Making fake news great again

Is (financial) social media still a good bet?

🧠 The Big Brain
Our liquidity is strong

Things you hear just before…

Right. We can definitely expect to hear more about systemic liquidity over coming months.

Barclays reckons the Fed’s RRP facility will be fully drained. That could be hugely significant, or not matter in the slightest.

It all depends what happens ‘next’…

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The Spark
Canada’s economy is getting frosty

Services activity ‘falls to greatest degree since June 2020’

That’s according to the latest PMI data:

November’s index reading came in at 44.5, down from 46.6 in October.
It was the lowest level since June 2020 and consistent with a steep decline in activity. Moreover, the index has now posted below 50.0 for six months in a row.

Overall, new business was down for a fourth successive month, and to the greatest degree for nearly three years.

The commentary is starting to look bleak. All the boxes you’d tick for recessionary dynamics are right there:

Concurrent declines in new orders ✅ were also recorded, and there was evidence of spare capacity with backlogs of work falling to the greatest degree for nearly three-and-a-half years.

Private sector employment fell slightly for the first time in three months, although the contraction was centred on services as manufacturing staffing levels increased. 👀

Cost inflation remained elevated, though eased to a six month low. (disinflation)

Output charge inflation was little-changed but remained well below that of input costs and thereby pointing to continued margin pressure for private sector companies in November.

Output down, spare capacity, new orders declining, employment slightly lower, and margin pressure continuing…

The PMI’s are not painting a pretty picture. Canadian recession incoming?

💡 The Lightbulb
Making fake news great again

Is (financial) social media still a good bet?

There was a time, when I first got into markets, that social media was AMAZING for financial knowledge.

No question. Sure you had a few larpers, but they were generally lying about themselves rather than what was going on in the world.

Knowledge, news. It was unparalleled.

That bit hasn’t changed. There are still loads of amazing, knowledgeable & generous people sharing value. They’re just harder to find now.

Drowned out by fake news distractions.

Like this that did the rounds earlier today:

The implication was that credit is tightening and this is proof.

Except Wells Fargo haven’t pushed HELOC’s for years now. Basically since the pandemic. So nothing has changed. A totally false signal.

Yet stuff like this crops up all the time on socials.

And the rampant doomerism takes a toll too.

Either you believe it, and drown in fear…

Or you don’t believe it, and feel bad for the people who do…

For me, it’s still just about worth the tradeoff. Is it for you?

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