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2 Charts: A Closer Look At The Fed's "Reverse Socialism"

Takeaway: "Thank God for the Federal Reserve and all its reverse socialism, otherwise where would income inequality be without it."

2 Charts: A Closer Look At The Fed's "Reverse Socialism" - Fed Up cartoon 03.22.2016

 

In a bizzarely tangential exchange yesterday between Republican Representative Scott Garrett and Fed head Janet Yellen, Garrett accused Yellen of lining Wall Street pockets and worsening income inequality.

 

“Why do you see a need to benefit Goldman Sachs?” Garrett asked.

“I’m sorry, we are not trying to benefit the rich,” Ms. Yellen responded, reiterating that, since the recession ended in 2009, 14 million new jobs have been created.

“Excuse me, I have the floor,” Mr. Garrett interrupted irrately.

 

Garrett didn't press the Fed chair and veered off in another direction entirely but, despite his opportunistic invocation of populism, the Congressman's point is taken. 

 

"Thank God for the Federal Reserve and all its reverse socialism, otherwise where would income inequality be without it," Hedgeye Senior Macro analyst Darius Dale wrote wryly yesterday, in response to a Wall Street Journal article that showed a significant rise in upper-middle class wealth. Unsurprisingly, middle and lower class family wealth has stagnated or declined.

 

As you can see in Dale's charts below, the Fed's easy money has actively promoted this trend:

 

Click images to enlarge 

2 Charts: A Closer Look At The Fed's "Reverse Socialism" - darius chart 6 23

 

2 Charts: A Closer Look At The Fed's "Reverse Socialism" - darius chart 6 23  2

 

It's a truly sad outcome.

And yet more proof of the Fed's flawed policies.


Daily Market Data Dump: Thursday

Takeaway: A closer look at global macro market developments.

Editor's Note: Below are complimentary charts highlighting global equity market developments, S&P 500 sector performance, volume on U.S. stock exchanges, and rates and bond spreads. It's on the house. For more information on how Hedgeye can help you better understand the markets and economy (and stay ahead of consensus) check out our array of investing products

 

CLICK TO ENLARGE

 

Daily Market Data Dump: Thursday - equity markets 6 23

 

Daily Market Data Dump: Thursday - sector performance 6 23

 

Daily Market Data Dump: Thursday - volume 6 23

 

Daily Market Data Dump: Thursday - rates and spreads 6 23

 

Daily Market Data Dump: Thursday - currencies 6 23


McCullough: Chasing European Stocks? Don't Look At This Sobering Data

Takeaway: Investors buying the pop in European equities will have deal with unequivocally bearish data that doesn't go away post today's Brexit vote.

McCullough: Chasing European Stocks? Don't Look At This Sobering Data - eu ref 

 

I guess no Brexit was the 2016 Global Equity bull market catalyst all along!

 

The pound tapped $1.49 this morning and that’s one mother of a move in the context of where GBP/USD has been for the last 6 months – on my immediate-term signal, that’s pricing in a triple-no-exit! I’m going into this with no FX position (sorry, can’t build my research firm on coin tosses) other than long Gold (risk range 1253-1306/oz).

 

 

Meanwhile, the FTSE is up +1.4% to 6349 with a refreshed immediate-term risk range of 5819-6403 so the asymmetry from here is to the downside; same thing with the DAX on a risk range of 9370-10331 – if they leave, many Global Equity markets will resume their draw-downs (and crashes) from their 2015 cycle peaks – if they remain, they probably sell on the news anyway.

 

Here's the unequivocally bearish data that doesn't go away post today's Brexit vote:

 

 

And imagine what happens to these stock market chasers if they vote to leave? No blaming machines...

 


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CHART OF THE DAY: Brexit: 'Brits Don't Quit!'

Editor's Note: Below is an excerpt and chart from today's Early Look written by Hedgeye Director Matthew Hedrick. Click here to learn more.

 

"... But will Brits actually vote themselves out of the EU?  We’ll reiterate here that we expect the Remain camp to prevail, but as the aggregate “Poll of Polls” below shows, it’s a split race (50/50).  In addition, recent results of individual polls show there’s a very sizable number of undecided voters, representing some 6% to 13%, depending on the poll, who we think will tip the balance marginally to Remain."

 

CHART OF THE DAY: Brexit: 'Brits Don't Quit!' - Brexit EL 1


Cartoon of the Day: Enough Already!

Cartoon of the Day: Enough Already! - Brexit cartoon 06.23.2016

 

It's nauseating how much the mainstream media talks about Thursday's U.K. referendum.


Fact Versus Fiction: Dispelling The Fallacy That Everyone Is Bearish

Takeaway: The most consensus position in macro right now is actually long the S&P 500.

Fact Versus Fiction: Dispelling The Fallacy That Everyone Is Bearish - consensus cartoon 06.21.2016

 

Consensus is as long the S&P 500 as they have been all year.

 

Here’s what Consensus Macro positioning looks like from a CFTC futures and options perspective:

 

  • SP500 (Index + E-mini) net LONG position of +117,566 contracts = +2.63x 1YR z-score

 

For those of you who are new to following us, we measure current macro positioning across multiple durations relative to where the positioning has been in the past. Anything plus or minus 2x tends to be a great contrarian indicator.

 

Fact Versus Fiction: Dispelling The Fallacy That Everyone Is Bearish - macro show consensus pos

 

Watch Hedgeye CEO Keith McCullough explain consensus positioning in the video below:

 


Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.32%
  • SHORT SIGNALS 78.48%
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