{"id":39128,"date":"2018-10-14T10:36:45","date_gmt":"2018-10-14T15:36:45","guid":{"rendered":"http:\/\/olduvai.ca\/?p=39128"},"modified":"2018-10-14T10:36:45","modified_gmt":"2018-10-14T15:36:45","slug":"yes-something-broke","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=39128","title":{"rendered":"Yes, Something Broke"},"content":{"rendered":"

Yes, Something Broke<\/strong><\/a><\/h3>\n

In this missive, we are just going to focus on the \u201cWTF!\u201d<\/em> moment of this past week. In order to do this properly, I need to start with\u00a0last week\u2019s missive<\/a>\u00a0where we asked the question \u201cDid Something Just Break?\u201d<\/em>\u00a0<\/strong>In that article we addressed very specific concerns about interest rates and the problem they were going to cause.<\/strong><\/p>\n

\u201c<\/em>Speaking of rates, each time rates have climbed towards 3%, the market has stumbled.\u201d<\/em><\/strong><\/p><\/blockquote>\n

Chart updated through Friday.<\/h6>\n

\"\"<\/a><\/p>\n

\u201cIf you note in the chart above, a short-term \u2018warning signal\u2019\u00a0has been triggered which suggests that if rates remain above 3%, stocks are going to continue to struggle.\u00a0<\/strong>The last time this occurred was in May when rates popped above 3%, stocks struggled and bonds outperformed.\u201d<\/em><\/p><\/blockquote>\n

We also updated the pathway analysis for the highest probability outcomes over the next couple of months.<\/p>\n

Chart updated through Friday \u2013 pathways remain unchanged<\/h6>\n

\"\"<\/a><\/p>\n

While the majority of the pathway\u2019s accounted for a continued corrective, consolidation, process through the end of the year. It was Pathway #3 which came to fruition.<\/p>\n

\u201cPathway #3:<\/strong> The issue of rising interest combines with a break in the economic data, or another credit-related event, and sends the market heading back to test supports at 2800 and 2750. This would likely coincide with a more severe contraction in the economic data which is not an immediate threat. Nonetheless, we should always consider the risk of an unexpected, exogenous, event. (10%)\u201d<\/strong><\/em><\/p><\/blockquote>\n

The recent sell-off coincides with the rising concerns of higher rates coupled with deterioration in economic growth heading into 2019. To wit:<\/a><\/p>\n

\u201cAs such, our best initial take is that\u00a0yesterday\u2019s repricing of US growth was an overdue gut-check following last week\u2019s monetary and oil supply shocks.\u201d<\/strong><\/em><\/p><\/blockquote>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Yes, Something Broke In this missive, we are just going to focus on the \u201cWTF!\u201d moment of this past week. In order to do this properly, I need to start with\u00a0last week\u2019s missive\u00a0where we asked the question \u201cDid Something Just Break?\u201d\u00a0In that article we addressed very specific concerns about interest rates and the problem they […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[431,8511,506,534,15470],"class_list":["post-39128","post","type-post","status-publish","format-standard","hentry","category-economics","tag-interest-rates","tag-lance-roberts","tag-markets","tag-monetary-policy","tag-real-investment-advice"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39128","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=39128"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39128\/revisions"}],"predecessor-version":[{"id":39129,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39128\/revisions\/39129"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=39128"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=39128"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=39128"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}