The stuff that no one else is mentioning thread

[vand]

I get it, everyone just looks at major indexes and big stocks.  Here's a thread for what no one else is mentioning.  Because, hey, today's back pages are tomorrow's headlines.


Here's a starter for ten...

The Russell 2000 just officially entered bear market, peaking on 25th Nov at 2449, now sitting 22% lower at 1910.

https://www.cnbc.com/2025/04/03/small-cap-benchmark-russell-2000-becomes-first-major-us-stock-measure-to-enter-bear-market.html

[bthewalls]

It’s def getting there……I wonder were it’ll be next week

[GilesMM]

I hope nobody bought only at the peak. Compared to a year ago, it is down about 12%. Over longer periods it’s up.

[Much Fishing to Do]

Looks like S&p500 will be in a bear market by tomorrow's open. Crazy what can happen in 3 days.

[ChpBstrd]

Crazy what can happen in 3 days.

People are comparing this sudden-onset bear market to what happened in March/April 2020 due to COVID.

And that's really weird. After many false alarms (MERS, swine flu, bird flu, SARS...) COVID came out of the blue and started exponentially expanding. This sudden development threatened to devastate world GDP. It caught us all by surprise (well, not the epidemiologists, who we ignored).

Trump's tariffs, on the other hand, were THE key plank of his campaign since at least this time last year and a key part of Project 2025. Such tariffs promise to reduce world GDP, and might contribute to a US recession. How are we just now figuring this out?

The casualty seems to be Efficient Markets Hypothesis, because clearly the information that was available for many months was not priced into the stock market.

[theoverlook]

The casualty seems to be Efficient Markets Hypothesis, because clearly the information that was available for many months was not priced into the stock market.

Agreed! This is all stuff he said ahead of time that he was going to do. People voted for this, the stock market should have planned for it. And yet, here we are.

[vand]

JGBs yields have been on a rollercoaster, rising to decades highs shortly before beating a quick retreat amid all this market chaos.

https://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Bond&symb=BX%3ATMBMKJP-10Y&x=57&y=9&time=20&startdate=1%2F4%2F1999&enddate=4%2F7%2F2025&freq=1&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=3&maval=89%2C233&uf=0&lf=1&lf2=2&lf3=4&type=64&style=340&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=15

One to keep an eye on... this is the sort of thing that nobody pays attention to but could have big ramifications if the prior rising trend is rerestablished.

[Tigerpine]

Crazy what can happen in 3 days.

Trump's tariffs, on the other hand, were THE key plank of his campaign since at least this time last year and a key part of Project 2025. Such tariffs promise to reduce world GDP, and might contribute to a US recession. How are we just now figuring this out?

The casualty seems to be Efficient Markets Hypothesis, because clearly the information that was available for many months was not priced into the stock market.

I guess a lot of investors took him "seriously but not literally."

[cl_noll]

I'm concerned that if self-inflicted contraction continues, this - coupled with the extraordinary run up in housing costs and the 6-7% loans associated with them - could cause defaults to skyrocket and trigger an economic collapse on par with 2007-08.

[ChpBstrd]

I'm concerned that if self-inflicted contraction continues, this - coupled with the extraordinary run up in housing costs and the 6-7% loans associated with them - could cause defaults to skyrocket and trigger an economic collapse on par with 2007-08.

Yep. Talk about stuff no one else is mentioning.

Even the expectation of a recession could (a) cause home buyers to pause their shopping due to fears of job loss, (b) cause home buyers to pause their shopping due to expectations of rapidly falling interest rates, (c) cause home buyers to pause their shopping due to expectations of falling house prices, or (d) prevent home buyers from buying because they invested their down payments and lost value.

So far, delinquencies on mortgages, credit cards, consumer loans, and business loans remain in the historically low-to-reasonable range. If unemployment rises, housing and office RE will be at risk of unraveling.

[bthewalls]

Chronic recession anyone?…..

[Daley]

Expanding AI use, White House orders agencies to develop strategies and name leaders

Keep this in mind moving forward, given it's been heavily suspected that AI chatbots were likely responsible for the Tariff calculations. Imagine the entire government run by Grok or ChatGPT.

[bthewalls]

Expanding AI use, White House orders agencies to develop strategies and name leaders

Keep this in mind moving forward, given it's been heavily suspected that AI chatbots were likely responsible for the Tariff calculations. Imagine the entire government run by Grok or ChatGPT.

I thought it already was….

[BicycleB]

JGBs yields have been on a rollercoaster, rising to decades highs shortly before beating a quick retreat amid all this market chaos.

https://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Bond&symb=BX%3ATMBMKJP-10Y&x=57&y=9&time=20&startdate=1%2F4%2F1999&enddate=4%2F7%2F2025&freq=1&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=3&maval=89%2C233&uf=0&lf=1&lf2=2&lf3=4&type=64&style=340&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=15

One to keep an eye on... this is the sort of thing that nobody pays attention to but could have big ramifications if the prior rising trend is rerestablished.

I put my eye on that chart (the top chart in the link, the one with a sort of U shape) and can't read it. Why aren't the axes labeled? What is this showing?

I am guessing that "JGB" is Japanese Government Bonds. Therefore I am guessing that the scale on the right hand side is interest rates, in annual percent. Are these guesses on track?

Is this chart in format that x is an independent variable, y is a dependent variable?

Is the x axis showing time going forward?

What dates are covered? A day? A year? The entire history of JGBs (if yes, how long is that)?

[Daley]

Expanding AI use, White House orders agencies to develop strategies and name leaders

Keep this in mind moving forward, given it's been heavily suspected that AI chatbots were likely responsible for the Tariff calculations. Imagine the entire government run by Grok or ChatGPT.

I thought it already was….

Touché!

[AuspiciousEight]

I'm concerned Trump is going to push the tariffs until the pain is very evident in society, in terms of high inflation and high unemployment, and only then pull back the tariffs and negotiate a 'trade deal" that looks oddly similar to what was in place before the tariffs were added, then parade around about how much we won.

The problem is, the way Trump operates he doesn't change course until pain is very obvious, but by the time the economic pain is obvious we will already be in a serious recession, and it will simply continue snow balling down afterwards.

We will recover eventually, of course, but the economic damage will be long lasting and more than Trump intended.

Hopefully I'm wrong...

[vand]

JGBs yields have been on a rollercoaster, rising to decades highs shortly before beating a quick retreat amid all this market chaos.

https://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Bond&symb=BX%3ATMBMKJP-10Y&x=57&y=9&time=20&startdate=1%2F4%2F1999&enddate=4%2F7%2F2025&freq=1&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=3&maval=89%2C233&uf=0&lf=1&lf2=2&lf3=4&type=64&style=340&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=15

One to keep an eye on... this is the sort of thing that nobody pays attention to but could have big ramifications if the prior rising trend is rerestablished.

I put my eye on that chart (the top chart in the link, the one with a sort of U shape) and can't read it. Why aren't the axes labeled? What is this showing?

I am guessing that "JGB" is Japanese Government Bonds. Therefore I am guessing that the scale on the right hand side is interest rates, in annual percent. Are these guesses on track?

Is this chart in format that x is an independent variable, y is a dependent variable?

Is the x axis showing time going forward?

What dates are covered? A day? A year? The entire history of JGBs (if yes, how long is that)?

Yes, JPY govt bond yields. Time in years along x axis, yield in % along vertical axis. Pretty standard stuff.

[vand]

This is the most interesting chart in macro at the moment imo - the now firmly established bear market in stocks when priced in gold.



Realistic short/mid term target should be 1:1, so gold and S&P at parity.

[BrandonP]

I'm concerned Trump is going to push the tariffs until the pain is very evident in society, in terms of high inflation and high unemployment, and only then pull back the tariffs and negotiate a 'trade deal" that looks oddly similar to what was in place before the tariffs were added, then parade around about how much we won.

The problem is, the way Trump operates he doesn't change course until pain is very obvious, but by the time the economic pain is obvious we will already be in a serious recession, and it will simply continue snow balling down afterwards.

We will recover eventually, of course, but the economic damage will be long lasting and more than Trump intended.

Hopefully I'm wrong...

This looks entirely plausible at the moment. Unfortunately.

[SilentC]

I'm concerned that if self-inflicted contraction continues, this - coupled with the extraordinary run up in housing costs and the 6-7% loans associated with them - could cause defaults to skyrocket and trigger an economic collapse on par with 2007-08.

Yep. Talk about stuff no one else is mentioning.

Even the expectation of a recession could (a) cause home buyers to pause their shopping due to fears of job loss, (b) cause home buyers to pause their shopping due to expectations of rapidly falling interest rates, (c) cause home buyers to pause their shopping due to expectations of falling house prices, or (d) prevent home buyers from buying because they invested their down payments and lost value.

So far, delinquencies on mortgages, credit cards, consumer loans, and business loans remain in the historically low-to-reasonable range. If unemployment rises, housing and office RE will be at risk of unraveling.

We stopped looking for houses after the tariff announcement last week. There are more interesting ways to invest now. Lo and behold, on an offer we made six weeks ago where we were 3% apart in price, the seller agent reached back out now happy with our offer.  We passed.

I also see a lot of privately held businesses taking a “wait and see” approach and doing some tariff pre-buying and de-stocking of US made goods.  Should be an interesting 2Q25 earnings read out.

[BicycleB]

JGBs yields have been on a rollercoaster, rising to decades highs shortly before beating a quick retreat amid all this market chaos.

https://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Bond&symb=BX%3ATMBMKJP-10Y&x=57&y=9&time=20&startdate=1%2F4%2F1999&enddate=4%2F7%2F2025&freq=1&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=3&maval=89%2C233&uf=0&lf=1&lf2=2&lf3=4&type=64&style=340&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=15

One to keep an eye on... this is the sort of thing that nobody pays attention to but could have big ramifications if the prior rising trend is rerestablished.

I put my eye on that chart (the top chart in the link, the one with a sort of U shape) and can't read it. Why aren't the axes labeled? What is this showing?

I am guessing that "JGB" is Japanese Government Bonds. Therefore I am guessing that the scale on the right hand side is interest rates, in annual percent. Are these guesses on track?

Is this chart in format that x is an independent variable, y is a dependent variable?

Is the x axis showing time going forward?

What dates are covered? A day? A year? The entire history of JGBs (if yes, how long is that)?

Yes, JPY govt bond yields. Time in years along x axis, yield in % along vertical axis. Pretty standard stuff.

Thanks, @vand.

Ah - what is the "standard" number of years in this graph?

(If the years are labeled in some way, I don't see it. Settings at the left just appear give timeframe data as "all".)

[vand]

I don't know if it qualifies as "no one else talking about it" but the dollar is has taken another big lurch down over the last couple of days. DXY testing some support levels just below 100

[habanero]

Thanks, @vand.

Ah - what is the "standard" number of years in this graph?

(If the years are labeled in some way, I don't see it. Settings at the left just appear give timeframe data as "all".)

Based on (another) graph of 10y JBG yields the graph looks to start ca 2005 so should be a 20y history in the link.

Here's one starting 1 jan 1995 attached.

[habanero]

For understandig how markets work (and fail) its worh to read up on the repo market. Someone once coined it "the most important market in the world that almost noone has heard of". This, along with FX swaps markets is truly the boiler room of global financial markets. Vast amounts of funding, lending and leveraging takes place in repo markets where cash is exchanged for bonds as collateral.

I remember doing some repo prior to the financial crisis, not knowing the true importance of this market - for us it was barely a side business at the time and we got paid a bit extra for our excess liquidity in exchange for collateral relative to unsecured lending so a win-win in that respect. When tings got shaky we stopped lending cash for collateral to US investment banks and just minutes after we tured 'em down in repo trades very senior folks from said banks was on the phone to us assuring they were in tip top shape etc. Not being able to fund securities holdings in the repo markets was one of the factors that brought Lehman Brothers down. Read for example here

https://www.richmondfed.org/publications/research/econ_focus/2020/q1/federal_reserve

[BicycleB]

Thanks, @vand.

Ah - what is the "standard" number of years in this graph?

(If the years are labeled in some way, I don't see it. Settings at the left just appear give timeframe data as "all".)

Based on (another) graph of 10y JBG yields the graph looks to start ca 2005 so should be a 20y history in the link.

Here's one starting 1 jan 1995 attached.

Thanks, @habanero!

[svosavvy]

Here is something: this could be nothing or a figment of my overactive imagination.  This last week we have been receiving our presidential pep talks about 12:30pm eastern time just when the tape starts to look tired and want to roll over, "be cool" notwithstanding.  One of the historical hallmarks of bear markets is sell the news.  When positive news enters the market we get the initial pop for a bit then it gets sold off.  Often after lunch time in a bear market is generally when things can get nasty and limp into the close.  Not that it can't get nasty any time of the day.  We had the obvious big one last week, but, successive injections have been seemingly losing their potency.  There could potentially come a time here where a bullish jawboning could get sold off hard.  Or not who knows.  I just know these lunchtime cheerleading sessions seem to be getting long in the tooth. jmho.

[vand]

Thanks, @vand.

Ah - what is the "standard" number of years in this graph?

(If the years are labeled in some way, I don't see it. Settings at the left just appear give timeframe data as "all".)

Based on (another) graph of 10y JBG yields the graph looks to start ca 2005 so should be a 20y history in the link.

Here's one starting 1 jan 1995 attached.

thanks for the clearer chart.

To expand on the Japanese macro situation... believe it or not, the economy that has for so long been associated with the "evils of deflation" has now gone the other way and has one of the highest inflation rates amongst developed economies at the moment.

https://www.investing.com/economic-calendar/national-cpi-992
https://www.msn.com/en-us/money/markets/japan-inflation-probably-accelerated-in-march-on-rice-price-rise-reuters-poll/ar-AA1CIilA

If you thought deflation was bad for the Japanese, wait until you see what the opposite of inflation does to them.

[vand]

The Dollar is the thing to watch here.

Down 11% so far, and showing little signs of finding any support.

The orthodoxy accepted by virtually everyone with a hint of macro inclination was that when there was risk-off in capital markets the dollar would act as the default safe-haven to flock to, being the global reserve currency.  Once again it seems that orthodoxy is being turned on its head.

[habanero]

The Dollar is the thing to watch here.

Down 11% so far, and showing little signs of finding any support.

The orthodoxy accepted by virtually everyone with a hint of macro inclination was that when there was risk-off in capital markets the dollar would act as the default safe-haven to flock to, being the global reserve currency.  Once again it seems that orthodoxy is being turned on its head.

Yeah, one comment I read a few days ago is that we are now witnessing the dollars loss of reserve status in real time.

[rocketpj]

The quiet part that nobody pays attention to most of the time is that many countries - Canada, Japan, China, France, Italy, Germany - are quietly but steadily unloading their holdings of US Treasury bills.

One of the first things Mark Carney (the current Prime Minister of Canada and former governor of the Bank of Canada and Bank of England) did after taking office was to issue a large, multibillion bond in $USD.  Otherwise known as shorting the US dollar (borrow in a currency, then spend that money to buy in another currency).  Another thing he did was initiate a slow but steady selloff of US bonds to reduce Canada's exposure to the self-inflicted US cataclysm - and he went and met with all those other leaders to talk about exactly that process.

Right now all the other holders of US bonds - pensions, hedge funds, foreign governments - are eyeing each other nervously and unloading bonds as quickly as they can without triggering a panic.  Nobody wants to be the last to panic and lose everything, all of them can see that putting a complete economic simpleton in charge of the US economy is suicide.  So they are clearing out in a so-far orderly fashion.  But clearing out is what is happening.  Parallel to that is a clearing out of US dollar holdings in general.

The next thing to happen will be the federal reserve having to 'buy' US bonds to fund the US government deficit (and the huge tax cuts for the rich).  Which in practice will mean that they are printing even more money than they do most years.  In past years, other countries, hedge funds and the rest bought at least most of the bonds.  Watch for nobody to be interested over the coming months, and the Fed to have to paper over that by simply creating more money.

Back in February I  rebalanced my investments and ended up selling quite a but of US indices.  I now regret not selling all of them.

I will predict right now that when the shoe drops and the bonds and/or dollar collapse, Trump and his sycophants will claim the US is being attacked by enemies and traitors.  Because accepting the blame for something they have 100% created is just outside the realm of possibility.

[Telecaster]

The next thing to happen will be the federal reserve having to 'buy' US bonds to fund the US government deficit (and the huge tax cuts for the rich).  Which in practice will mean that they are printing even more money than they do most years.  In past years, other countries, hedge funds and the rest bought at least most of the bonds.  Watch for nobody to be interested over the coming months, and the Fed to have to paper over that by simply creating more money.

Somewhat counter-intuitively, government borrowing actually creates the demand for bonds.   Each month the government cuts checks for all kinds of things from defense to roads, and it doesn't have all the money to pay for it, yet everyone still deposits the checks which shows up as a credit in their accounts.   That's the moment when money is created, and no one consults the Treasury or the Fed.  It just magically appears.    So what do the bankers do with all the money in their banks?   They buy bonds with it.   

[rocketpj]

  So what do the bankers do with all the money in their banks?   They buy bonds with it.

That was the received wisdom of the last few decades, certainly.  Because they had certainty in the value of the $USD and the T-Bill.  I don't see that happening in the future if Trump continues his wrecking ball approach to the US economy.

[ChpBstrd]

  So what do the bankers do with all the money in their banks?   They buy bonds with it.

That was the received wisdom of the last few decades, certainly.  Because they had certainty in the value of the $USD and the T-Bill.  I don't see that happening in the future if Trump continues his wrecking ball approach to the US economy.

They don't have that many other options to earn a spread on deposits. They could make more loans, taking on risk and imperiling their ratios. They could buy instruments that hold and hedge foreign currencies. But yea, that's about it. All the people cashing out their stocks and putting the money in bank accounts and CDs are just feeding the bond market.