Latest Twitter Threads by @NorthmanTrader on Thread Reader App

Sep 18 • 4 tweets • 1 min read

September 18, 2024: 50bp rate cut
September 18, 2007: 50bp rate cut Reminder: In 2007 markets raced to new all time highs following the initial rate cut.
Soft landing talk permeated the landscape.
The recession began in Dec '07 but was not recognized until way into 2008 with the Fed still claiming no recession in Feb of '08.

Jun 12, 2023 • 6 tweets • 2 min read

And thus concludes the great monetary tightening cycle to combat inflation by slowing growth & wringing out the previous excess.

Note: Q1 data.

After all we reduced the balance sheet by a stunning 7% back all the way to levels of September 22, 2021.
So much tightening. So much liquidity removal.

Mar 31, 2023 • 5 tweets • 2 min read

What did you think was gonna happen?

They threw hundreds of billions of dollars of liquidity into a liquidity starved financial system in a matter of just 2 weeks and markets went up.
The end.

It's really that simple. But it's not QE? Who cares? It's LIQUIDITY.
You can argue about whether it's QE or not or you can trade off of it & make money.
Sorry to be so opportunistic about it, but we are here to make money & not argue with the market.
I've tried that in the past myself. Learn & adapt.

Mar 29, 2023 • 9 tweets • 3 min read

This is incredible.
According to the Fed total assets held by the top 0.1% amounted to $17.4 trillion at the end of Q4 2022 after peaking at $18.5 trillion.
The top 0.1% gained over $5 trillion in asset value since Covid.

And get this, the top 0.1% comprises a mere 131,485 households.

Mar 27, 2023 • 5 tweets • 1 min read

Understanding how the real world works is a key trading edge.

when you know you know ¯\_(ツ)_/¯

Mar 26, 2023 • 4 tweets • 1 min read

NorthCast Market Update: Alternate Universe
Banking stocks getting carpet bombed, tech flying to new highs for 2023. Who's lying?
Some perspectives during this battle for confidence.

For those preferring to watch this on Youtube I've posted the clip there as well:

Mar 20, 2023 • 4 tweets • 2 min read

NorthCast Market Update: $DJIA Ready to Rip?

Following up on the $DJIA discussion from the February 13 NorthCast.

https://twitter.com/NorthmanTrader/status/1625178667604230164

For those preferring to watch this on Youtube I've posted the clip there as well:

Mar 17, 2023 • 5 tweets • 1 min read

Anyone looking at inflation as if the recent banking crisis didn't happen is risking drawing the wrong conclusion.
Central banks raising rates to fight backward inflation data turning a blind eye to recent deflationary events are at risk of deepening their policy errors. The ECB didn't raise rates yesterday because it was the right economic policy action despite popular narratives, they did it for one reason only: Perceived credibility because they didn't want to cause a panic & the only reason they could do it was because the SNB stopped in.

Mar 15, 2023 • 7 tweets • 2 min read

NorthCast Market Update: The Bright Light
Amid all the market carnage an odd bright light stands out. Are you seeing it?

For those preferring to watch this on YouTube I've posted it to there as well:

Mar 15, 2023 • 9 tweets • 2 min read

Central banks, after blowing the inflation call, piled into rate hikes to save their credibility but neglected to assess the lag effects along the way and now some of these are blowing up in everybody’s face. Well done. Again. The worst part in all this is that the lag effects are still filtering through and hence things will obviously still get worse on the growth front. But recessions happen fast once confidence is lost and confidence just took a crowbar to the face.

Mar 13, 2023 • 5 tweets • 2 min read

So they hiked themselves right into a banking crisis while peddling a soft landing narrative forcing them to intervene before they even got to a pause.
Once again the Fed has shown itself to be utterly oblivious to the risks right under its nose.
The incompetence is stunning. And now everything is a policy shambles with no visibility with historic bond volatility and nobody has a clue just after a week after Powell blabbered all hawkish causing yields to rise before the new crisis collapsed them.

Mar 12, 2023 • 4 tweets • 2 min read

NorthCast Market Update: Sudden FUD.

Some perspectives on the recent dramatic market developments.

For those who prefer the watch this on YouTube I posted the video there as well:

Mar 10, 2023 • 5 tweets • 2 min read

Higher for longer. Right.
Banks already blowing up before they even got to their forecasted terminal rate.
At least in '07 banks didn't blow up until after.
You know there is a well established history of the Fed breaking things when they raise rates.
But it's always the timing.

Point is: Increasing the cost of carry from zero bound into the highest debt construct ever in record time has consequences & the collateral damage won't appear at first, but then suddenly cracks appear.
The soft/no landing narratives want to pretend these don't matter. They do.

Mar 10, 2023 • 5 tweets • 2 min read

When banks freak so do central banks.
Still think Powell will do 50bp with this going on?
Think again.

$BKX

Indeed the 50bp odds are already dropping like a brick from 80% odds at some point now down to 58%.

Mar 8, 2023 • 4 tweets • 1 min read

So we had to endure dozens of Fed speeches in the last month setting expectations for 25bp & now Jay just flipped it to 50bp.
What, exactly, was the point of these speeches but to again result in total misguidance as they did with transitory before?

Now Bullard will again come out and babble on how much credibility the Fed has.
Give me a break, this is a joke.

Mar 8, 2023 • 8 tweets • 2 min read

Potential daily reversal candle in the making in the 2 year yield.
Unconfirmed, but worth watching.

updated

Mar 7, 2023 • 4 tweets • 1 min read

Sen. Kennedy destroying Powell's soft landing fantasy with historical data that shows much higher unemployment (at least 7%) is needed to get inflation back down.
Powell not disagreeing with the data. Most notable: Powell did not offer a single argument as to why it would be different this time.

Mar 7, 2023 • 4 tweets • 1 min read

Good morning markets.

updated

Mar 6, 2023 • 4 tweets • 2 min read

Nearly 400 PHD's at the Fed and this is what they kept peddling to the public with hundreds of Fed governor speeches from Powell on down brimming with transitory confidence.
Unfathomable.
How can this organization be collectively so wrong, especially when so many warned them?

Median forecast for 2022: Less than 1%
Actual 2022: 4.33%

How is Fed "guidance" not anything but misguidance proliferated by hundreds of speeches.
If you don't know you don't know and keep quiet.
But to pretend you have some sort of knowledge and deceive the public with your… twitter.com/i/web/status/1…

Mar 3, 2023 • 6 tweets • 2 min read

NorthCast Market Update: Epic Battle

Not just a battle for control but an epic battle for control.
Something really interesting happened at yesterday's lows. Pay close attention as it may decide the outcome of the battle.
$SPX