Todays CPE & JP at Jackson Hole (Patreon)

Hi Team

Re today the markets got smashed.  I mentioned in yesterday's video that PCE would be flat or better than expectations - and it was better than expected. I also felt JP would be dovish as a result.  He was not. 

His stark words today, "there will be pain" really rattled the markets. It will not stop me from sticking to my thesis, which I will spell out once more as folks thought today was a pivot.

• Pivot does not happen until the Fed Mtg in Sept 
• Pivot is a change of course, like a slowing in hikes ie from 75bps (the last two) to 50 or less
• Today was a talk and not a Fed Mtg. 
• My thesis remains.... max 100 bps more -  50 bps in Sep, 25 and then a final 25.  Cuts will begin in 2023. 
• The FFR needs to top out at 3.5% - any more and he will destroy all markets. 
• This is an election year, and all incumbents are in a world of hurt unless things radically change before Nov. JP knows this. 
• JP cannot do a Volker - when Volker did what he did Debt:GDP was 30%. Now it is 130%. 
• Economy is grinding to a halt
• We are beyond peak inflation
• Demand destruction is in full swing
• Unemployment is rising fast (but the data anyhow is BS like CPI)

An armageddon option is an option for JP but it is a low probability option.  I assume smarter financial minds will prevail.  I was pleased to find this week my former finance professor subscribes to my thesis - so hope he is right :D 

I deployed today as a result. 

August is historically a low volume month and susceptible to fluctuations as a result. We are seeing that right now. For perspective, BTC was 20% higher 10 days ago than it is now. Buckle in everyone.