Beautifully put by Dario Perkins from TSL...
As we are already seeing in Germany & Sweden ...
Levering up multi is no different to levering up any other asset ... excessive leverage makes winners into heroes on the upswing and turns heroes into villains on the way down...
For those of you that like to 'geek' out on natural rates ...
The HLW series has returned (having stopped publishing it during covid the NY Fed has brought it back to life)...
And the scoop is ... they don't think anything has changed ... which is kinda important because even if you don't believe in r-star (and many don't) ... if the Fed believes in it ... it will have an impact on policy ...
So I guess that makes it official ...
That last sentence rings true ... something will break ...
Neat summary of what recession actually means...
Great charts from Rosie...
I think people forget ... whatever the inflation environment might be ... once recessions start there is always a dramatic decline in 10yr yields ... and in inflation ... and that the key variable that triggers the move is the fed funds rate being cut ... oh and the average rate cut into a loosening cycle in the US is over 500bps ... might be smaller this time but remember the Fed thinks neutral is 2.5% ... that's still alot of cutting!!
Pattern of post pandemic recovery in UK regions ...
London leading ...
Dutch GDP ...
Abrupt shift in UK payrolls ...
