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Here are the signs that the bear-market rally in stocks won’t last long – Citi ….. Not only won’t it last… IT HAS ENDED!!

“Bear market rallies are often sentiment driven, as the market just becomes too bearish,” wrote Citi Research strategists led by Dirk Willer, the managing director and head of emerging market strategy, in a note on Thursday. “More fundamentally, many bear-market rallies are driven by hopes that the Fed comes to the rescue. The current one is no different, as the Fed pivot narrative has been an important catalyst.”  In particular, the chart below shows that the AAII bull-bear indicator, one of the closely-watched investor sentiment surveys, is almost back to levels where bear market rallies peak out, with expectations that stock prices will rise over the next six months, increasing 1.2 percentage points to 33.3% in the week of August 15, while the bearish sentiment increased 0.5 percentage points to 37.2%.

SOURCE: CITI RESEARCH, BLOOMBERG

Meanwhile, the SKEW index for the S&P 500, which measures the difference between the cost of derivatives that protect against market drops and the right to benefit from a rally, normalized almost as much as it does in the median bear market rally (see chart below), said Citi Research. The index can be a proxy for investor sentiment and volatility.

SOURCE: CITI RESEARCH, BLOOMBERG

Federal Reserve officials in July agreed that it was necessary to move their benchmark interest rate high enough to slow the economy to combat high inflation, while raising concerns that they may tighten the stance of monetary policy by more than necessary, according to minutes of the Federal Open Market Committee’s July 26-27 meeting released Wednesday.

 Powell to tell Jackson Hole that recession won’t stop Fed’s fight against high inflation

After the release of minutes of the meeting, the Federal Resserve Bank of St. Louis President James Bullard said he is leaning toward another large rate rise of 75 basis points at the central bank’s September meeting. Meanwhile, Richmond Fed President Tom Barkin said the Fed “will do what it takes” to drive inflation back toward its 2% target, according to a Bloomberg report, while Reuters reported that Barkin saying the Fed’s efforts needn’t be “calamitous.” According to Citi Research, the bear-market rally refers to a bounce equal to or larger than 10% that takes place between the peak and the trough. “If a new low is made after a 10% rally, the next rally of more than 10% is a separate bear market rally (or a bull market, if no new lows are made subsequently),” wrote strategists.  The S&P 500 SPX, -1.29% was up 15.4% from its 52-week low of 3666.77 on June 16, while the Dow Jones Industrial Average DJIA, -0.86% rallied 12.9%, and the NASDAQ Composite COMP, -2.01% jumped 19.4% since their mid-June lows, according to Dow Jones Market Data. In total, Citigroup noted three indexes have experienced a 17% rally in the past 42 trading days since June 16.  U.S. stocks finished the week sharply lower. The Dow Jones Industrial Average DJIA, -0.86% dropped 292.30 points, or 0.9%, to finish at 33,706.74. . The S&P 500 SPX, -1.29% was down 55.26 points, or 1.3%, to finish at 4,228.48. The Nasdaq Composite COMP, -2.01% decreased 260.13 points, or 2.0%, to 12,705.22. NN: This bear market rally ran far longer then higher then i imagines…… It is beyond crazy what they have doe. The nice part is i have plenty of runway to recoup my losses and still make a tidy profit…… Hopefully i called the top (finally) and got you in a great trade… we shall see

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Iran Nuclear Deal Is Not Going to happen… Iran Wants Nukes MORE Then It wants Money and Russia Is Glad To Help!

  • The prospect of an imminent new “nuclear deal” between the West and Iran is looking increasingly unlikely.
  • A senior political and oil industry analyst highlights that there is very little chance that Iran will be willing to make the one concession the U.S. needs to move the deal forward.
  • The cementing view of the United States came on 9 August with the launch of Iran’s ‘Khayyam’ satellite, built almost entirely by Russia and powered into orbit from the Russia-controlled Baikonur cosmodrome.

The European Union (EU) last week tabled a ‘final text’ of a new iteration of the nuclear deal – the Joint Comprehensive Plan of Action (JCPOA) – to Washington and Tehran. However, it is equally true, as conveyed  by several senior political and oil industry sources close to proceedings, that there is virtually no chance of such a deal being done without a massive concession coming from Iran that it is impossible to see the current regime making. “Nothing has changed in the past few months from when the U.S. decided that Iran was just trying to buy time for its nuclear weapons development program by continuing to submit new clauses to the text of the new version of the JCPOA agreement,” a senior energy source who worked closely with Iran’s Petroleum Ministry said  “And Washington has told everyone else in the P5+1 group [the U.S., the U.K., France, China, and Russia ‘plus’ Germany] that it will not budge from its position on the IRGC, which is aimed – as Iran knows – at destroying the IRGC’s influence, and by extension Iran’s influence – in the world,” he said. “As far as the U.S. is concerned, everything is now focused on ensuring that Iran does not get the three months it needs to finish the guidance systems it requires, with the help of Russia, to deliver weapons-grade nuclear material in the missiles it already has,” he added. A cementing of the U.S. view that “we are not going to change a single word or add a single comma in the current draft [of the new version of the JCPOA] on the table” – quoted a senior European Union energy source.  Do not underestimate the concern abut the August 9th  launch of Iran’s ‘Khayyam’ satellite, built almost entirely by Russia and powered into orbit from the Russia-controlled Baikonur cosmodrome in Kazakhstan. According to Iran, the satellite will be “used to monitor Iran’s borders and improve the country’s capabilities in management and planning in the fields of agriculture, natural resources, environment, mining, and natural disasters.” According to the U.S., the satellite is to be used for spying on its neighbors. The U.S. did hint at how serious it is when a State Department spokesman said last week of the Khayyam launch: “Russia deepening an alliance with Iran is something that the whole world should look at and see as a profound threat.” What the Khayyam satellite was launched for is to provide the final piece of the missile guidance systems that Russia and Iran have been working on for years – this one relating to improving the accuracy of missiles (by up to 25 percent for short- and medium-range missiles and by up to 70 percent for long-range missiles) according to the Iranian source. This latest advance by Iran in its quest to be able to deliver a fully functioning nuclear warhead to anywhere within a few-thousand-mile radius should come as no surprise, given that the same sponsor for North Korea’s nuclear program – China – is the key state sponsor of Iran, as analyzed in depth in my latest book on the global oil markets. After the landmark 25-year deal was struck in August 2019 between Iran and China – a story exclusively broken by me in September 2019, nearly two years before it was officially announced or reported on by anyone else – China (and Russia) gradually and quietly began to increase their cooperation on key elements of Iran’s nuclear weapons development program. In China’s case, the level of intermediation between middle-men connected to it and to North Korea and Iran was stepped up using a triangular system of technology supplies (from China to North Korea via middlemen, and then from North Korea to Iran), and payment principally in oil (from Iran to North Korea, with some also sent from Iran to China directly). Russia had agreed to take a back seat to China in Iran’s nuclear weapons program in the year or two after the 25-year China-Iran deal had actually been made (in August 2019), but shifted back to a front seat position from September 2021 (when it began to activate its plan to invade Ukraine), as China remains wary of overtly challenging the U.S. outside its own perceived area of influence in the Taiwan Strait. Iran and Russia still need two to three months to finalise its overall missile guidance system, although it already has a vast array of missiles already in place with varying range applications. This leaves the nuclear material itself for the warheads as the third element it needs to line up before it rates as a clear and present nuclear threat. According to the 30 May 2022 report by the International Atomic Energy Agency (IAEA): “Due to the growth of Iran’s 60 percent enriched uranium stocks, Iran has crossed a dangerous new threshold: its breakout timeline is now at zero. It has enough 60 percent enriched uranium, or highly enriched uranium [HEU] in the form of uranium hexafluoride [UF6] to be assured it could fashion directly a nuclear explosive. If Iran wanted to further enrich its 60 percent HEU up to 90 percent HEU, typically called weapon-grade uranium [WGU], used in Iran’s known nuclear weapons designs, it could do so within weeks utilizing only a few advanced centrifuge cascades.” Given this, it could be argued that bringing Iran back into the fold of global diplomatic relations by agreeing to a new iteration of the nuclear deal might be the way forward. However, for Washington, it appears that an inflection point has been reached in the Oval Office over the JCPOA:  “We are not going to change a single word or add a single comma in the current draft [of the new version of the JCPOA] on the table.” The only thing that the U.S. will now accept from Iran is – in essence – the neutering of the Islamic Revolutionary Guards Corps (IRGC), which it is seeking to do via Iran signing up to the regulations of the Financial Action Task Force (FATF) and then to becoming a fully-regulated and constantly-monitored FATF member.  With its 40 active criteria and mechanisms in place to prevent money laundering (an activity that is vital to the IRGC’s activities across the world) and nine criteria and mechanisms in place to do the same for the financing of terrorism and related activities (a core of the IRGC’s role in promoting Iran’s brand of Islam around the globe), the FATF has swingeing powers to wield against individuals, companies, or countries who transgress any of its standards and is extremely aggressive in using them by degrees, depending on whether the sanctioned entity is on its ‘grey’ or ‘black’ list. A sure sign of the U.S. has reached the end of the line regarding Iran is that – as of now – even if Iran does sign up to the FATF, Washington will not remove the designation of the IRGC as a ‘Foreign Terrorist Organisation’ (FTO) immediately, as it had promised a while ago, but will keep the damaging designation in place for at least two years, whereupon it will be reviewed,  This review will  assess whether all Iranian military and intelligence elements of influence have been removed from several countries, including Iraq, Syria, Lebanon, Yemen, Afghanistan, and Pakistan, or Iran fails the review anyway. NN: The oil market has priced in a Iranian deal that will ha ha ha provide the market with a badly needed 1.5 MBD of desperately needed oil… That is NEVER going to happen and their will be no Iranian deal. And if their was one it would takes years to produce that amount of oil. .I am so negative on oil prices going down…. Its not going to happen and $150 a barrel oil here we come….

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Housing crash started……. They are always first in line! You got 90 days at best to get out!

It never ceases to amaze me that people cannot accept the fact that residential real estate property can actually decline in price.  Sure, a lot of first-time buyers now are in their thirties which means that during our last crash which occurred around 2006 to 2008, they may have been just 15 years old. So, I’m sure they weren’t paying attention to real estate values back then. In most markets over the last two years on average residential real estate prices increased by over 25% a year!, if there was ever a prime example of the irrational exuberance in the real estate market. It seems that a lot of these first-time buyers just cannot accept the fact that the residential real estate market has hit a ceiling and has now taken 180 degree turn toward the downside. Facts are facts oh, and there can be no doubt that this Market and the huge housing bubble that was created has now burst.  Because the average escrow can run between 45 to 60 days, many areas are still reporting increasing housing prices. But, don’t be fooled by this wagging indicator. These same areas are also showing huge price drops on listed properties as well as increased inventories of homes for sale. The sales price drops will follow, and we should see those within about 60 days.  Once the sales price drops are reported the  downward trend and property values will have been well underway. NN: I cannot think of a more interest rate sensitive market. Or one that has wiped out more often in a recession……. Fuck with real estate and your flirting with disaster. You have a 90 day window at best to finish up your projects and liquidate all the real estate you can… Let the dreamers and deniers take the risk!!! DO NOT GET GREEDY…

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S. Korea’s COVID-related deaths touch 3-month high

S. Korea’s New COVID-19 Cases Soar to 4-month High of Over 180,000

SEOUL, Aug. 17 (Korea Bizwire) — South Korea’s new COVID-19 cases jumped to a four-month high on Wednesday following the extended weekend amid the continued spread of a highly contagious omicron subvariant. The country added 180,803 new COVID-19 infections, including 567 cases from overseas, bringing the total caseload to 21,682,816, according to the Korea Disease Control and Prevention Agency (KDCA). It is the highest figure since April 13, when the daily tally came to 195,387 amid the worst virus wave. Wednesday’s figure also more than doubled from the previous day’s 84,128 cases. It is also about 20 percent larger than the 151,792 infections logged a week earlier. “An increase in travelers in the summer vacation season and the recent extended Liberation Day holiday are expected to have an impact (on infection tallies) this week,” Kim Sung-ho, the head of the interior ministry’s disaster management office, said during a government COVID-19 response meeting. New daily infections had hovered below the 100,000 level on Monday and Tuesday for the first time in a week due mainly to fewer tests over the extended weekend that included the Aug. 15 Liberation Day. On Wednesday, the country also reported 42 more COVID-19 deaths, bringing the total to 25,752, the KDCA said. The fatality rate stood at 0.12 percent. The number of critically ill patients came to 469, down from the previous day’s 563 cases, according to the KDCA. The number of imported cases has also risen markedly recently. Wednesday’s figure is the fifth largest daily tally ever, the KDCA said.

A citizen undergoes a COVID-19 test at a makeshift testing station in Seoul on Aug. 17, 2022. (Yonhap)

South Korea has seen another virus wave since July driven by the fast spread of the omicron subvariant BA.5 and the government’s lifting of virus curbs.

BA.5 accounted for 87.9 percent of total infections last week, up 11.6 percentage points from a week earlier, the KDCA said. It became the dominant variant in South Korea in the fourth week of July. The KDC has said that new infections are expected to peak at around 200,000 this month before shrinking at a slower pace, though the situation could change in line with potential impacts of the summer vacation season, weather conditions, and other factors. The number of critical cases could also surge to over 900 early next month, and the daily death toll could reach as high as 140, the health authorities said. To better protect high-risk groups, the government will bring in 50,000 additional doses of MSD’s Lagevrio oral pill. So far, 100,000 doses were brought in under the contract of buying a total of 242,000 doses of the antiviral pill. In March, the authorities began administering Lagevrio for patients with underlying illnesses or symptoms that prevented them from taking Pfizer’s Paxlovid or other treatment pills, and some 40,000 doses have been administered so far. NN: Do not be lulled to sleep. Our vaccines are wearing off. Everyone has let their guard down… Little testing, no quarantining of note, no masks and no travel restrictions. And the flying disease incubators and disease spreading machines are chock full of maskless untested and unvaccinated people….  How do you think this is going to turn out,  We are courting disaster come the fall covid next wave;;;;;;;

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Hedge funds pile up $125 billion bet against the S&P 500’s big summer rally

A more than $125 billion institutional short position has been building up against the U.S. stock market, driven by hedge funds, according to BNP Paribas. Futures contract data points to a sharp increase in the amount of bets against the S&P 500 index SPX, -1.29% in recent months, even though the stock-market gauge has climbed nearly 17% from its mid-June low when it tipped into a bear market. Greg Boutle, head of U.S. equity derivatives strategy at BNP, said positioning has “remained defensive,” in a client note this week, which highlighted the growing short position (see chart) against the stock market.

Institutional money is lining up to short the stock market

BNP Paribas, Bloomberg, CFTC data

Boutle said that despite signs of U.S. inflation cooling from 40-year highs, it likely would take “a larger and more persistent improvement in the macro outlook, to drive a larger scale reallocation of institutional money back into equities.” The S&P 500’s sharp climb has hit resistance this week as the benchmark approached its key 200-day moving average. “At this point, after the 17% rally, all the energy is gone to push higher.”  (NN bit:  Please recall  a rare Sunday night streaming TV show. I declared in the NASDAQ 100 a top at 13700,  with great confidence i recommended everyone into the pool) said Keith Lerner, co-chief investment officer at Truist Advisory Services, by phone. “But there could be a pain trade, if the market breaks out of short-term consolidation.” Still, any breakout higher likely would be short-lived, he said, given high stock-market valuations and expectations for further global tightening of financial conditions. Federal Reserve Bank of St. Louis President James Bullard said Thursday he may support another large interest rate rise at the central bank’s Sept. 20-21 policy meeting.  More broadly, fund flows also show significant interest in “short-biased” investing in roughly the past three months, according to Refinitiv Lipper data.  As investors wrangle with questions about the durability of the U.S. economy as the Federal Reserve raises rates, billions have poured into funds (see chart) that consistently create a “net short” exposure to the overall market. July saw about $3.2 billion of inflows to Lipper dedicated short-biased funds, the largest monthly intake since April 2022 U.S. diversified equity funds returned an average of negative 14.2% on the year through Aug. 4, according to Refinitiv Lipper, but its dedicated short-biased funds were up 8.8% for the same stretch, when excluding those classified as focused on commodities. “The debate can continue whether or not we are in a recession, but what we can see is that there is both growing demand and supply for exposure betting against the overall market,” Fischer wrote, in a recent client note. NN: I am all in shorting this market. We are entering a deep dark recession/depression. And i want protection for us. The proven way i have done this over and over again is to short the coming appocolus.

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Producer prices in Germany rise 32.7% in July

German Producer Prices Post Highest Increase on Record

Germany’s producer prices rose strongly in July, driven by higher energy prices, posting the biggest increase ever recorded, the German statistics office Destatis said. Producer prices rose 37.2% on year in July, the German statistics office Destatis said Friday. This follows a 32.7% increase in June and a 33.6% rise in May. Compared with the preceding month, the producer prices index rose 5.3% in July, also the biggest month-on-month increase ever recorded. Energy prices rose 105.0% from a year earlier, Destatis said. Strong gains in the price of natural gas, up 163.8% on year, as well as a 125.4% increase in the prices of electricity, were major factors behind the increase, it said. The producer price index excluding energy rose 14.6% on year, according to Destatis. Prices of intermediate goods increased 19.1% from a year earlier. Significant price increases were recorded by metals, which were 24.1% up on July, Destatis said. Prices of nondurable consumer goods increased by 16.2% on year, prices of durable consumer goods rose 10.9% and capital-goods prices increased by 8.0%, Destatis’ data showed. NN: Holy shit batman!



Write to Maria Martinez at maria.martinez@wsj.com

















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Equity markets are too enthusiastic about upcoming Fed moves, says former KC Fed president
	


	
	

		








“We should continue to move quickly towards a level of key rates that will exert significant downward pressure on inflation,” said the chairman of the Federal Reserve of St. Louis. A US central bank (Fed) official said on Thursday that another sharp rate hike seems necessary at the September meeting, as inflation is still very high and will take time to slow.




“I’m leaning at this point, towards 75 basis points”, or three-quarters of a percentage point, as in previous meetings, mid-June and end-July, said in an interview with the Wall Street Journal the president of the regional branch of the St Louis Fed, James Bullard, known for his positions in favor of a restrictive monetary policy. “We should continue to move quickly towards a level of key rates that will exert significant downward pressure on inflation,” said the official, who is among the voters this year on the Monetary Policy Committee (FOMC), a body responsible for Fed decision. In other words, according to him, the Fed must continue, during its next meetings, to make strong increases in rates, until it reaches the range of 3.75-4.00% by the end of the year. “We have relatively good economic data, and very high inflation, so I think it would make sense to keep raising the key rate and into restrictive territory,” he said. “I don’t really see why you want to drag out interest rate hikes next year” instead of doing them in 2022, Bullard added. He stressed that he was not certain that inflation had peaked, despite the slowdown seen in July, and predicted a process of about 18 months to bring price pressures back to the Fed’s 2% target, with a trajectory probably jagged.


“The idea that inflation has peaked is hopeful, but it’s not really, statistically, in the data at this point,” said James Bullard.


He also anticipates growth in the second half, as the economy contracted in the first six months of the year, and believes the labor market will also remain robust. The minutes of the last meeting of the Fed, published on Wednesday, revealed the intention of the monetary committee to continue the rate hikes, while evoking the “risk that (the Fed) could tighten its policy more than necessary”. NN: The Fed is going to hose down this red hot economy. With further rate increases until it drives down real estate, stock market and the economy overall….. They have no choice its the only way to beat  now embedded inflated out of the system.





	


	





		

		
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Rate hikes to stop when inflation on way down – Fed’s George
	


	
	

		






 




























(Reuters) -The recent easing of U.S. financial conditions, including a surge in stock prices, may have been based on an overly optimistic sense that inflation was peaking and the pace of interest rate increases was likely to slow, Kansas City Federal Reserve President Esther George said on Thursday. In comments to a Kansas City economic group, George said the pace and ultimate level of future rate hikes remained a matter of debate. “To know where that stopping point is … we are going to have to be completely convinced that (inflation) number is coming down,” she said. George did not state a preference for whether the Fed should approve a third straight 75 basis point rate increase when policymakers meet next month, or a smaller half point increase – the two core options under consideration.


But she made clear that the drop in inflation registered in July, while good news, was not evidence the underlying problem was fixed. Much of the decline was related to energy costs, she noted, while prices for a broad set of other services and goods continued to increase.


“That is hardly comforting,” she said. And recent “abysmal” productivity numbers, which imply that workers are producing less for each dollar they are paid, could make controlling inflation that much harder, she added.




























 





	


	





		

		
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Housing market enters a recession
	


	
	

		


The housing cycle—which began its upward climb in 2011—has officially turned over. Simply put: We’ve moved into a housing recession.  Homebuilders broke ground on 982,000 single-family homes in June. That’s down 19% since February, and down 16% from the same month in 2021. While it’s hardly a “blow out,” it’s clear builders are cutting back. Historically speaking, that’s exactly what happens when a housing cycle turns over: As existing home inventory—which builders compete against—begins to spike, homebuilders start to cut back. “Peak euphoria is behind us. We are giving back some of the euphoria [home] pricing that was rolling over every housing market,” says Rick Palacios Jr., head of research at John Burns Real Estate Consulting. Existing home inventory will continue to rise, and homebuilding will continue to slow. At least that’s the view at John Burns Real Estate Consulting, which does consulting work for both builders and investors. As it does, the ongoing housing recession (i.e. a contracting housing market) could push home prices lower in bubbly regional housing markets. Indeed, many bubbly markets, Palacios says, are barreling towards price cuts in both 2023 and 2024. That includes markets like Phoenix, Nashville, West Palm Beach, Las Vegas, and Austin. In Boise, Palacios says home prices could go negative on a year-over-year basis as soon as December. “Builders are already [deciding] to not pour slabs in certain markets. Which is the technical trigger for a start for a home. In certain markets it will feel like [a housing bust],” Palacios says. Soon after mortgage rates spiked this spring, the housing market slipped into a “housing correction.” It’s easy to see how those higher rates priced out many would-be buyers. If a borrower in December took out a $500,000 mortgage at a 3.1% rate, they’d owe a monthly principal and interest payment of $2,135. If a borrower took out a $500,000 mortgage at today’s average 30-year fixed mortgage rate (5.51%), they’d get a $2,839 payment. NN: My bellwether…. I have been screaming recession Recession RECESSION……. 2 quarters of negative GDP.. You cannot have a depression (already a recession)  without a stock market crash and real estate wipeput. We are well on the way to all three.

	


	





		

		
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Tightening will ‘tap breaks’ on economy – Fed’s Kashkari
	


	
	

		
This ASSHOLE 9 months ago was calling inflation temporary. Now he is talking about “tapping” the breaks…. Try brace yourself for anti lock break deployment as the economy goes through the guard rail and off a cliff……. listen for yourself!!






Federal Reserve Bank of Minneapolis President Neel Kashkari stated on Thursday that the central bank’s continuing tightening of key interest rates will “tap breaks on the economy.”  NB: a pigs ass. Try driving the US economy into a massive inflation/depression. Answering questions at the Young Presidents Organization Gold Twin Cities luncheon, he reiterated that inflation needs to be tamed “urgently,” and that although the Fed knows how to reach its 2% target goal, he is unsure whether the central bank can achieve this without pushing the economy into a recession. Kashkari further noted that the labor supply potential “is more or less fixed” and that the focus now needs to be on getting “the demand down.” NN: their is only one way to get demand down… And that is with a full blown depression…. And they damn well know it…