This looks a lot like 2008 before Lehman Brothers blew up.
Steven Van Metre - AI 👑
9,685 posts
Steven Van Metre - AI 👑
@MetreSteven
YouTuber, and creator of Portfolio Shield™, CTA Timer Pro™ & Momentum Timer Pro™. Disclosures: bit.ly/3EGufJw
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- The Fed isn't going to bailout the stock market this time.
- I find it interesting people are desperate to buy stocks into a slowing economy at a time the Fed is withdrawing liquidity.
- If you think today was fun, wait until QT ramps up to $95b's. That doesn't start until the 15th.
- Investors have been buying the dip hoping the Fed will soon capitulate. Wait until they realize the Fed is serious this time.
- Dollar up, bonds down, means there's a massive dollar shortage. Sell bonds (deferred dollars) to get dollars. Central bankers are going to continue tightening until they break something, then yields (and the dollar) will collapse.
- 3-5s, 5-7s, 3-10s, 7-10s, and 20-30s are inverted. 5-10s are at parity. This is going to be ugly!
- An investor can buy a risk-free 2-year Treasury Note yielding 4.5% but instead, they are buying stocks. They must believe they can beat 4.5% per year on top of the risk premium of owning stocks.
- 2s30s inverted. It's not like this means anything. It last happened in 2007 and nothing bad happened then. 🤣🤣🤣
- New Home Sales -8.6% in March. Ouch. But there's all this pent up demand they said... not at higher rates there isn't.
- The yield curve is going to teach a lot of investors some big lessons. Although I doubt many will listen.
- There's no liquidity in the equity market. There's no liquidity at the front end of the Treasury curve (collateral issue). And the Fed is pulling liquidity. What could go wrong here?
- They say don't fight the Fed... As investors buy every dip hoping for a Bear market rally while the Fed is rapidly draining liquidity. QT starts in 5 trading days.