Thursday, November 9, 2023

Daily Economic Update: November 9, 2023

With Cleveland Fed's Loretta Mester reaching retirement age and the Cleveland Fed launching a formal search for a replacement, I think my time has come.  S&P winning streak up to 8 days (highly correlated with the 76ers current 6 game winning streak) and the actors strike is over.

After the curve flattened yesterday with long end yields falling, this morning yields are up 4bps on the front end with 2Y at 4.94%, the 10Y is 4.53%.  On the day ahead it's jobless claims, Powell and 30Y auction.  

GS Research (Mericle): To summarize, we think the impact of rate hikes is mostly behind us and see rate cuts next year as optional. We expect the FOMC to conclude that while neutral might not be as low as the 2.5% median longer run dot, it probably is not 5.25-5.5%, so some amount of normalization makes sense as inflation falls. We think this rationale is enough to cut to 3.5-3.75% but probably not further, though the policy rate could end up lower if a growth risk emerges and the FOMC pushes back with insurance cuts. We expect the equilibrium rate to be higher than last cycle because the post-financial crisis headwinds are behind us, large fiscal deficits are likely to persist, the funds rate is approaching equilibrium from above, and the r* narrative is changing

XTOD: PSA: guys, I know how to calculate the Sahm rule.

XTOD: Turning Empty Offices Into Apartments Is Getting Even Harder https://www.wsj.com/real-estate/commercial/turning-empty-offices-into-apartments-is-getting-even-harder-b6659020?reflink=integratedwebview_share

XTOD: “When you take out a mortgage in America, immediately after closing, they sell your loan—all your personal information—to a random lender unknown to you”  TRUTH.    “Cyber attack” on 900 billion dollars of loans   Mr. Coopers vibes are off.  Way off.  I’m not hanging with him

XTOD: “You’ve got 375 Principles. Those aren’t principles. Toyota has 14 principles. Amazon has 14 principles. The Bible has ten. Three hundred and seventy-five can’t possibly be principles. They are an instruction manual.” https://t.co/wa0jxi9e74

XTOD: Incredible display of Ray Dalio's PRINCIPLES:
1.) Ray Dalio builds app for ranking employee believability at Bridgewater
2.) Other employees rank as more believable than him
3.) Forces devs to auto-rank him as most believable

XTOD: We are getting a recession. Oil is the tell

XTOD: How about: build something good for humanity—because people don’t necessarily know what they want, and sometimes their death instinct is strong

XTOD: The last 8 times this happened, 100% of the time the weekend started on a Friday night with a glass of Barolo and a shaving of tartufo!

XTOD (good post on market timing, which I talked about here): Why market timing doesn't work: S&P 500 is up 14% this year, but just 8 days explain most of the gains.   Bottom line: no one knows when the best or worst days will come, so timing markets not a sound investing strategy. https://cnb.cx/47kzGqs  @DataTrekMB  @CNBC


https://x.com/Claudia_Sahm/status/1722235671790989336?s=20
https://x.com/danjmcnamara/status/1722291602323054781?s=20
https://x.com/texasrunnerDFW/status/1722271163852927063?s=20
https://x.com/NeckarValue/status/1722306686948348284?s=20
https://x.com/buccocapital/status/1722291162650927493?s=20
https://x.com/dailydirtnap/status/1722399304684282248?s=20
https://x.com/lukeburgis/status/1722410453018488963?s=20
https://x.com/INArteCarloDoss/status/1722376261035581762?s=20
https://x.com/BobPisani/status/1722266896077377778?s=20

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