There is a mountain of evidence suggesting a recession is near, but this cycle has been characterized by some supportive dynamics that are unique from previous cycles.

In this video, Tim discusses what to expect during quarter 2 2023, and the factors stressing today’s economy.

What Wall Street sell-side analysts expected to happen over the past 2 years and what happened are dramatically different. When will negative earnings revisions matter?

I thought I would share the two charts that I think are most important to what is going on with equity markets and with the Fed. The top chart shows the correlation of the S&P and the Fed balance sheet. As I wrote last week, the markets love a bailout. The economy has clearly slowed through the first quarter. Credit availability is sharply contracting and earnings estimates for the S&P in Q1 are expected to decline by 7% y/y. So why are risk assets rallying? I think this chart tells you all you need to know. I would also add that when so many macro investors (Hedge Funds) are positioned short, that creates a bid under the market as those entities have to cover their short positions to manage risk as the market rises.

Tim explores the question: Is bad economic data good for the stock market?

Goldman’s Head of Commodity Research said yesterday, “OPEC’s pricing power is the highest it’s ever been.” The Saudi’s want oil in the $90 to $100 range. They see demand weakening globally, so they cut production. Importantly, they aren’t worried about losing global market share because US shale production is no longer the threat it had been due to shale’s declining productivity and declining rate of resource investment.

The China demand recovery hasn’t materialized like the oil bulls hoped. Makes sense given the property sector is already overbuilt and and the Chinese export economy isn’t getting any help from slackening European and the US demand.

We have plenty of things to worry about in the US economy with the cost of debt going up and its availability going down, but European bank CoCo’s probably isn’t one of them.  

Whenever you hear someone talking about the economy and they use the word “still”, your ears should perk up

Why hasn’t the “most anticipated recession in history” started yet?

What does a new working paper from the NBER and Washington University tell us about quiet quitting and today’s labor environment?

In this episode Drew and Tim interview Torsten Slok, Partner and Chief Economist at Apollo. They discuss what a nolanding economic scenario would look like, employment numbers, the struggle to get inflation down to 2%, the housing market and how demographics will affect future growth prospects.

“Capital efficiency” in the US energy sector has evolved to where the return of cash is coming at the expense of future refining capacity and upstream production.

…I was short a lot of the same stocks as other traders and we were all trying to reduce exposure and manage risk at the same time pushing our respective positions higher and exacerbating our losses. We were well into the start of the Great Financial Crisis bear market, but in May, due to some piece of better economic data, the counter-trend rally was violent and I wasn’t handling it particularly well…

This week Tim explores if the Fed’s latest moves have set our economy up for a soft landing or if all of the other factors pressuring today’s economy are too much to overcome a recession.

Energy Transition is a Fantasy

This week, Tim discusses Jerome Powell’s comments, Oaktree’s Howard Marks making the case on how today’s economy is fundamentally different than the last four decades, and the holy grail of nuclear fusion someday becoming a reality.

The Fed just told us that we are now in a new secular inflation regime and the market didn’t pay attention

This week, Tim looks at the key question every investor and fiduciary may ask themselves before making a market decision, where could I be wrong?

In this video Tim covers the factors driving the secular energy inflation issue. Underinvestment, industry changes, geopolitical issues, and demand all contribute to high oil prices long term.

This week, Tim discusses the recent CPI report and how stagflation may come to more of a forefront in the coming months and how mild stagflation will become the new reality.