ICYMI David Rosenberg: Make no mistake, the Fed is guiding us into a credit crunch
We just came off a month, where for the first time since April 2020, both the U.S. unemployment rate went up and capacity utilization rates went down . Available supply is now outpacing demand by a three-to-one margin as the output gap begins to widen. The 8.3-per-cent inflation rate is set to melt like an ice cream bar on a Houston sidewalk in the middle of July. Rents? Please, a lagging indicator and already yesterday’s story.
In the bond market, the front end is getting killed, and the real rate shot up 24 basis points to 1.56 per cent. It was last there in April 2010 and consistent with a further squeeze on the market multiple to 14x. We get a recession hit to EPS, and we are talking about the S&P 500 sliding below 3,000. Wait for it.
The big problem is the surge in the corporate cost of both debt and equity capital, because one can make a reasonable bet that capex is about to join residential construction in the deep contraction environment. The day the straw breaks the camel’s back is the day you will have regretted dumping your long bonds just because the Fed was busy taking the carry away in the ninth inning of the economic and market cycle — keeping an eye on those inflation expectations will win the day.Article content
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
David Rosenberg: Make no mistake, the Fed is guiding us into a credit crunchThese are the preludes to a market crash. Find out more from David Rosenberg
Read more »
David Rosenberg: Make no mistake, the Fed is guiding us into a credit crunchThese are the preludes to a market crash. Find out more from David Rosenberg
Read more »
Searchers seek to find mom, daughter missing in Guatemala sinkholeThe search for a mother and daughter whose car plunged into a huge sinkhole changed to a recovery effort, three days after they disappeared.
Read more »
Police respond to report of shots fired in south Calgary, find injured person - Calgary | Globalnews.caOfficers found one male with a possible gunshot wound. They said he suffered non-life threatening injuries.
Read more »
Paziuk: Let's find better answers to violence on OC TranspoWe see our public transit system as a microcosm of the city we live in and love. How can we make it safer?
Read more »