Various economic concerns, including a significant contraction in credit impulse, slowing savings, and negative credit impulse when adjusted for deposits. This suggests a reduction in the flow of new credit into the economy, potentially impacting economic growth and liquidity. Additionally, both real and nominal M1 growth have contracted more than during the Global Financial Crisis (GFC), indicating reduced liquidity in the financial system. These factors point to depressed domestic demand, which could result in lower inflationary pressures and potentially lead to a “hard landing” scenario, with adverse consequences for private credit and private equity markets.
Accordingly credit impulse has contracted further to -6% of GDP, the lowest point since Q3 2009 led by corporates. Savings have slowed down the transmission but adjusted from deposits, credit impulse is now negative. pic.twitter.com/LJSqqVXnd3
— Sabrina Khanniche (@skhanniche) September 28, 2023
At the same time, both real and nominal M1 growth have contracted more than during the GFC. With both credit impulse and M1 being a good indicator of the economic cycle, they point to depressed domestic demand which should feed through lower inflationary pressures. pic.twitter.com/JM3j0jFoCY
— Sabrina Khanniche (@skhanniche) September 28, 2023
#recession … #GFC2 edition
A hard landing will be catastrophic for private credit and #PrivateEquity. 😬 t.co/xtH01TaLDu pic.twitter.com/cnnKhyesOF
— Invariant Perspective (@InvariantPersp1) September 29, 2023
The Bank of Japan has announced an emergency bond operation, proposing to purchase 300 billion yen ($2.01 billion) of bonds with maturities of 5 to 10 years.
There it is.
The jokes continue to write themselves.
The people of Japan have been stockpiling #gold.
— Gold Telegraph ⚡ (@GoldTelegraph_) September 29, 2023
Remember what happens a few weeks after Japan crushes the 10 year yield on a red cycle 🤫
What are the odds the Fed suddenly resumes the dramatic OCE liquidity reduction next week t.co/ca9vBURvTW
— Financelot (@FinanceLancelot) September 29, 2023
Japanese Yen vs VIX
One last VIX crush? t.co/5r0u7q5v5P pic.twitter.com/sTRxl1zf1R
— Financelot (@FinanceLancelot) September 29, 2023
Bulls believe a Fed pivot will save them.
A Fed pivot now means currency crisis due to carry trade unwind. pic.twitter.com/90OUHehx9E
— Mac10 (@SuburbanDrone) September 29, 2023
This week caps the worst quarterly loss for JGBs since 1998:t.co/CMsj3PVBzt
GAME ON. pic.twitter.com/Szvhz49h0e
— Mac10 (@SuburbanDrone) September 29, 2023
It's not THAT difficult. t.co/xVjiXGzzRe pic.twitter.com/mr0ZTI1FCY
— Tom McClellan (@McClellanOsc) September 28, 2023
Good Morning Everyone! The CEO of JPMorgan said U.S interest rates could surge as high as 7%.
"I absolutely think they're possible,"
Who will want to buy stocks if you can make 7% a year risk free? pic.twitter.com/EkXdUDUoMY
— Genevieve Roch-Decter, CFA (@GRDecter) September 29, 2023
Stock Market Outlook Looks Like 2008, Warns JPMorgan’s Quant Expert
JPMorgan strategist, Marko Kolanovic, warns of looming downturns as the S&P 500 nears his 4,200 target, drawing parallels to the 2008 crisis. He cites challenges like overvalued markets, tech stock gains concentration, and tighter financial conditions, including rising interest rates. With increasing delinquencies in credit and loans, Kolanovic urges caution, noting that current market chatter mirrors pre-2007 crisis.
Surprising Collapse in Personal Consumption in Latest GDP Revision
The U.S. economic outlook darkens as the Bureau of Economic Analysis (BEA) releases revised Q2 GDP data. Personal consumption, a pivotal component of GDP, was a significant letdown. Initially expected at 1.7%, it came in at just 0.8%, a dramatic drop from Q1’s 3.8%. This marked the worst consumer performance since the COVID-ridden Q2 of 2020. Despite headline GDP figures meeting expectations, the underlying data indicates severe consumer weakness. Factors like the resumption of student loan payments, potential federal government shutdowns, and reduced auto production only magnify concerns for impending economic decline.
Inflation Hits Workers’ Wages as 60% of Americans Are Still Living Paycheck to Paycheck
Amid persistent high inflation and interest rates, 60% of U.S. adults live paycheck to paycheck. With the consumer price index up 3.7% from last year, stagnant wages strain households. The Federal Reserve’s 11 rate hikes haven’t stemmed inflation, severely impacting lower-income individuals. Essential costs continue to rise, and 70% of Americans report financial stress, with less than half having an emergency fund.
The percentage of American adults who always leave a tip is on the decline, per Bloomberg: pic.twitter.com/79FDjfLRvJ
— unusual_whales (@unusual_whales) September 29, 2023