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제목·설명란에 출연자 정보가 없어 채널 소개는 미상. 연준 2월 FOMC에서 25bp 인상은 예상되나 12월 전망 대비 새 매파/비둘기 신호는 없을 것으로 봄. 금리 인상 사이클은 약 5~5.25%에서 멈출 것으로 전망하며 시장은 2023년 후반 인하를 가격에 반영 중이라고 지적. 미국 자동차 금융 연체·압류 증가와 자동차 시장 위험을 강조. 중국 인플레 2차 파동 우려는 크지 않다고 봄. 채널 측 유료 강의 홍보 포함.
다듬은 글
Lots of bad news from people saying it's worth selling growth due to skyrocketing auto recalls, massive warnings to the market, and the Federal Reserve, which Nick Tee just tweeted about, is expected to assess the situation. How do these delays affect the market and the economy, especially considering that everything seems different this time?
After all, we are emerging from a pandemic and are at war. How will this affect markets in the future? And what do I think about Jerome Powell and the Federal Reserve's actions this week? Find out in this video. And remember, you want to grow your capital by investing in real estate, stocks, buy-sell alerts, portfolio disclosure.
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There is a repo crisis in the car market. This week, madness reigns at the Federal Reserve . And many analysts say that we shouldn't chase growth. What do we believe in? What do we think? Let's talk about this. But always remember that the coupon code is valid today, January 30th. Check out the link below to get the best possible price, at least guaranteed for the next 3 months, if not probably much longer, thanks to lifetime access.
First, the share of Americans who say they live paycheck to paycheck has increased. Currently, 64% of Americans say they live paycheck to paycheck. This is 3% more than last year. And on top of that , eight million people in this group earn over $100,000 a year. However, half of people who earn more than $100,000 a year say they are currently living paycheck to paycheck.
Also significantly more than last year. This is happening at the same time as we in America are concerned about the approaching great recession. Germany tells us: “No, don’t worry. Everything is fine . We will not fall into recession." And then literally a few days later, about two business days later, Germany says, "Don't worry, we won't go into recession." Ah, Chancellor Olaf Schulz, Alice is fine, everything is great.
What is happening? Oh no, the GDP figures for Germany show a 2% drop in GDP, and, um , Germany is of course a manufacturing hub, and a much larger than expected drop, unfortunately, could potentially drag Germany into recession. But we have to talk about America, because, look, even if we have the Federal Reserve this week, why is the market going up?
Well, Mike Wilson says that rallying is something you shouldn't chase. Mike Wilson, of course , is a bear at Morgan Stanley , and he tells us that the reason we saw the rally in January is because of the seasonal effect of people selling in December, potentially collecting tax losses, and then going back to the possibility of a drop or FOMO (fear of missing out ) on short positions after December.
Mike Wilson repeats: don't fight the Fed. And remember that, and this is another excerpt that I found, but, uh, you have to remember that the last time we had a January that moved the same or almost the same as this January, it was the best January since 2019. Er, or the last time in 2019, January showed markets growing by 8% .
And now we're up about 6% in January , which is again the best January since 2019. But the difference between then and now was that in December 2018, around the 18th, 19th, and 20th, the Federal Reserve pivoted , and people thought they were going to continue raising, but they didn't . This was obviously before the pandemic, and we had a pretty bloody December.
And that was the last time we had a great January where the Fed really moved. The Fed didn't move at all. In fact, Jerome Powell is expected to likely continue to wear a rather unpleasant mask this week. That's because as stocks start to rise a little bit, or start to rise a little bit , which is a downside for the Federal Reserve, we see a deterioration gun to ease over the past 3 months.
And while, on the one hand, easing financial conditions is helpful in avoiding a recession, the Federal Reserve does not want financial conditions to become so loose that it leads to a resurgence of inflation. That would be the biggest risk. So I think Jerome Powell will have to wear a very ugly mask when he speaks at the press conference this Wednesday.
We expect an overall increase of 25 points. We don't expect any departure from the 25 basis point hike, but we do expect Jerome Powell to likely reiterate what he gave us in the December economic outlook summary. Any deviation from what he told us in December will likely be seen as bullish, especially if he softens his stance.
I don't think he's going to be more aggressive based on what he reported in his December economic outlook report with the rest of the Federal Reserve staff, because the data actually came in weaker than it did at the December Federal Reserve meeting. We had weaker inflation. We had weaker production figures.
So I don't expect the Fed to be any more decisive than it was in December. Personally, I think this could be a good thing because it could mean that we won't be talked about so dirty that the market will eventually sell off the stock. But I would caution against over-optimism , mainly because I think Jerome Powell's challenge will be to make sure he makes it clear that he thinks we're still knocking on the door of a recession, that the 0.5% GDP estimate for 2023 is still his base case, that we'll barely avoid a recession; but barely avoiding a recession, according to the Fed, probably , according to the market, uh , a recession.
Uh, and I wouldn't be surprised if he again emphasizes the need to raise the unemployment rate to 4.6%. That's what they, along with the Federal Reserve Board, repeated, uh, in December, in addition to raising the rate to about 5.1% at the final rate. We're at about 4.25% right now, and, uh, if we get to about 5%, which would be three more 25 basis point hikes, we'd get to that 5-5 and a quarter rate hike that we expect the Federal Reserve to, uh , at their final rate.
The bond market is currently pricing in a rate cut in late 2023, but I expect Jerome Powell to repeat what he said in December. We're not even talking about lowering the ratnvinced, and that's great, uh, and that's why I don't expect to see it now, but when the Fed is convinced that inflation is gone and wage inflation is gone, what will the Fed do?
Well, in my opinion, the Federal Reserve can very easily maintain its credibility by doing this very simple thing: “Listen. We have a policy called FATE, flexible average inflation targeting. We believe that the average inflation rate for PCE will be 2%. We don't really need the monthly rate to be 2%.
This is an easy way for them to abandon the idea that inflation should be 2 %. They could have let her be a little taller for longer while easing the conditions, right? Furthermore, I believe that once they are convinced that inflation is gone, and that is not all, they can turn around very quickly and stop the bleeding in the labor market and actually prevent wage losses as high as they predicted in December.
I truly believe that December is the Federal Reserve's attempt to outrun the running deer. In other words, inflation was something like this deer running away from the Fed. And the Fed has been following it, but they have always lagged behind it in all their consolidated economic forecasts over the last year and a half.
The Federal Reserve was wrong. They had to review them higher and higher. Now, I believe the Federal Reserve finally gave us the December report where they actually got ahead of inflation by getting so aggressive. And I think the Federal Reserve doesn't really need to be more aggressive right now, especially given that inflation and manufacturing data are softening right now .
I think the Fed will probably just keep what it reiterated in December. So if I had to simplify the message of what I think we're going to get from Jerome Powell, I want to be very clear. I don't think we'll get any more "hawking" than we did in December. I think we'll probably remain consistent in our December "hawking ." "Compliance with the December 'hawking' essentially simply refers to the consolidation of economic forecasts for December.
I think this is the simplest argument Jerome Powell could make. He could come out, make a statement, answer questions and answers, and essentially just move the February meeting all the way to March. Just, hey, look, we're doing 25 bp, still waiting for more data. Take a look at the summary of economic forecasts for December.
This is our opinion. Nothing has changed. Again , this is not exactly a bullish trend. So I would n't call it very bullish. We don't...I don't think we're going to get any massive easing from Jerome Powell. And I don't believe we'll get any more " hawking." So I actually think we're going to get a very neutral Jerome this time.
Now, it is entirely possible that a neutral position will eventually be considered bullish because it is nothing more than "hawking." I think a lot of people believe that because the markets rallied in January after the December crash , the Fed should turn hawkish. I don't believe this is true. I believe the Fed will see that financial conditions still remain substantially tight.
The yield on 10-year Treasury bonds is still around 3.5%. also again, significantly stressed, and any small recovery in the stock market that we've seen is actually good for avoiding a recession. Remember what they are trying to do. They are trying to thread the needle . They're threading the needle, hinting, "Hey, we don't want things to be so tight that we're definitely going to have a recession, but we don't want things to be so loose that we're going to have inflation.
We just want things to be, you know, somewhere in between." And that's where I think the Fed is in the right place to just be neutral this time. Mr. JP, if you're watching this, ma'am, I wish I could be at those FOMC press conferences so I could throw you some softballs, Dad. Good. No, I think it would be really cool to have some kind of YouTube representation at the Federal Reserve.
But in the meantime, I'm not too nervous about JPOW on Wednesday. And I think that's normal. This is despite JP Morgan and Morgan Stanley saying growth needs to be boosted , with Bank of America saying it expects a shift from monthly job gains in 2022 to job losses in the first quarter of 2023, all the way up to 175,000 job losses per month in the first quarter of 2023.
This would be a massive coup. Uh, something that , uh, the markets won't be very, uh, ready for, I think. But remember, we've known this for a long time, frankly, I mean , always, but I've been talking about this since January 2022. I've been talking about this for over a year. Job losses lag behind recessions.
So, frankly, the fact that everyone continues to focus on job losses is just absurd to me, because we know that job losses lag behind recessions. So the worst could potentially be behind us. We'll see . However, hedge funds do n't seem to think so. The Commodity Futures Trading Commission just released data showing that there are 2.4 million Treasury bond contracts with massive short positions.
Bulk short bets. We're more short selling, uh, than we've been in quite a while. Uh, let me briefly explain what that means. When you are short Treasury bonds, you believe their prices will fall. When Treasury bond prices fall, what does it mean? This means, uh, short sellers and hedge funds believe that interest rates on yields or Treasury yields will actually rise.
So if you think yields will go up, you use the Michael Burr approach and short sell. Look at the screen now. I'll hide here for a minute. Traders have never been so bearish on Treasury bonds. Aggregate short positions in Treasury bonds are the highest level of short selling we've seen. Uh, well, I mean you can see it gradually decreasing to zero starting in 1993 on the left, but on the right of this graph we are at the highest level of short positions in Treasury bonds that we have ever seen.
This is significant. Again , hedge funds like to hedge risks. So, if things are going better, buy stocks long . If things are going to get worse, you might be hedging by selling stocks short, be telling us that they think the neutral rate is closer to 4.8-4.9%. In that case, we still have a lot of work to do, given that we're now at about the 4% lower bound on the Fed rate, and we need to see it rise by 25 basis points, er, potentially, over the next three cycles.
Uh, so keep that in mind. We want , we'll probably get to 4.5. Let me be clear because the 25-25 basis point range is a little confusing. We are at the level of 4.25-4.5. Now, when we get a 25 basis point increase, we will be at 4.5-4.75. Another 25 basis point increase. Uh , and we expect this in February.
The next increase will be at 4.75-5. If one more, we'll be at 5-5 and 1/4. Uh, and that's why the markets expect that, uh, we'll potentially pause in May at five to five and a quarter. This will be slightly above the neutral rate that the Fed has been talking about achieving for some time. Then the question is how long will they pause and how soon will we cut it short ?
I don't think the Fed will be very inclined to give us many hints about this at the next, uh, FOMC meeting, but we'll see. What's perhaps worse is not what the Fed is doing, but what's happening to the auto market , because many people are saying that the auto market is in a real bubble. In fact, the Federal Reserve just released its monthly third-quarter auto financing figure.
And, friends, it soared to an all-time high in Q3 2022 , rising to $41.22 billion in financed vehicles in Q3, which may coincide with high car prices and high, um, well, I mean high financing costs. Um, but in terms of nominal funded loans, high car prices are probably what contributed to this highest level of vehicle financing ever .
Um, and that was in the third quarter of 2022. Roughly corresponds to the increase in inflation that we observed. But it doesn't help that interest rates have also doubled in the past year. And delinquency rates are starting to rise, especially for borrowers with subprime mortgages, prompting research firm Fitch and ratings company Fitch to warn of a massive wave of auto defaults and foreclosures.
In fact, some banks are now reportedly increasingly speeding up the process of foreclosing on cars so they can sell them, obviously at a loss , but at a lower loss than if they had waited longer to foreclose on the cars. Think about it. If car prices drop sharply, you want to return it and your borrower stops paying.
You want to get this car back as soon as possible . So you can sell it in the market and have a smaller loss than if you held on to that slippery slope of falling prices. So far, we are still seeing vehicle default rates rising to around 2019 levels. So far, there has been no default exceeding these levels.
However, Fitch believes that very soon the lowest- income borrowers will exceed the default rates we saw in 2019. Not reaching the default rates we saw in 2008, but still causing significant additional pain. Now, some of the reasons for this are we have created a perfect storm for low credit loans. You were actually masking people's bad credit ratings because of the pandemic because it was impossible to be late and get a bad credit rating during a pandemic.
Well, almost impossible. You got a bunch of money from the government, unemployment benefits, stimulus checks, whatever. Additionally, because of the forbearance and the fact that you don't have to actually make payments, many credit scores actually increase during the pandemic. Combine higher credit scores with a massive car shortage, high interest rates, a chip crisis, and massive increases in car prices, and you get people masking their true qualifications with higher credit scores.
So, higher credit ratings, higher interest rates, higher prices, and rising gasoline prices are a recipe for disaster in car affordability. And now, over the last few months, about the last four to five months, we've seen a significant increase in the number of 30-day delinquencies and the number of 90-day delinquencies.
There is a person on Twitter who is called the car dealership guy. He's talked a lot about this issue, but he recently noticed that , in his opinion, banks are so concerned about car foreclosures that, on the one hand, they're increasing the rate of car foreclosures, but on the other hand, they're so morally incentivized, or almost immorally, you could say, immorally, incentivized to keep lending in order to keep potentially increasing profits.
Now, on the one hand, they are more likely to seize cars , and on the other hand, they are canceling credit requirements in order to be able to issue new ones. So it's a little crazy. On the one hand, more and more people are defaulting on their obligations, but on the other hand, they are actually making it easier to get new credit.
This is because they are starting to eliminate the so- called open-end auto loan condition. This is when you qualify for vehicle financing , and it shows that you already have an open auto loan. You should not apply for another one if you cannot make both payments. Well, now apparently lenders, according to the guy at the car dealership, are starting to ignore this condition, making it easier for people to buy a new car even as banks are worried about this mad flood of foreclosures.
The guy at the car dealership says that's stupid, especially considering that a lot of people are underwater on cars they bought in the last 2-3 years. Usually, people who are underwater have to pay money. To sell your car and buy a new one, you need to feed the kitten. Feeding a kitten means taking thousands of dollars out of your wallet to buy a new car and pay off your old one.
But most people don't have that kind of money. So, at the same time as defaults rise and foreclosures rise, banks are essentially saying, " But let's keep the funnel full and keep lending because car prices have already fallen 30% and are continuing to fall." Uh, this person thinks that seizures can end up with terrible consequences , and it really does have a bad effect on the car market.
Elon Musk even responded to this by saying, "Good prediction." Oh, that's not so good. In addition, we also have potential inflationary pressures that continue to be talked about from China and wages. Consumption is expected to be, and hopefully will be, the main driver of the economy, according to the Chinese government.
But consumption is not really the main driver of China's GDP. In my opinion, this could contain the second wave of inflation. But we'll see. The Chinese government really wants to stimulate spending in China. Household spending as a percentage of GDP is only 38% in China. In the United States, it is 70%.
In other words, the individual consumer makes up 70% of the US economy, but only 38% of the Chinese economy. Much of the rest of the economy in China is the result of the housing market boom. But the housing boom turned into a massive housing bust. How quickly will people return to the housing market, even with fewer housing restrictions?
Nobody knows. So we'll see. Fortunately, in America we have a Morgan Stanley article suggesting we stop worrying about wage inflation . And while Morgan Stanley is generally quite pessimistic, they argue that due to greater concentration of jobs, meaning rather larger and smaller companies, the increase in the number of jobs leads to less competition among other companies, which in turn leads to higher profits for those companies and lower unionization, which should ultimately hold down wage growth .
We'll see. So, putting it all together, there's a lot of bad news. Many analysts are shouting about the need to sell growth. This is a clean market. Germany could potentially fall into recession , although they didn't think so. The repo crisis continues in the automotive market. There is potential for a second wave of inflation in China.
I personally believe, and this is my summary of this, that I don't believe that a second wave of inflation in China will really cause much pain in the United States. I do not believe that the conditions exist for a wage price spiral, although we want to draw attention to it. Even if an auto bubble is present, it is nowhere near the levels of the 2008 crisis.
It is still about half the level of 2008. And yes, poor people, as always, will suffer the most during a recession. I don't believe that the Federal Reserve necessarily needs to push us over the edge into a deep, dark recession. And regardless of whether we have a recession, I think the United States will be relatively resilient, uh, over the next decade.
And, uh, once we get through this temporary madness, we'll start competing for the rest of the decade. And chips will be the next new gold with pricing by the end of the decade. We'll see. Things are not going very well with chips right now. Companies that manufacture chip equipment are seeing sales drop by 30-50%.
But it seems that much of this pain has already been taken care of. So what do you think? Will the Fed talk dirty to us? Will some of these smaller embers of pain, like in the repo market and China, lead to an explosion of pain and a reiteration of the fact that the Fed should never be fought? Will we face that Nike-like recovery, where yes, there are hot spots, but we will overcome them.
We will beat China, we will beat wages , we will beat inflation, we will beat reopening, and we will beat the auto repo crisis . We will get through all of this and just slowly continue to move forward. This is my opinion, but it doesn't necessarily have to be yours. But if you want to chat with me about your thoughts, be sure to join the wealth creation courses at the link below.
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