Summary of Is The Market Setting Itself Up For Disappointment? | Mike “Mish” Shedlock

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00:00:00 - 01:00:00

In this video, Mike Shedlock discusses how the recent market movements and Jerome Powell's public comments may be setting the market up for disappointment. He argues that the Fed may not be able to control inflation due to the many disinflationary forces at play.

  • 00:00:00 In this video, Mike "Mish" Shedlock discusses the recent market movements and discusses how Jerome Powell's recent public comments may affect future Fed decisions. Shedlock also discusses his thoughts on the economy, housing market, and job market.
  • 00:05:00 The market is setting itself up for disappointment, as rates have been raised to a level that is sufficiently restrictive to return inflation to two percent, and there is considerable uncertainty about what the rate will be. However, Powell reiterated their challenges that we face, and said that he is not going to back off until inflation is under control. If this happens, it is likely to be something very dire, which would not be good for corporate profits.
  • 00:10:00 The market is setting itself up for disappointment, as bullish bets have led to an increase in stock prices without any accompanying news. This movement is symptomatic of a short squeeze, during which those who were on the other side of the trade are forced to sell when the market moves that far. While inflation may have peaked, the era of rising inflation is over.
  • 00:15:00 The market may be setting itself up for disappointment, as there are many disinflationary forces at play. The Federal Reserve may not be able to control inflation due to these contradictory forces.
  • 00:20:00 In his latest piece, Mike Shedlock spotlights increasing inventories as another sign that the economy is heading for recession. He argues that this is due in part to the Trump administration's policies of destroying demand, including through its attacks on the supply chain.
  • 00:25:00 The "bullet effect" of decreasing demand for goods is being offset by increased demand for services, such as rent. This secular downturn is being masked by increased inventories, as bankruptcies in the trucking and shipping industries are increasing.
  • 00:30:00 In this video, Mike Shedlock discusses the market setting itself up for disappointment by being overly euphoric. He points to data points indicating that the economy is continuing to contract and slow down. It is hard to make a bullish case for the economy at this point, unless there are a number of potential bullish triggers that happen. One potential bullish trigger is if China re-opens and the global economy sees a boost. Another potential trigger is a negotiated settlement between Russia and Ukraine. However, there are also potential scenarios where something bad breaks, like a force-fed pivot by the Central Bank or a recession in housing.
  • 00:35:00 The market is setting itself up for disappointment, as the Federal Reserve is slowing the race to hike interest rates and may not jump on a pivot until something big breaks. Mike Shedlock warns that this could be a credit event, like a recession, rather than jobs.
  • 00:40:00 The market is setting itself up for disappointment, with jobs and the economy appearing to be stable, but inflation and a credit freeze being the biggest risks. Mike Shedlock discusses some possible candidates for a credit event that could upset the markets.
  • 00:45:00 The presenter discusses the stock market decline and how it may only be halfway over. He also discusses the possibility of a pensions bailout and gold's potential to rise in price.
  • 00:50:00 The market is setting itself up for disappointment, as gold has finally reached its lowest point in 2018 at $1800 an ounce. However, this does not mean that the market is incorrect, as it remains a potential trigger for inflation.
  • 00:55:00 Mike Shedlock discusses the possibility that the housing market is setting itself up for disappointment, citing mortgage rates and prices falling by low single digits. He also mentions the fear of recession and how it has decreased the amount of fomo (fear of missing out) in the market.

01:00:00 - 01:10:00

Mike Shedlock is concerned that the market is setting itself up for disappointment, with an overabundance of homes under construction and an increase in demand for apartments and condos. He predicts that this will put pressure on prices when eventually these homes are built, dampening consumer spending.

  • 01:00:00 The market is setting itself up for disappointment, with sellers losing this standoff and eventually houses that just have to sell for whatever reasons. The economy rides to their rescue, but this will have a major impact on consumers' wealth and perception.
  • 01:05:00 Mike Shedlock discusses his concerns that the market is setting itself up for disappointment, citing an all-time high number of homes under construction and an increase in demand for apartments and condos. He predicts that this will put pressure on prices when eventually these homes are built, dampening consumer spending. He also notes that companies that are squeezed will go into layoffs.
  • 01:10:00 In this interview, Mike "Mish" Shedlock discusses the current market conditions and how they might impact job prospects for older adults. He also mentions that some older adults may retire and that this will have little impact on the unemployment rate. He concludes the interview by saying that there are still job openings available, but that people are being fired and their hours are being cut.

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