CPI Tomorrow

So the yield curve took a breather today and its seems equities are geared up for a Sub 3.1% CPI print. As far as expectations tomorrow, here is the JPM take on what happens per a given result:

This rarely transpires in the manner that JPM lays out, and the trading day rarely ends up the way that traders expect. We always see a knee jerk reaction trade off a number but volatility usually ensues and we trend one way the rest of the day and close near the highs or the lows. However what we like about charts like this is that if the number comes out above 3.3% or below 2.8% we should see an increase in volatility.

We would suspect the trend down in the inflation rate to continue and in fact Redbook sales numbers look tumultuous and looks to be the start of something much larger:

We don’t want to sugar coat this, we have a FOMC meeting in 2 weeks and right now the 25bp hike crowd sits at 92% and if we get a number that is 2.9% or lower, we would suspect those odds to plunge. There is a disaster brewing in underlying monetary mechanics and yes the FRB has gone 10x in 15 years on the balance sheet and this has buffered the absolute collapse that would have already occurred. However there is a cost to this 10x expansion and that is a massive distortion in wealth. Redistribution does get influenced by charitable means, rather redistribution takes the form of government Socialistic leanings and America is dangerously close to putting itself in an irreversible decision. History has not proven kindly to governmental transitions bu but the tyranny is becoming obvious…the devaluation of ones labor earnings via higher goods and services costs, is very obvious. American leadership is weak and the disrespect on the global stage is obvious with the BRICs endeavors.

We saw Janet Yellen in China and we can’t help but think the Chinese laugh their asses off when she leaves, they probably told her in a polite way, thanks but no thanks!

The next decade will not come out like anyone believes. Magnelibra believes that the stage is set for a massive clash of ideologies, of Army’s and of Humanity in general. There is no way to prepare for this, but if Covid taught us anything…it is the sheer fact that mankind’s ability to critically think when under pressure is negligible at best and that is a very dangerous proposition to make.