🟪 Misdirection

CEOs are rapidly losing confidence in their businesses. The stock market may already be looking through current inflation and seeing lower rates ahead. And economists, famous predictors of 11 of the last 6 recessions, are increasingly predicting another one.

View in browser Together with: Neal: He says we're going the wrong way… Del: Oh, he's drunk. How would he know where we're going?   — Planes, Trains and Automobiles Friday Misdirection Charts   Can we officially start worrying about a recession now? We've only just gotten started on rate hikes, but it already feels as though the Fed may be going in the wrong direction.   CEOs are rapidly losing confidence in their businesses. The stock market may already be looking through current inflation and seeing lower rates ahead. And economists, famous predictors of 11 of the last 6 recessions, are increasingly predicting another one.   The Fed remains committed to getting rates up in the hopes of getting inflation down. Are they driving us straight into oncoming traffic? Let's have a look at some charts to find out.   CEOs have gotten the memo: US corporations had a surprisingly great first half, but CEOs are taking their cue from the Fed, which has told them to knock it off. They probably will.   Investors have gotten the memo, too: Are things as bad as 2000 or 2008? An unscientific search of my memory says "no," but the Fed has convinced investors otherwise.   People will say anything in a survey, though, so here's some hard data: Rolex prices are falling. Nothing says excess liquidity like paying $16,000 for a $9,000 watch. Lower Rolex prices suggests there is less cash sloshing around.   Airbnb bookings are going in the other direction: More spending on travel and less on Rolexes should help rebalance supply chains, which is great news for the Fed.   House buyers have gotten the memo, as well: Mortgage applications are falling as higher prices and interest rates make housing increasingly unaffordable.   The money printer is slowing: Surging tax receipts (and lower spending) has taken the federal deficit from a peak of $4.1 trillion in March '21 down to $1.2 trillion in April '22.   Is the worst behind us then? The consensus expects inflation to decelerate to 3% by next year — which would be close enough to the official 2% target for the Fed to declare victory.   People may not be positioned for disinflation: Sentiment can only get better from here.   If so, there is money to be put to work: Asset managers have the most cash to spend since 2001.   Let's hope they change direction and start spending it soon.   Have a great weekend, backseat drivers. — Byron Gilliam P.S. — Find this newsletter helpful? Share it! Was this newsletter forwarded to you? Sign up here. Top Stories Every Top Cryptocurrency Is Down – Except Justin Sun's TRON — Blockworks Senators Draft Bill To Ban Use of Digital Yuan in US-Based Mobile Apps — Blockworks Binance Gains Regulatory Approval in Italy — Blockworks Latest in Crypto Hiring: Binance.US Doubles Down on Compliance — Blockworks TradFi Outsourced Trading Firm an Early Entrant to Crypto — Blockworks Stock-picking Vet Rolling Out Crypto Hedge Fund With Research-Heavy Approach — Blockworks Portuguese Parliament Holds Off Taxing Crypto Gains for Individuals — Blockworks Together with: BitMEX, the pioneer of crypto derivatives, has just launched BitMEX Spot for its users to buy and sell crypto. Now open for trading.  To celebrate, users will be entered into one of the biggest giveaways ever, with a grand prize pool of over $1,000,000 USD in crypto and prizes. One lucky winner will even get $500,000 USD in Bitcoin. All prizes are here. Come for the amazing offers - stay for BitMEX's sophisticated user experience, superior customer service, and quick trading execution.  To learn more, visit BitMEX's website here or follow them on Twitter and Telegram.*  We're Hosting Webinars How to invest according to crypto's shrinking market cap Date: Thursday, June 2 Register What's Trending How do stablecoins affect the "real" economy? (Continues) (Thread) — Jason Levin Sequoia Capital released a 52-page presentation, here are the 10 key takeaways every business owner must know: (Thread) — Alex Banks Two thought experiments to evaluate automated stablecoins: — Vitalik Buterin The Web3 & Blockchain Stack (Image) — Suhail Kakar  Deeper Data, Dune and Beyond: On-chain Analytics with Llama (Thread) — Llama 4 ways to earn yield on Arbitrum (Thread) — Blockworks Research We're Watching Where's the bottom, and when should we buy? How should founders approach the bear? Jason and Santiago discuss. Watch and subscribe on YouTube, Spotify or Apple Podcasts. *BitMEX products and services are not available to US Persons and in other specified jurisdictions. Was this email forwarded to you? Join over 140,000 investors who read this newsletter. Sign up for free. Update your email subscription preferences here. Written by @bgilliam1982 and @aaronhasapen. Follow us on Twitter, LinkedIn, YouTube and Instagram. Copyright ©2022 Blockworks. All rights reserved.