe otherwise is just delusional. These guys know EXACTLY what they are doing before they do it and almost everything they do is fully intentional. The fin twitters who have $1,000 robin hood accounts working part time at 7-11 calling Central bankers naive or foolish is pure comedy. Hubris at its finest.

$SPY $SPX $QQQ

[Joe Weisenthal @TheStalwart]

Even with the selloff, $NVDA has added $1.4 trillion in market cap over the last year.

Meanwhile, Bitcoin's total market cap $1 trillion.

So in other words, Nvidia has created more wealth for investors in just one year than Bitcoin has in 15 years.

[Quartr @Quartr_App]

Peter Lynch's Cocktail Party Theory

What stage are we in now?

[Nikola @tesla_trading97]

@bellsedge @tradermatt @Trader_Dante

[Timeless @ceothree]

@BickerinBrattle Blown away. Thanks for sharing. There’s something profound here that’s paradigm changing for me.

[Walter Deemer @WalterDeemer]

"Sell in May
And go away"
Is not supposed
To work this way

[Wait Capital @WaitCapital]

I suppose the war for elite talent (and stock option comp) is also a factor causing the big tech firms to focus so hard on financial engineering. And obviously MGMT comp.

[Swordfish @Swordfishv44183]

I recall thinking recently 'NDQ/SPX is down YTD, if this is a bull market tech should lead, I ought to long NDQ'

But perhaps this is finally the Mag7s/NDQ's TSLA/SOX moment of inching underperformance before a significant drawdown. At which point one who'd held the relative strength mindset would exclaim, 'It underperformed and acted poor in an environment where it should have done the opposite; wasn't it obvious?'

I imagine if this is the case we'll have more time to observe and confirm before anything happens. In TSLA's case there were months of unmet highs before the real move.

[Timeless @ceothree]

@Lee_Lichterman I believe it was the EOM options pinning that held things up, around 5100

[Timeless @ceothree]

@TheRealOutlaw1 @Matt_Bryant_ @eminiplayer What do you mean by 1st test? First exhaustive move?

[Ben Calusinski @BCalusinski]

If you don't wait for a setup to come to you, then you are no different from a gambler

Patience > Precipitance

[Timeless @ceothree]

@StinkBugBag @TOzgokmen Those numbers are not necessarily reflections of reality. The hotter prints may be lies to keep the USD bid, to maintain pressure on everyone es-USA