Quote of @jasonfurman
Recall how this works. The deficit of one sector (income - consumption & net investment) emerges as the surplus of other sectors. Not a theory, just an accounting identity.

Corporate profits boosted first by direct pandemic deficits (PPP), then by household dissaving. Jig is up.
Wow: the October personal saving rate was the second lowest ever recorded (data goes back to 1959).

The two-month moving average was actually the lowest ever recorded and the three-month moving average was the third lowest.
1/ Quick status update

Our most reliable valuation measures remain extreme. Yes, they've retreated from the record blowoff the Fed encouraged by forcing the public to choke down 36% of GDP in zero-interest money, but that rate is now over 4%, and internals suggest risk-aversion
Quote of @AppleTVPlus
We watched this last night. Really fun, sweet, smart, big. Incredible production. Instant classic. Cast and crew has got to be proud of this. @VancityReynolds
Will Ferrell & Ryan Reynolds start your holidays on a high note in #Spirited. Now streaming on @AppleTVPlus
Quote of @stats_feed
but they're swole af
The average gym dumbbell has 362 times more bacteria than a toilet seat.
Quote of @elonmusk
um, I believe that "Vox populi, vox Dei" first appeared in a letter from Alcuin of York to Charlemagne, who used the phrase disapprovingly - trying to discourage the soon-to-be Emperor from putting religious minorities to death to appease the hateful "riotousness of the crowd."
Reply to @elonmusk
The people have spoken.

Amnesty begins next week.

Vox Populi, Vox Dei.
Should Twitter offer a general amnesty to suspended accounts, provided that they have not broken the law or engaged in egregious spam?
Quote of @elonmusk
Good news for the Russian and Chinese bots
You might notice small, sometimes major, improvements in speed of Twitter. Will be especially significant in countries far away from USA.
With gratitude to my tweeps for bouncing around all the ideas and laughs. Happy Thanksgiving!
Quote of @RudyHavenstein
He’s not wrong. The metoric rise of crypto Pokémon is inseparable from the loss of public confidence in government liabilities - particularly since Bernanke’s idiotic foray into QE. My take:
Quote of @MebFaber
This is true. People who “understand” finance are perfectly happy for executives to say “look, I made you a pizza” and then eat the pizza right in front of you, using buybacks, at record valuations, to offset the dilution. Ordinary schmucks imagine earnings going to dividends.
Investing quote of the day:
Morpho Advisory @morphoadvisory shared a version of this chart with me in 2019. I started tracking it out of pure curiosity, and tweaked it a bit, but it's bugged me ever since. I've got no well-defined mechanism to propose, so it might be spurious, but damn.
Quote of @seekerspeak
This is a good question. Problem is none of these have a reliable correlation with subsequent inflation. Even unemployment has a corr of just -0.23 with the year-ahead chg in core PCE inflation. The corr with Fed funds is just -0.15. The best predictor of inflation is inflation.
Quote of @charles_norton1
1607 would be consistent with "ordinary" 10% returns

The yellow dot is where we are at present
"Despite YTD market losses, a further decline of roughly 58% would still be required to reach ordinary valuation norms. That’s a loss of about 35%, from here, followed by yet another loss that wipes out 35% of what’s left. You know I’m not kidding."


That's SPX 1660
Quote of @jessefelder
Your regular reminder that people are holding boatloads of cash because the Fed has created boatloads of cash (currency, and indirectly, bank reserves and cash on reverse repo). Buy something with it, and the seller gets it. It has to be held by someone until the Fed retires it.
'Just before the pandemic, in the fourth quarter of 2019, American households held about $1 trillion in what was effectively cash. By the second quarter of this year, the amount had leapt to $4.7 trillion.'
Quote of @MacroAlf
The S&P 500 is down just 16.75% from a valuation extreme that, on the most reliable* measures, exceeded the 1929 and 2000 bubble peaks.

*best-correlated with actual subsequent 10-12 year returns across history

Good thread on last week’s CPI report
Reply to @MacroAlf
...was a celebratory rally.

Think about this.

After the softer than expected CPI print, the GS Unprofitable Tech Index rallied 25% in two days and the 60-40 portfolio had one of its best 2-day streak ever.

The market exploded higher across the board.

...we can expect only partial good news going forward followed by a rapid disinflationary trend in the second half of 2023.

But that second leg will be also associated with higher unemployment rate and an negative EPS growth.

The market reaction to the CPI print...

Quote of @ihartcharts
We like to call this the "pre-fraud" valuation.

At a bubble peak, valuation stands for nothing, and speculators will fall for anything. As Walter Bagehot wrote in 1873, "people are most credulous when they are most happy."

The S&P 500 is down just 16.75% from its bubble peak.
Reply to @hussmanjp
@hussmanjp P/S ratio: 5600

They are now on trial for fraud.
This is just a symptom of what happens when investors lose their minds.

Reminds me of the runup up to the March 2000 bubble peak: Xcelera - a company that owned nothing but a single hotel in the Cayman Islands - swelled to an $11.7 billion market cap, then poof.

Buckle up.
Quote of @hussmanjp
Maryland’s Governor-Elect @iamwesmoore, and for good reason #LeaveNoOneBehind
My friend Wes Moore @iamwesmoore is running for Governor of Maryland. Wes is the kind of leader who calls people to their better selves - who knows how to bring people together, to elevate, not separate. We need that. #LeaveNoOneBehind
Quote of @MichaelWarbur17
Unbelievable. 45 years later and it still takes me half a verse to shift my ears to hear this right. That intro just feels like it starts on the 1. Ditto for Tell Me Something Good by Chaka Khan and Spirits in the Material World by The Police.
Quote of @ScottCannaGuy
Reply to @menlobear
@hussmanjp Those are clearly unique & priceless NFTs, John

I feel confident pledging that @LanceRoberts will pay $1billion for each

That guy is all about buying at a good value!
Quote of @IanRHarnett
Reminder: not at the initial cut, and Ian is a great follow.
Reply to @IanRHarnett
The end of the bear market tends to come after the Fed capitulates, as in cutting rates aggressively
We are singing from the same hymn book as @biancoresearch and @TommyThornton that ‘be careful what you wish for’ re the Fed pivot. Bear markets only end once the Fed capitulates - rather than pivots.
Quote of @DrNickA
but wait, these are totally unique - the scarcity alone makes them valuable - really? no bids? nobody? anybody?
NFT London yesterday was a bit sad. Big empty rooms.

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