Its Over, page-22789

University of Michigan Consumer Sentiment

July 2024: 66
2020 Covid Low: 72.3
September 2008: 70.3
*Perspective.

https://x.com/Convertbond/status/1811765417133715727

In US, Consumer is all important to its economy, and right now it is in dire state.

It is actually quite scary that there are many who are speculating the markets with money they can barely afford to lose.
Some could be living off their trading profits to fund their living expenses. If they get a bear mauling, the US economy could be more seriously dented than most economists would have forecasted.

As I previously penned, would this recession be a market event led/driven (i.e a market collapse result in a recession) OR would the market collapse be recession-led/driven?

In 2000, it was the former as dot.com crashed, in 2008 it was the latter as Bear Sterns banking crisis led to a recession and market collapse under GFC.

Today in 2024, we have the fragility of the financial system of 2008 (arguably banks are in much more robust state than they were in 2008 but losses from bonds and CRE with bigger risks from yen carry trade. CLOs ) and a much bigger debt and geopolitical risks to boot, with the overvaluations and stock bubble of 2000.

The ingredients for a stock implosion are all there - overvaluation, high debt levels (on all fronts- individuals/corporations/Govt), sector in distress (CRE), fast weakening economy, geopolitical disorder (mercantilism), final speculative mania - what is only needed is a negative catalyst. When the foundation of fundamentals is weak, it does not require a major negative catalyst to bring the house of cards down, because beneath the facade of an all time high market lies cabinet full of fragilities waiting to implode.

It is my 'duty' to tell you the inconvenient 'truth'. No one will do, because we don't want to dwell on negavitity. But far from being a doom merchant, what I am saying here is not far from what you already know.

The putting on lipstick on the pig economy and markets is what it is. All time market indices convey a bright outlook for stocks but that's not exactly what we got - it has been the lowest market breadth all time highs we have had. Actually very similar to Q4 2019. So please don't show me a stock index chart to convey that it is a great bull market in the making. Likewise, the US economy seems to be expressed as being healthy with a soft landing prospect but in a great economy, well qualified people should be able to easily find work and we should not be seeing large profitable mega techs having to layoff thousands of people. The economy is no longer working for many despite what the economic data shows.

Are stock indices just as fake as economic data? It can be very BLINDSIDING. Especially for the novice.