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@GlobalMktObserv
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Did you know investment banks such as JPMorgan, Bank of America, or Goldman Sachs charge even $500,000 a year for their premium research?
Below you can access market data and analysis utilizing experience from working on Wall Street for <$15 a month. 👇
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THIS HAS NEVER BEEN SEEN BEFORE:
3-month correlation between S&P 500 returns and the number of S&P 500 stocks advancing dropped to the LOWEST on record.
It means that the number of stocks driving gains is the smallest EVER.
Notably, 40% of S&P 500 stocks are down year-to-date.
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2K
RECESSION WARNING:
US Leading Economic Index® (LEI) is down 14.7% from this economic cycle peak.
In the last 65 years, such a drop happened only during recessions.
Index takes into account, US labor market data, manufacturing sector data, building permits, S&P 500 and bonds.
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US BANKRUPTCIES HIT THE HIGHEST LEVEL 14 YEARS:
There have been 346 bankruptcy filings in the US, year-to-date, the most since 2010.
SHOCKINGLY, in June alone there were 75 bankruptcies, higher than every single month during the COVID crisis.
Hard landing is now a base case.
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1K
THIS IS TRULY REMARKABLE:
US household allocation to stocks hit 57% of total, near the highest level EVER RECORDED.
The percentage has more than DOUBLED in ~15 years.
This is now also in line with the 2000 Dot-Com Bubble peak.
US households are all-in stocks.
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INSANITY IS AN UNDERSTATEMENT:
Weight of the top 10 stocks in the S&P 500 has spiked to ~34%, the most in the entire history.
At the same time the weight of the LARGEST stock of the S&P 500 relative to the 75th percentile stock is 770x!
This is even higher than in the 1920s.
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1K
RECESSION IN THE US USUALLY COMES WITHIN 18 MONTHS FROM THE LAST FED RATE HIKE:
It has been now 12 months since the last Fed hike in July 2023.
If history is any guide, the US economy should fall into a recession before the end of 2024 or is already in.
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US RECESSION ALERT:
Sahm Rule is an indicator, signaling when the US economy is in a recession.
If 3-month moving average of the unemployment rate rises by 0.50 percentage points or more, relative to its low in last 12 months it suggests the US is in a recession
It is now 0.43
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933
GAME OVER:
On Wednesday, the US Bureau of Labor Statistics will revise DOWN JOB numbers for the April 2023- March 2024 period by up to 1,000,000.
It means that in these 12 months, the US created 1.6 million jobs instead of the initially reported 2.6 million.
THIS IS INSANE
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HOW BIG IS THE YEN CARRY TRADE?
-$20 trillion, or 505% of Japanese GDP, using its government balance sheet, according to Deutsche bank
- $3.4 trillion (487T yen) based on Japanese investors’ net international investment
- $1 trillion using Japanese banks’ foreign lending data
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THIS IS INSANE:
Call options volume in Russell 2000 ETF of small-cap stocks spiked to the highest EVER,
This comes after the index rallied by a HUGE 3.8% on Thursday.
Everybody is pilling into small-caps as the US economy is rapidly slowing.
What could possibly go wrong?
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US STOCK MARKET WARNING:
NASDAQ index is now the most overbought since February 2018 when Volmaggedon happened.
The RSI is even higher than before the 2020 COVID crash.
This comes after the US tech stocks index has rallied by 19% year-to-date.
Is this a time for correction?
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IT'S OVER:
$2.1 trillion of excess savings have been spent in 3 years.
As a result, cumulative excess savings are now NEGATIVE $170 billion.
At the same time, SERIOUS delinquencies of 90+ days for credit card debt spiked to 10.7%, the highest in 12 years.
Consumers struggle.
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@profstonge
THIS IS INSANE:
14 of the last 15 months of job (non-farm payroll) numbers have been revised downward.
April and May was REVISED DOWN by 111,000.
When excluding government jobs, 11 out of 12 months in 2023 were revised lower, the most since 2008.👇
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GAME OVER:
US ISM services PMI plummeted to 48.8 from 53.8, lowest level since the COVID CRISIS.
US manufacturing contracted in the last 19 out of 20 months, longest streak since the Great Financial Crisis.
In the past, both industries contracting occurred only in recessions.
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🚨RECESSION ALARM🚨
The number of states with higher unemployment rose to the highest level since the GREAT FINANCIAL CRISIS.
In the past, whenever unemployment spiked in such a large number of states, the nationwide jobless rate rise followed.
More creative destruction coming
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404
US NON-FARM PAYROLLS HAVE BEEN REVISED DOWN BY A WHOPPING 818,000
THIS IS FOR THE 12 MONTH PERIOD THROUGH MARCH 2024
This revision is the largest since 2009, the last year of the Great Financial Crisis
Truly insane.
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@profstonge
US DEBT CRISIS IS WILDLY ACCELERATING:
In the last 4 years, the US debt has skyrocketed by $11 trillion.
This is the size of 40% of the US economy’s GDP.
By comparison, reaching the first $11 trillion of debt for the US it took 220 years
Read👇
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THIS IS INSANE:
Bank of Japan owns ~80% of the country's ETFs and 7% of the entire Japanese stock market, according to Morningstar and the Tokyo Stock Exchange data.
Moreover, the BoJ holds ~55% of the Japanese government bonds.
Huge distortions 👇
11
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326
🚨ANOTHER US RECESSION SIGNAL🚨
The difference between the share of consumer confidence survey respondents saying jobs are plentiful and hard to get declined to 16.4%, the most since the COVID CRISIS.
It implies that the US unemployment rate could jump to at least 5.5% soon.
4
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THE MARKET IS PRICING A RECESSION IN THE US:
Markets are now expecting 2.00% or 8 rate cuts within the next 12 months, the most since the GREAT FINANCIAL CRISIS.
Over the last 60 years, each time the market was seeing at least 2% rate reductions a recession in the US followed.
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@KobeissiLetter
THIS IS WHY YOU SHOULD NEVER FOLLOW MAINSTREAM MEDIA NARRATIVES:
The Russell 2000 index is falling by 4.5% today after dropping by 3.0% on Thursday.
IT HAS ERASED ALMOST ENTIRE JULY GAIN IN JUST 2 DAYS
One of the biggest market traps ever.
Truly incredible.
12
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@KobeissiLetter
US ECONOMY NOW HAS:
1) 39 MONTHS OF CORE CPI INFLATION AT 3% OR ABOVE
2) Jobs OVERSTATED in 2023 by 1,000,000!
3) 346 LARGE bankruptcies in 2024, the most in 14 years
4) $2.1tn excess savings gone in 3 years
5) $35.1 TRILLION NATIONAL DEBT - record
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@KobeissiLetter
US labor market is only strong in the headlines.
In May, US full-time jobs DECLINED by 600K million while part-time jobs ROSE by 300K.
In the past, such a divergence has only happened during recessions.
👇
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US BANKRUPTCIES HAVE BEEN RISING AT THE FASTEST PACE SINCE THE GREAT FINANCIAL CRISIS:
New bankruptcy cases soared to 6,276 in Q2 2024, the highest level since Q2 2017.
Chapter 11 filings hit 2,462, the MOST SINCE 13 YEARS
Chapter 7 cases (liquidation bankruptcy) reached 3,151
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@KobeissiLetter
The US labor market is only strong in the headlines.
13 of the last 14 months of job (non-farm payroll) numbers have been revised downward.
Also, when excluding government jobs, 11 out of 12 months in 2023 were revised lower, the most since 2008.
More👇
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@KobeissiLetter
How dangerous the US debt crisis has become?
In the last 4 years, the US debt has skyrocketed by a $11 trillion.
This is the size of 40% of the US economy’s GDP.
By comparison, to reach the first $11 trillion of debt for the US it took 220 years👇
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@KobeissiLetter
The US debt-to-GDP ratio stands at 123.7%, near the all-time record of 126.2% reached in 2020
It is estimated by the Congressional Budget Office that in 2034 it will reach 130.6%
Since 1800, 51 out of 52 countries with a ratio above 130% have defaulted
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WHY IS WARREN BUFFETT PILING INTO CASH AS IF THERE IS A RECESSION?
Berkshire Hathaway cash & cash equivalents as $ of total assets skyrocketed to 25.0% in Q2 2024, above the Q2 2005 high of 24.5%.
The company's cash rose by $88 billion, or 46.5% in Q2 to a RECORD $277 billion.
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@KobeissiLetter
US ECONOMY IS MARCHING TOWARDS A RECESSION
US job (non-farm payroll) numbers were overstated in Q3 and Q4 2023 by nearly 1,000,000!
The US economy LOST 192K jobs in Q3 2023 and created 344K jobs in Q4 2023 instead of +494K and +637K initially reported👇
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"IT'S A RECESSION WHEN YOUR NEIGHBOR LOSES HIS JOB
IT'S A DEPRESSION WHEN YOU LOSE YOURS"
% of Americans who believe will lose a job in the next 4 months jumped to 4.4%, THE HIGHEST ON RECORD
This is up from 2.8% in March - the Fed survey.
Labor market is weakening sharply.
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🚨US LABOR MARKET IS CONTRACTING:
Leading employment indicators from regional Fed SERVICES surveys fell to negative in Aug for the 1st time since the COVID crisis.
They are highly correlated with the national ISM Services survey implying more weakness for the job market ahead.
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@biancoresearch
Same as with Jobs
In March, US full-time jobs DECLINED by 1.4 million or by 1% year over year while part-time jobs ROSE by 1.9 million or 7% y/y
In the past, such a divergence between full-time and part-time job growth has only happened during recessions
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THIS IS ABSOLUTELY INSANE:
Bank of Japan owns 53% of the national bond market!
These government bonds are worth a WHOPPING ¥585 trillion or $3.64 trillion.
This is higher than the value of ALL world economies except the largest 3.
It will never be fully unwind.
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US GOVERNMENT SPENDS MONEY AS IF THERE IS A CRISIS:
US government spending as a % of GDP is now ~43%, in line with THE GREAT FINANCIAL CRISIS.
This is just 1 % below World War II levels.
Only the COVID crisis saw higher expenditures as a share of GDP of 54%.
Unbelievable
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🚨US CONSUMER CONFIDENCE IS SIGNALLING A RECESSION🚨
The share of Consumer Confidence respondents saying jobs are plentiful fell to 32.8%, lowest since the COVID CRISIS.
This gauge has declined for over 3 years now and in the past, such drop always coincided with a recession.
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THIS IS ABSOLUTELY INSANE:
The Japanese Government gross size of its balance sheet is $20 trillion or 505% of Japanese GDP!
In other words, Japan's government is engaged in a GIANT $20 trillion "carry trade" - the funding of loans and foreign assets by borrowing low-cost yen.
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@KobeissiLetter
There are 33 million small businesses in the US accounting for 44% of the total GDP.
They employ 61.7M people, 46.4% share of the private sector.
From 1995 to 2021, small businesses created 17.3M NET NEW jobs, or 63% of net jobs created.
They are, indeed, key for the economy
4
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181
@SoberLook
How dangerous the US debt crisis has become?
In the last 4 years, the US debt has skyrocketed by $11 trillion.
This is the size of 40% of the US economy’s GDP.
By comparison, reaching the first $11 trillion of debt for the US it took 220 years
Read👇
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180
NOTHING STOPS THIS TRAIN:
US Federal debt just hit $35.1 TRILLION, another all-time high
Over the last 4 years, it has skyrocketed by $13 trillion.
As a % of GDP, it is now a WHOPPING 123%.
Kicking the can down the road at its best.
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US ECONOMY NOW HAS:
1) 39 MONTHS OF CORE CPI INFLATION AT 3% OR ABOVE
2) Jobs OVERSTATED in 2023 by 1,000,000!
3) 346 LARGE bankruptcies in 2024, the most in 14 years
4) $2.1tn excess savings gone in 3 years
5) $35.1 TRILLION NATIONAL DEBT - record👇
11
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PREVIOUSLY THIS HAPPENED ONLY DURING THE GREAT RECESSION:
Serious (90+ days) auto loan delinquency rate jumped to 2.9% in Q2 2024, the highest level since 2010.
Serious auto loan delinquencies are higher than in 2001 recession and the 2020 COVID Crisis.
How is the consumer?
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178
@profstonge
US JOB MARKET IS ONLY STRONG IN THE MEDIA HEADLINES:
US economy LOST 192,000 jobs in Q3 2023.
In last 30 years, such a drop happened only in RECESSIONS
Meanwhile, non-farm payrolls were likely OVERSTATED in 2023 by 730,000 jobs, according to Bloomberg👇
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173
THERE WE GO:
US unemployment rate rose to 4.1% in June, from 4.0% in May, above estimates of 4.0%.
June jobs numbers up +206k vs. +190k estimated.
April and May REVISED DOWN by a total of 111,000.
Full-time jobs DROPPED by 1.6 million in a year.
RECESSION IS HERE
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IS US INFLATION GOING TO MAKE A COMEBACK?
Global container shipping rates have skyrocketed by 300% year-over-year over the last few weeks.
In 2021, when such a spike occurred, US Producer inflation PPI rose by 17% year-over-year 6-9 months after
Will the history repeat itself?
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@KobeissiLetter
The labor market is only strong in the headlines
13 of the last 14 months of job numbers have been revised downward.
Also, when excluding government jobs, 11 out of 12 months in 2023 were revised lower, the most since 2008.
5
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@zerohedge
The US debt-to-GDP ratio stands at 123.7%, near the all-time record of 126.2% reached in 2020
It is estimated by the Congressional Budget Office that in 2034 it will reach 130.6%.
Since 1800, 51 out of 52 countries with a ratio above 130% have defaulted
10
54
160
GLOBAL CENTRAL BANKS HAVE NEVER BEEN BUYING SO MUCH GOLD, NOT EVEN CLOSE:
Net central bank gold purchases exceeded 1,000 tonnes in both 2022 and 2023, the most annual purchases ever recorded.
Central banks have been buying gold for the last 14 years STRAIGHT driven by China.
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162
US ECONOMY HAS:
1) 1 MILLION full-time jobs lost in a year
2) ALL JOBS REVISED DOWN BY 818K for the 12 months through March 2024
3) 392 BIG bankruptcies in 2024, 2nd most in 14 years
4) $2.1tn excess savings gone in 3 years
5) $35.2T DEBT - record👇
8
65
161
THIS IS INSANE:
15 of the last 16 months of job (non-farm payroll) numbers have been revised downward.
April, May and June were REVISED DOWN by 150,000.
Excluding government jobs, 11 out of 12 months in 2023 were revised lower, the most since 2008.👇
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156
US CREDIT CARD SERIOUS DELINQUENCIES RISING AT THE FASTEST PACE SINCE THE GREAT FINANCIAL CRISIS.
US consumer serious delinquency rates (90+ days) in credit card debt have risen to 10.9%, the highest since 2011.
Previously, such a rapid surge occurred in 2009, during the crisis
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162
US BANKRUPTCIES HAVE HIT THE HIGHEST LEVEL SINCE THE COVID CRISIS:
There have been 392 bankruptcy filings in the US year-to-date, the 2nd highest number since 2010.
In July, there were 50 bankruptcies, down from 72 in June.
US companies are going under as if there is a crisis.
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@KobeissiLetter
"IT'S A RECESSION WHEN YOUR NEIGHBOR LOSES HIS JOB
IT'S A DEPRESSION WHEN YOU LOSE YOURS"
The percentage of Americans who believe will lose a job in the next 4 months jumped to 4.4%, THE HIGHEST ON RECORD.
The labor market continues to sharply weaken.👇
4
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@KobeissiLetter
Great THREAD, CARRY TRADE IS HUGE:
Japanese Government gross size of its balance sheet is $20 trillion or 505% of Japanese GDP!
In other words, Japan's government is engaged in a GIANT $20 trillion "carry trade" - funding of loans and foreign assets by borrowing low-cost yen
2
26
143
THIS IS INSANE:
14 of the last 15 months of job (non-farm payroll) numbers have been revised downward.
April and May was REVISED DOWN by 111,000.
When excluding government jobs, 11 out of 12 months in 2023 were revised lower, the most since 2008.👇
5
48
140
THIS IS INSANE:
Bank of Japan owns ~80% of the country's ETFs and 7% of the entire Japanese stock market, according to Morningstar and the Tokyo Stock Exchange data.
Moreover, the BoJ holds ~55% of the Japanese government bonds.
Huge distortions 👇
1
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140
BREAKING: 48% of S&P 500 companies trade above its 100-day moving average.
This is the lowest level since November 2023.
Meanwhile, the S&P 500 has hit 34 all-time highs this year and is up by 17%.
At the same time, ~40% of stocks are negative for the year.
Underlyings weaken
5
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134
@KobeissiLetter
And the US debt has been rising by $1 trillion every 100 days.
The US debt-to-GDP ratio is at 124%, near the record of 126% in 2020
CBO estimates it will reach 131% in 2034
Since 1800, 51 out of 52 countries with a ratio above 130% have defaulted👇
6
31
136
IT IS LIKELY NOT DIFFERENT THIS TIME:
US Treasury yield curve briefly turned positive for the first time since July 2022.
It's been ~770 days since the curve has been inverted, the most EVER.
In the past, each time the yield curve uninverted, US economy fell into a recession.
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134
The US dollar has devalued by 98.47% vs gold since 1971.
In other words, USD lost 98.5% of its value vs the yellow metal in 53 years.
Meanwhile, Euro and Japanese Yen lost 98.3% and 96.7% during the same time while Swiss Franc 93.35%.
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133
In 5 of the past 6 weeks, the level of initial jobless filings totaled exactly 212,000.
Given a labor force that is 168M strong, achieving such stasis seems at least unusual if not uncanny, yet that is what the figures released each Thursday morning since mid-March have shown.
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ANOTHER US RECESSION WARNING:
The number of people receiving unemployment benefits spiked by >30% over the last 2 years, highest increase since the COVID Crisis.
In the past, every time when US continued jobless claims rose more than 20% from their lows, a recession followed.
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131
US ECONOMY HAS FALLEN IN A RECESSION:
Sahm Rule is an indicator, signaling when the US is in a recession.
If 3-month moving average of the unemployment rate rises by 0.50 percentage points or more, relative to its low in last 12 months it signals a recession.
It is now 0.53.
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130
@zerohedge
Correct. From Nov to March, the US lost 1.8 million full-time jobs
In the last 12 months, the US labor market has seen a 1.9M increase in part-time jobs while the full-time jobs count declined by 1.3M
Headlines: US been adding jobs for 39 straight mths
6
43
128
@KobeissiLetter
THIS IS ABSOLUTELY BRUTAL:
US housebuying conditions plummeted in July to the lowest level EVER RECORDED.
The University of Michigan homebuyer confidence indexes dropped by 75% in just 3 years.
At the same time, the homebuilder confidence is near the lowest level since COVID.
9
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130
US YIELD CURVE HAS BEEN INVERTED FOR 764 DAYS, THE LONGEST STRETCH EVER
The difference between the US 10-year and 2-year government bond yields is -0.04%, on the brink of turning positive.
In the past, each time the yield curve uninverted, the US economy was in a recession.
2
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127
@KobeissiLetter
THIS IS INSANE:
US economy LOST 192,000 jobs in Q3 2023.
In last 30 years, such a drop happened only in RECESSIONS
Meanwhile, non-farm payrolls were likely OVERSTATED in 2023 by 730,000 jobs, according to Bloomberg👇
2
40
123
THIS IS REALLY CONCERNING:
Japan households spending declined in the last 14 out of 15 months.
Meanwhile, Japan's GDP shrank at an annualized pace of 2.9% in Q1 2024, rose slightly by 0.1% in Q4 2023 and contracted by a whopping 4% in Q3.
3rd largest economy is in a recession.
5
48
123
@KobeissiLetter
Since February 2019, the US national debt has increased by $12.5 trillion and the US GDP by $7.2 trillion.
Therefore, in the last 5 years for 1 unit of GDP, the US government has created 1.7 units of debt.
The US economy is becoming less productive every year.
5
21
120
@LynAldenContact
RIGHT: US government deficit hit $1.5 trillion in the first 10 months of the Fiscal 2024
This is larger than all years before the COVID Crisis including 2009 - last year of the Financial Crisis when deficit was $1.4 trillion for the entire 12 months👇
12
36
122
@KobeissiLetter
US ECONOMY HAS:
1) 39 MONTHS OF CPI INFLATION AT 3% OR ABOVE
2) Jobs OVERSTATED in 2023 by 730K
3) 346 BIG bankruptcies in 2024, most in 14 yrs
4) $2.1tn excess savings gone in 3 years
5) 1.5M jobs lost in 6 months
6) $34.8 tn NATIONAL DEBT - record👇
7
44
120
HOW BAD THE US DEBT CRISIS HAS BECOME?
US federal debt hit $34.8 trillion for the 1st time in history
In last 4 years, it has skyrocketed by $11 trillion, an equivalent of 40% US GDP.
By comparison, reaching the first $11 trillion it took 220 years.
How does it matter?🧵1/11.
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40
115
🚨ANOTHER US CONSUMER WARNING🚨
Transitions into serious delinquencies (90+ days) for auto loans for those aged 18-29 and 30-39 spiked to the highest in 13 years.
Older generations also seen a jump in serious delinquencies to levels not seen in over a decade but not such rapid.
1
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126
GLOBAL DEBT HIT A MASSIVE $315 TRILLION in Q1 2024
It has SKYROCKETED by $15 trillion in 12 months.
As a % of world GDP, it is 333%.
In other words, global debt is more than 3 TIMES larger than the economy.
Since the COVID CRISIS, it has increased by $55 TRILLION.
Insane.
8
52
120
BREAKING: US credit card debt jumped to another RECORD of $1.14 trillion in Q2 2024.
Since 2021, the total credit card balances in the US skyrocketed by ~$400 billion or ~50%.
Meanwhile, the average credit card interest rate hit a new record in Q2 2024 of 22.76%.
3
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118
THIS IS WILD:
Warren Buffett’s Berkshire Hathaway just sold 50% of its Apple shares worth $50 billion.
Overall, he dumped $76 billion worth of stocks in Q2 2024.
The company's cash pile spiked to a RECORD $277 billion, up from $189 billion in Q1.
What does the Buffett know?
7
33
120
🚨GLOBAL RECESSION ALERT🚨
Copper plummeted below $4.10 for the 1st time since Mar 2024, heading for the worst streak since the Pandemic CRASH.
Copper fell for 9 days straight, as inventories SPIKED to highest since 2020.
As a reminder copper is a key economic bellwether.
5
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117
US CONSUMER SPENDING IS SET TO DECLINE FURTHER:
US households expect their income will increase by only 0.8% over the next 12 months, the LOWEST since the COVID CRISIS.
Income expectations have also experienced the most rapid decline since the Great Financial Crisis of 07-09.
1
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117
@profstonge
STAGGERING:
US economy actually LOST 192,000 jobs in Q3 2023.
In last 30 years, such a drop in employment has happened only in RECESSIONS.
Meanwhile, monthly non-farm payrolls were likely OVERSTATED in 2023 by 730,000 jobs, according to Bloomberg.
👇
9
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113
THIS IS INSANE:
US retail sales have been revised down in the last 7 out of 9 months
Adjusted for inflation, retail sales have declined for 4 straight months and are down by ~3% from its April 2021 peak.
The data is not as good as the headlines claim👇
4
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114
IS THE MARKET CONCENTRATION BUBBLE BURSTING?
The top 5 stocks share in the S&P 500 fell to 27% from 29% all-time highs seen in July after other 495 stocks caught up.
This is still above 2020 high of 25% and the 2000 Dot-Com bubble peak of 18%.
NVIDIA report on Wednesday is key
2
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@KobeissiLetter
US ECONOMY NOW HAS:
1) 40 MONTHS OF CPI INFLATION AT 2.9% OR ABOVE
2) Jobs OVERSTATED in 2023 by 1,000,000!
3) 346 LARGE bankruptcies in 2024, the most in 14 years
4) $2.1tn excess savings gone in 3 years
5) $35.1 TRILLION NATIONAL DEBT - record👇
5
32
113
US LABOR MARKET IS SHARPLY WEAKENING:
In July, 28.4% of Americans searched for a job in the past 4 weeks, the most in over 10 years.
This is 9 percentage points higher than 19.4% recorded last year, according to the Fed SCE Labor Market Survey.
Unemployment is going to rise..
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111
ANOTHER US RECESSION INDICATOR:
The number of unemployed people long-term in the US rose by 27.4% year-over-year in July.
This has been the 7th consecutive month of increases.
In the past, such a jump in unemployed people for 27+ weeks has only happened in recessions.
5
47
110
YOU CAN'T MAKE THIS UP:
US job (non-farm payroll) numbers were overstated in Q3 and Q4 2023 by nearly 1,000,000!
In fact, the US economy LOST 192K jobs in Q3 2023 and created 344K jobs in Q4 2023 instead of +494K and +637K initially reported.
Insane👇
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@KobeissiLetter
Estimated Yen carry trade* in stocks and bonds is ~$4.5 trillion
*Borrowing in a currency with low rates (Yen) and investing proceeds in a higher-yielding currency (USD)
In Sept 2022, Japan conducted 3 interventions for the 1st time since 1998 spending over $57bn in reserves
5
14
108
YOU CAN'T MAKE THIS UP:
Only 22% of economists surveyed by Bloomberg believe that the US economy is heading into a recession.
In Dec 2007 when the Financial Crisis hit, only 2 out of 54 economists surveyed expected a recession and on average all expected 2.1% growth in 2008.
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BREAKING: April has seen 2nd largest number of US bankruptcies in 46 months!
Number of bankruptcy fillings hit 66 in April, only 1 below March 2022.
Year-to-date US economy has seen 210 bankruptcy registrations, 2nd highest in 12 years.
This does not look like soft landing.
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US BANKRUPTCIES HIT THE HIGHEST LEVEL IN 13 YEARS
Chapter 11 fillings surged to 2,462, highest since 2011.
This comes after companies have struggled to pay their debt due to historically high interest rates.
Even if the Fed cuts, bankruptcies will rise more due to lag effect.
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THERE WE GO:
The Conference Board Leading Economic Index® (LEI) is now down by 15% from its peak, the most since the GREAT FINANCIAL CRISIS.
The index covers 10 key financial and economic indicators.
The drawdown is as significant as during the 1970s and 1980s recessions.
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IS SOMETHING BAD COOKING UNDER THE SURFACE?
US high-yield loan funds posted $2.5 billion of outflows last week, the most since the COVID CRISIS.
The high-yield and leveraged loans market is huge and worth $1.3 trillion.
These loans have lower rating than high-yield bonds.
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THE ECONOMIST:
"America's recession signals are flashing red. Don't believe them."
Will this turn out to be the worst take since the 2007-2009 Financial Crisis?
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@KobeissiLetter
Since February 2019, the US national debt has increased by $12.5 trillion and the US GDP by $7.2T
Therefore, in the last five years for 1 unit of GDP, the US government has created 1.7 units of debt
This is incredible how debt-driven the US economy is👇
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@KobeissiLetter
Data is flawed.
He also just acknowledged that non-farm payrolls might be a bit overstated.
He's right:
US economy LOST 192,000 jobs in Q3 2023.
In last 30 years, such drop happened only in RECESSIONS.
Bloomberg: Non-farm payrolls were likely OVERSTATED in 2023 by 730,000
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@KobeissiLetter
The Fed left rates unchanged at 5.5% and SLOWS its balance sheet shrinking (QT) in Treasuries starting in June from $60 billion to $25 billion per month is BIG
Mortgage-backed securities (MBS) pace stays at $35 billion per month.
From $95 billion to $60 billion QT now
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US interest payments reached more than $1 trillion in 2023 for the first time in history
Interest costs account for more than 36% of government receipts, the most in 27yrs
They are set to reach a WHOPPING $1.6T by the end of 2024 if rates remain steady👇
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@KobeissiLetter
YOU CAN'T MAKE THIS UP:
US job (non-farm payroll) numbers were overstated in Q3 and Q4 2023 by nearly 1,000,000!
In fact, the US economy LOST 192K jobs in Q3 2023 and created 344K jobs in Q4 2023 instead of +494K and +637K initially reported. 👇
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THIS IS INSANE:
Bank of Japan owns ~80% of the country's ETFs and 7% of the entire Japanese stock market, according to Morningstar and the Tokyo Stock Exchange data.
Moreover, the BoJ holds ~55% of the Japanese government bonds.
Huge distortions 👇
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THIS IS CONCERNING:
ONLY 25% of the unemployed Americans filed for unemployment benefits last month, down from ~30% in January.
This is a quite low share historically.
In other words, initial jobless claims data might be significantly UNDERSTATED.
Chart: Anna Wong
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