Macro

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This chart is really just asking how much oil can you buy with gold? And at about 0.51 grams per barrel, the answer right now is a lot. That’s extreme. Historically, you don’t see oil this cheap relative to gold unless something is off in the real economy or people are paying up for insurance. Oil is tied to actual demand with shipping, travel, production. Gold is tied to trust, uncertainty, and the long arc of policy. When gold buys this much oil, the market is leaning toward protection over growth.

Look at the past troughs and the pattern is pretty consistent. These lows show up around demand shocks or financial stress like in the late 90s in Asia, 2008, 2020. Oil gets hit first because demand weakens, while gold holds up because uncertainty doesn’t fade as fast as inflation. That fits the current backdrop if a global slowdown is coming. The key thing, though, is that these extremes rarely last forever. Either recession deepens and oil stays suppressed longer than people expect, or policy easing, supply risk, or recovery flips the script and oil snaps back hard. Historically, when this ratio turns, it tends to do so fast and that’s what makes this level less a resting place and more a sign that something is about to change
![](https://m.stacker.news/122904)


When Gold Buys This Much Oil, the Market Is Bracing for Something

charts_and_numbers

Sentiment ticked up in December. The index moved from 51.0 to 52.9 technically an improvement, but only after months of steady deterioration from the mid 70s earlier in the year. That context matters. When sentiment is this low, small moves up often say more about exhaustion than optimism. People aren’t suddenly feeling good, they’re just feeling slightly less bad.

What really jumps out is how depressed the level still is. At 52.9, sentiment is nowhere near a healthy expansionary range. Historically, readings like this are consistent with periods when households are cautious, defensive, and slow to commit to big purchases.

The split between now and later tells you everything

Dig into the components and the story gets clearer. Current conditions fell again, from 51.1 to 50.4, while expectations rose to 54.6. That’s not confidence, that’s coping.

In plain terms…people don’t like how things feel today, but they’re hoping next year is easier. That pattern shows up late in cycles, when the present is tight but consumers are leaning on the idea that rates will fall, inflation will cool, or policymakers will ride to the rescue. Hope is doing more work than income growth.

Inflation expectations are cooling but prices are still the villain

The chart makes this painfully obvious. One year inflation expectations have fallen from the spring peak above 6% to 4.2%, and five year expectations eased to 3.2%. That’s real progress on expectations.

But here’s the catch…consumers don’t experience inflation as a forecast. They experience it as a price level. The red line in the chart, the share of consumers blaming high prices for poor personal finances stays elevated even as inflation expectations fall. That’s the disconnect policymakers keep running into.

Slower inflation doesn’t feel like relief when groceries, rent, insurance, and utilities are still far above where they were a few years ago. Disinflation helps the future, but it doesn’t repair the damage already done to household balance sheets.

Why this matters for the economy going forward

This is not the psychology of a consumer ready to drive growth. It’s the psychology of a consumer trying to preserve flexibility.

When sentiment is this low and current conditions are weakening, spending becomes selective. Households still spend on necessities, but they delay upgrades, discretionary durables, and anything that feels optional. That lines up with what we’re seeing elsewhere with softer big ticket demand, pressure on lower income households, and more sensitivity to rates and credit availability.

It also means the economy has very little emotional cushion. If the labor market softens or credit tightens further, sentiment doesn’t have far to fall and historically, that’s when pullbacks in spending accelerate.

My View

Inflation expectations are improving, which helps the Fed. But consumer morale remains stuck near cycle lows because prices are still high and incomes haven’t fully caught up. That combination of cooling inflation but persistent frustration is exactly what you see before growth slows further, not before it reaccelerates.

The consumer isn’t panicking, but they’re not confident either. They’re bracing. And economies rarely surprise to the upside when households are stuck in that mindset.

![](https://m.stacker.news/122856)

University of Michigan Consumer Sentiment: Relief on Inflation, Not on Life

This is Japan acknowledging something it hasn’t been able to say for most of the last 30 years which is wages are rising, companies are actually passing costs through, and inflation looks stickier than a temporary FX or energy shock. When you finally get a real wage price loop, staying at emergency era rates starts to create more risk than moving away from them. The BoJ is choosing to normalize carefully now, while it still has control, rather than wait until the yen or inflation expectations force its hand.

The yen tells you how fragile that confidence still is. Sitting around 157, it’s basically the market saying, “We hear you, but one hike doesn’t fix rate differentials or Japan’s fiscal math.” That’s why you also hear government officials stressing debt service, the neutral rate, and the need to watch the outlook. They’re not contradicting the BoJ, they’re quietly reminding everyone that normalization has limits.

Why This Matters Outside Japan

The immediate impact isn’t about Japan slowing its own economy. It’s about funding. The yen has been the world’s cheapest source of leverage for years, and Japan has been a steady buyer of global bonds. When rates rise, even modestly, that cushion thins. Carry trades get less forgiving, hedging costs go up, and global markets get choppier especially in FX and rates.

The next layer is more subtle. Higher Japanese yields and higher hedging costs can keep U.S. and European long rates from falling much, even as growth weakens. That’s a form of tightening that doesn’t come from the Fed, but it still hits credit, refinancing, and risk assets. You tend to see the stress show up first in levered credit, emerging markets, and long duration trades that depend on calm funding conditions.

If the World Slips Into Recession

This is where the setup gets uncomfortable. In a real risk off move, the yen doesn’t stay a funding currency, it often flips into a safe haven. When that happens, carry trades don’t unwind slowly; they snap. The BoJ might pause later if growth cracks, but the bigger change doesn’t go away…Japan is no longer a permanent zero rate anchor, and global leverage has to adjust to that reality.

What I’m Watching

I’m less focused on the first reaction and more on the follow through. Does USDJPY keep drifting, or does it start to move with volatility? Do hedging costs and cross currency basis tighten? How do JGB 10s and 30s behave, and does the government quietly adjust issuance to calm the long end? And most importantly, do credit spreads start to widen as rates stay sticky while growth fades?

That’s where you find out whether this was just a symbolic step or the beginning of a real shift in the global funding backdrop.

![](https://m.stacker.news/122828)

Japan Didn’t Hike to Tighten It Hiked to Avoid Losing Control

Sowell’s argument about the Great Depression focuses less on the 1929 crash itself and more on the policy error that followed. The market break hurt confidence, but the economy wasn’t yet in free fall, unemployment was uneven but improving into mid 1930. The real turning point was Smoot-Hawley, when Washington imposed sweeping tariffs to protect jobs, ignoring warnings from more than 1,000 economists that retaliation would gut trade. That warning proved right. Global trade collapsed, retaliation spread quickly, and unemployment surged into double digits within months, staying there for the entire 1930s. In Sowell’s view, the depression wasn’t unavoidable, it was extended and deepened by policy choices.

That’s why today’s tariff escalation deserves more attention than it gets. Modern reciprocal tariffs, Section 232 actions, and tit for tat responses across China, Europe, Canada, Mexico, and others rhyme uncomfortably with that period. Once trade shifts from being a pressure release to a blunt weapon, the damage compounds where supply chains fracture, exporters suffer, prices skew, and already weak sectors deteriorate further. The historical lesson is that broad, retaliatory protectionism has a habit of turning manageable slowdowns into long, grinding economic slogs.

![](https://m.stacker.news/122722)

Sowells Lesson for Today When Tariffs Turn a Slowdown Into a Decade Long Problem

Switzerland isn’t drifting back toward negative rates because growth is strong, it’s doing it because inflation has quietly disappeared and the franc keeps getting too strong. In periods of global stress, capital floods into Switzerland as a safe haven, tightening financial conditions without the SNB ever touching policy rates. That hurts exporters, suppresses prices, and raises the risk of outright deflation. The response isn’t loud QE or panic cuts; it’s more technical and defensive…tiered reserves, penalties on excess cash, and subtle pressure to keep money moving instead of sitting idle. None of this sparks a boom. It simply prevents conditions from tightening further when demand is already weak. Historically, it buys time and keeps the credit system from stalling.

Why the U.S. Eventually Walks the Same Road

The U.S. starts from a different place with inflation first, restraint second but the destination can still converge. As higher rates linger, debt rolls over at worse terms, delinquencies rise, commercial real estate strains, and growth cools. When inflation finally breaks, the policy problem flips. The choice stops being about fighting prices and becomes about preventing a credit contraction from morphing into deflation. That’s when zero rates, QE, or even something that looks like NIRP come back, not because central bankers want them, but because a highly levered, refinancing dependent system can’t absorb tight money indefinitely. Switzerland is the early signal. When safe haven flows, weak demand, and deflation risks dominate, central banks don’t double down on discipline, they ease constraints to keep the plumbing from freezing.

![](https://m.stacker.news/122699)

When inflation dies, deflation takes over — Switzerland is the warning.

This feels like market mechanics doing what they do when liquidity thins out. You get a fast break lower once price slips through obvious intraday levels, stops get tripped, and systematic sellers lean in. That selling feeds on itself for a bit, not because everyone suddenly got bearish, but because that’s how these systems are wired to react.

Then you hit a level where selling pressure runs out, shorts start covering, and the same machines that sold on the way down flip into buy mode as price stabilizes and reclaims key averages. The snapback is a reflex. This is less about fundamentals changing in an hour and more about how a market dominated by algorithms, options hedging, and shallow liquidity can swing hundreds of billions on autopilot before most humans even react.

![](https://m.stacker.news/122686)

Stops, machines and liquidity: the domino effect of modern markets

When I read the CPI report, I don’t stop at 2.7% year over year. I try to figure out where inflation still has oxygen and where it’s clearly running out. One footnote matters…October CPI wasn’t collected because of the funding lapse, so we’re leaning on a two month Sept to Nov move with some gaps in the usual monthly detail. Even with that caveat, the signal is clear that headline CPI is 2.7% YoY, core is 2.6% YoY, and the pattern is familiar…cooling into spring, a mid year reacceleration, and now a renewed slowdown. 

The Sticky Part Is Mostly Shelter And It’s Lagging Reality

Shelter is still doing a lot of heavy lifting at 3.0% YoY, and OER 3.4% YoY with an outsized contribution to the total. But here’s the key context people miss…private sector rent data is cooling much faster than CPI shelter. Zillow’s observed rent growth for apartments is around 1.1% YoY, and their multifamily outlook is negative in 2026 (-0.3%). That’s not a contradiction, it’s how the data is built. CPI shelter is slow because it reflects existing leases that reset over time. Private data captures today’s asking rents. So CPI is still showing shelter inflation because it’s looking in the rearview mirror, even as the real time housing market is already easing.

Where The Weakness Is Showing Up

The soft spots aren’t subtle. Travel linked categories normally resilient when demand is strong are outright negative year over year…lodging away from home (-4.1%), airline fares (-5.4%), public transportation (-4.0%). That’s what fading pricing power looks like. And goods are still a competitive battlefield…information technology commodities (-3.3%) and smartphones (-9.4%) are basically telling you nobody gets to raise prices there.

Meanwhile, the inflation that is hanging around looks more like cost structure than overheating demand. Energy services are up 7.4% YoY, with electricity 6.9% YoY, even though energy commodities are much tamer (1.2% YoY). That’s less consumers are splurging and more the fixed bills are still heavy. 

My Read

This isn’t an economy reaccelerating. It’s an economy cooling in an uneven way…sticky, lagging shelter and non optional bills on one side, weakening discretionary pricing power on the other. If you sanity check it against real time signals, it lines up, WTI hanging in the mid $50s and trending down over the year doesn’t scream demand resurgence. The bigger implication is timing with the CPI still being propped up by backward looking shelter, while the forward looking parts of the economy are already acting softer. That’s how you end up with policy staying tight even after the underlying demand has rolled over.

![](https://m.stacker.news/122644)

Inflation Is Narrowing, Demand Is Softening And The CPI Is Catching Up

Construction_and_Engineering

A growing share of sellers are pulling listings because homes are sitting longer, offers are softer, and cutting prices feels like locking in a loss. Redfin data shows nearly 70% of homes listed in September sat on the market for 60+ days, and roughly 15% of delistings were at risk of selling below purchase price, which helps explain why owners would rather wait than blink first.

What this says about the housing market

This is what a frozen market looks like. Buyers are constrained by affordability and rates; sellers are anchored to 2021–2022 price memories. So instead of prices clearing lower in a clean way, supply gets artificially pulled back. Historically, when listings are withdrawn en masse, it’s not the bottom; it’s the phase where neither side has accepted the new clearing price yet. Eventually, either rates fall meaningfully, incomes catch up, or prices do the work. Right now, sellers stepping away is the market telling you that adjustment is still unfinished.

![](https://m.stacker.news/122632)

🏠 Why Home Sellers Are Quietly Tapping Out

This is a positioning story. Retail investors are already heavily in stocks, and professional managers aren’t hanging back either, they’re close to fully invested. When everyone is leaning the same way, the market doesn’t get stronger, it gets more fragile. There just isn’t much new money left to push prices higher if something changes.

Why managers end up fully invested

It’s about incentives. Managers are judged against benchmarks and peers, constantly. Being cautious too early is usually worse for a career than being late. So they stay invested, ride what’s working, and assume they’ll dial back risk once conditions shift. The problem is that markets don’t usually give you a slow, polite warning. When things change, they tend to change fast.

Why this matters for retirees

For retirees, this doesn’t feel like being all in. It feels diversified…spread across funds, accounts, and strategies. But when managers across the system are near max exposure, those distinctions matter less. When volatility spikes, risk isn’t reduced ahead of time. It’s reduced after prices are already falling. That means selling into weakness and locking in losses at exactly the wrong moment when stability matters most.

We’ve seen this setup before

No major financial crisis including 1907, 1929, 2000, or 2008 started with managers defensively positioned. They all started with confidence, crowding, and high exposure. Risk only came off after liquidity broke, volatility surged, and correlations snapped higher.

This kind of setup isn’t a timing signal. It’s a risk signal. When positioning is this full, upside gets harder and downside tends to arrive faster than people expect, not because everyone is wrong, but because everyone is already in.

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Why Full Exposure Feels Good Until It Doesn’t

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Macro strategy | Systemic risk & policy intel | human insight | Not Financial Advice. 