Something Eventually Has To Give?

[Re:rising stock market vs economic reality] "Something eventually, has to give." - March 12, 2019 - Salmo Trutta

We Nattered....

The MSM could blare meteor shower to destroy Earth in 90 days.... nobody would care and the band played on.

B For Bob commented - That [comment] made me laugh out loud.

Following up on that line of thought, the MSM could blare... FOMC projects permanent low rates and GDP, Japan swallowed whole by NIRP, EU breaks up, worst tsunami since 2004 to hit India, China sucked into worlds biggest sink hole, Russia vanishes into giant Matryoshka nesting dolls???  

Having rode that horse hard and put it away wet, me thinks our readers get the point with negative headlines, economic or otherwise vs an ever rising market of late.  Mister Market doesn't care right? Ah, but not so fast Joe or you finish outside....

Catechism: Interest rates are never to be misconstrued as the price of money.  Interest rates are the cost of loan funds.  The price of money is reflected in FX pairs and indices.

As opposed to rising equities.... "RATES are saying something different." - Salmo Trutta  - Mar 2, 2019

Indeed they are, first with a longer term 2018 short end inversion: 30 above 90 day; 1 yr above 2 and 3 yr.

In fact, as of Friday March 22nd and for the 1st time since 2007: the 30, 90, 180 and 365 day rose above the 2, 3, 5, 7 and 10 year, while at the long end the 30 yr has increased 15bps in the last month.  

Earlier, the Nattering one excluded an inverted US yield curve, or the cost of loan funds. As soon as that Catachismic [pun intended] announcement was made on Friday, low and behold global markets sold off on higher volume. Futures: Russell 2K -4.8%; Nasdaq 100 -3.3% prior to Monday (today's open).

As demonstrated below, rather than the 10yr - 3 month spread, the 10yr - 1yr spread going negative is gospel or the gold standard for predicting recession.

Historically, four straight weeks and/or 25bps of differential in negative territory seals the deal. We were getting close to the event horizon just recently: Dec 31st 0.06; Feb 26th 0.08 and now have touched down, so to speak. 

Speaking of the MSM blaring or Trumpet-ing? Over the weekend POTUS 45 got a non conspiratorial Russian influence nod, mixed with potentially subtle tones of obstruction (TBD by Attorney General), from Mueller.  

All of the above, making our title apropos we think, at least for the moment? It Ain't Over Till It's Over? And the band played on? Does Donnie Trump rates? Up, up and away? Ferris Mueller's Day Off?

Tune in tomorrow, same Bat Time, same Bat Channel. More to come in Are Rates Saying Something Different?  Stay tuned, no flippin.