22 March 2022

I saw the above chart which validated exactly what I have noticed with so many of my friends and family. The wealth effect from the increase in home prices has once again acted as an ATM for many people whose income has not kept up with their living expenses. The only reason the % of disposable income is not at subprime levels is due the fact that interest rates are much lower now than then.

It sure looks like the debt that has been added to ones home loan is becoming a wee bit more expensive to service.

Market Watch

Oil went on the rampage the past 24hrs up 7.7%.

We have added a new column and feature to the Ditto Navigator – MarketWatch. The DD% column on the right measures the current drawdown from the all time high.

CTA’s the professional trader community have been reducing their exposure to equities in fact dipping into short territory. Anyone who has traded both sides of the market knows it is impossible to time the market consistently. Lets see if this one proves the right move.

This is exactly the time to see who has the real skills to trade a volatile market. As the equity markets were selling off investors/traders were running for put protection. The Put / Call ratio is now collapsing as we see many people closing out their hedges as markets stage a recovery. It truly is remarkable how the markets swing from cycle to cycle and present so much trading opportunity along the way. The markets are never dull and we get to peek at who is playing without protection.

Money Complex

I have been writing about the flattening and potential inverting of the US yield curve. 10y – 2y keep watching this indicator as it will help us prepare for the future. 50% of the worlds central banks have started hiking their rates, I remain convinced we are heading towards a recession or stagflation.

Finally I have often spoken about the 100 year Austrian Bond issued at a yield of less than 1%. Well 100 years is a long time and yesterday it made a new all time low in price. Only another ~97yrs to wait for redemption.

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