Kass: Tops Are Processes & We May Be In That Process
The Yield Curve Will Likely Invert by November, 2018
- Economic growth is less synchronized than the consensus believes
- On a trending and rate of change basis the economic data is slowing down
- The Fed’s continued pivot to tighter money will likely lead to curve inversion – which will likely stoke fears of recession
“China, Europe and the Emerging Market Economic Data All Signal Slowdown: It’s in the early innings of such a slowdown based on any realtime analysis of the economic data. The rate of change slowdown (on a trending basis) is as clear as day. A rising US Dollar and weakening emerging market economic growth sows the seeds of a possible US dollar funding crisis.” – Kass Diary, Investors are Not Being Compensated For Risk
At economic peaks everything on the surface looks Rosy (except to some observors like myself and Rosie (David Rosenberg)!) – until it doesn’t.
Towards that end, here is what I wrote yesterday about US and overseas economic growth in my two part opener:
“Global Growth Is Less Synchronized as the trajectory of worldwide growth is becoming more ambiguous. I have featured the erosion in soft and hard high frequency data in the US, Europe, China and elsewhere extensively in my Diary – so I wont clutter this missive with too many charts. But needless to say (and seen by these charts and here), with economic surprises moderating from a year ago and in the case of Europe falling to two year lows – we are likely at ‘Peak Global Growth’ now. (The data is even worse in South Korea, Taiwan, Indonesia and Thailand).
…click on the above link to read the rest of the article…
