Jim Bianco

The table below shows how many days before the recession starts the stock market peaks. All the numbers are negative, meaning the stock market peaks before the recession starts. In July 1990, the recession started 11 days later when Iraq invaded Kuwait. The price of oil went up 400%. In 2020, the recession started 17 days later when the global economy was shut down because of a pandemic. --- So unless a Global crisis forms in the next couple of days, the stock market is telling us we are at a minimum several months away from a recession, if even then.

The market needed a "clearing event" to create the low. It was not going to go up until these underwater positions were sold or put into the hands of a stronger owner (Citadel). If they held out, stocks would have kept going lower.

1/3 The Nasdaq 100, or $NDX, the underlying index for the $QQQ ETF, is up 9.36% since last Wednesday's close. On Thursday morning, we learned that Public Stock Holdings of the Hedge Fund Situational Awareness was bought by Citadel. It has been straight up since. https://t.co/6HJvAIWL6a 2/3 This chart shows that a 9.38% return in four trading days would rank as the 6th-best four-day period in the last 20 years. As of this writing, we still have 1.5 hours left in today's session. So our rally into the close could push it even higher. https://t.co/GfJiu87Vfh 3/3 My feed has been full of bearish reports and podcasts about AI/Technology sin…

NY Fed President John Williams today: "My forecast personally is for inflation to come down in ⁠the second half of this year and come down further next year." This is also Wall Street's inflation forecast. As this chart shows, Wall Street has had this exact inflation forecast for 64 straight months, and it has been wrong for 64 straight months. Question for Williams: why is this forecast suddenly going to go right now? What is about to change that is going to make this 0 for 64 forecast now correct? --- Explaining the chart The black line is the year-over-year change in core PCE. The colored lines are median results from roughly 70 Wall…

From Episode 2, "Not Your Father's Fed" (details in the repost below) https://t.co/B7nRPdXaaq

Opening line. - Memo to Wall Street: Quit whining about the Federal Reserve. Your clients are paying you (a lot) to make judgments about risks and returns in real time, and it’s embarrassing when you complain now that Daddy Fed isn’t telling you how to do it.

Last time I checked, the Saudi Crown Prince is not the head of the Iranian government. If you want to deal with Iran, deal with Iran! The Europeans don't like the way Trump acts. Maybe they should call Mark Carney in Canada and cut a deal with him! Close enough, right?

1 hour ago, Bloomberg posted this story *TRUMP SAYS NEW IRAN NEGOTIATIONS TO BEGIN MONDAY AFTERNOON Below was posted 10 minutes ago.

I get the idea that there might be some version of Yield Curve Control (YCC**) or other government intervention to hold down interest rates. But remember, what's freaking the market is inflation. If the Fed and/or Treasury does anything to suppress interest rates that is perceived as inflationary, such as expanding the balance sheet, not cutting interest rates when it is expected, shortening duration, or outright bond buying, which is perceived as stimulative. The market will take this as potentially creating more inflation, and the result will be even higher interest rates. What the market wants to bring yields down is a commitment to get…

Available at: https://t.co/WO2AOPLIbu https://t.co/owVzuh8MjG https://t.co/krAdan2DLD https://t.co/AMuyPrlytm

From episode 2 of our "Rational Dissent" podcast ... https://t.co/5VVjkDz29n

Went live today Trump will want them to be happy with their new serivce. So, expect more frequent market moving posts.

Situational Awareness still exists and it is still up 80% YTD. Leopold is still a hedge fund manager with a good track record, and a big learning experience. He will raise big dollars in the coming weeks/months. —- Wall Street has a long history of giving money to managers after they blow up. Partial list: John Meriwether, Long-Term Capital Victor Niederhoffer Mike Vranos, Ellington Howard Rubin, Merrill Lynch Jon Corzine, MF Global Boaz Weinstein, Deutsche Bank Brian Hunter, Amaranth Gerald Tsai, Manhattan Fund … and let’s not kid ourselves, when he gets out of prison, SBF will be among the largest hedge funds managers in the world.

Spain, Portugal and Morocco are all hosting the 2030 World Cup.

@the7th_sleeper The understanding is that, logistically, they have to announce the presser a week before. This is because many reporters live in New York. And if they announce it ahead of time, they basically told you what the outcome.

Let me rewrite the opening sentence: Trump has ordered fresh attacks aimed at getting Tehran to surrender that could begin as soon as the NYSE closes on Friday and last until crude oil reopens in Asia on Sunday night.

The Fed should allow the dissenters to put out these rationales with the statement on Wednesday. Then Warsh could be asked about them, in addition to defending his vote, which I assume would be in the majority.

South Korea might be the biggest "degen" market in the world. (meaning dominated by reckless retail investors). And here we go! *KOSPI JUMPS 14% AS SK HYNIX, SAMSUNG UP MORE THAN 25%

Dudley wants the Fed to publish its reaction function. Whose? Warsh just drew three dissents and calls the family fight a "design feature." This isn't 12 voters with one reaction function anymore. It's 12 voters with 12 reaction functions. Dudley's right that Warsh at least owes us his. But a function of what? Warsh: "We're going to deliver two percent inflation and not a whisper more. But to achieve that, I'm looking at a broader set of inflation data than PCE." He needs to define the metric before he can give us the rule. Then we're only 11 short of understanding this Fed. @NickTimiraos @lebas_janney

Devil mortgages are back! *US MORTGAGE RATES RISE TO 6.66%, HIGHEST LEVEL IN A YEAR

1/2 The probability of a Fed hike in Sept was 107% yesterday, but now it is 56%. "Bond traders can stop panicking when the Fed starts panicking." Under 50% = no Fed panic about inflation If no Fed panic, then the bond market will slow inflation with even higher yields. https://t.co/fi41dRZaBE 2/2 If, in the coming weeks, the Sept probability (above) falls below 50% and bond traders "panic" about inflation sending yields higher, how can the Fed reverse this before the Sept meeting? The Fed now has 12 independent voters. Three want to hike rates now. If Waller gives a speech saying he's ready to hike, that would be four to hike (I'm sur…

The Warsh press conferences aren't going to work in their current form, and it isn't because he's dodging. The post-meeting press conference is a vehicle for forward guidance. Warsh has stopped it and restated that today at the top he is "steering clear of forecasting," and "market participants are learning to play the ball, not the referee." Today he took 20 questions from 11 reporters, and by my count 14 asked for a future path or reaction function, 8 of them outright. That's not a lazy press corps. It's a room with no other established question, asking the only one it knows eight different ways and getting declined eight times. Everyone …

How long before Bessent punches him in the face?

Fed Gov Chris Waller voted to hold rates steady. Waller said this on July 13: "Sternly staring at inflation until it melts before our withering gaze is not an option." I agree, as does the bond market. So why did Waller vote to hold rates steady? Had he voted to hike, would the bond market's reaction today have been "calmer"

Crossing now: *TRUMP: WARSH WOULD LOVE TO SEE LOWER INTEREST RATES *TRUMP ON FED: WARSH IS FANTASTIC Does Trump understand that talking about cutting rates is causing this (red headline on Bloomberg)? *TREASURY 30-YEAR YIELD TOPS 5.20% FOR FIRST TIME SINCE 2007

My reaction on @BloombergTV is below. Two takeaways. 9 - 3 vote. Dissents are the new forward guidance. I think when we get to the end of the Warsh term as Fed Chairman, we're going to see a vast majority of the meetings were 11-1 or 12-0 votes. But when they are moving to change policy, dissents are the forward guidance that tells you the Fed is about to go a different direction. What Changed? Bob Michael of JP Morgan asked what changed. He asked why the Fed would hike rates because the data didn't really move that much from June, when we had a 12-0 vote. Correct. I would argue what changed is the way that the Fed now operates. It's n…

Fun stat highlighting the uncertainty around the outcome of this Fed meeting Total volume bet on Kalshi This meeting = $69 million June meeting = $3 million

The quote/chart from Bloomberg below is accurate. But keep in mind that from 1994 until Warsh, the Fed has operated under various forms of "forward guidance" (saying what you plan to do). That ended with Warsh starting with the June meeting ... and it is now front and center with this meeting. (I've been a critic of forward guidance as it has too often been viewed as a "promise" of future monetary policy, leading to over-speculation and moral hazards. So, I'm glad it is gone.) ---- Bloomberg: Since Bloomberg began tracking the data in 2008, the Fed has never raised rates when swaps assigned less than a 60% probability to such a move. Loo…

@wtkthecontrari1 By the way, $MTUM is still up 15% YTD, almost double the S&P 500's return.

I will be on @BloombergTV at 2 PM ET (right after the minutes are out) reacting to the Fed decision.