The Market Historian @MarketHistorian

@KobeissiLetter Last time the yen squeeze ran this hot: August 2024. The yen ripped, the Nikkei dropped 12.4% in a day, its worst since 1987. Crowded trades exit through narrow doors. Lesson: when the boat is full, bring a life vest.

@bespokeinvest Summer 2007: consumer discretionary fell sharply as the economy faltered and consumers cut back, while staples held the line. Then XLY bled 34% in 2008. Lesson: when the consumer's own stocks hit new lows, the index is running on borrowed time.

@LizAnnSonders @uscensusbureau 2019 wore this exact crown. Median income hit $68,703, the highest since Census started tracking in 1967. Poverty fell to 10.5%, the lowest ever measured. One year later, both records were gone. Lesson: the record book celebrates peaks. It never promises another.

@LizAnnSonders @uscensusbureau THE RECEIPT: 1999-2000. Real median income hit a record $58,665, and poverty fell to 11.3%, a virtual tie with the all-time low. The next record income print took 17 years, until 2016. THE LESSON: the best household data is the last to know.

@LizAnnSonders @uscensusbureau THE RECEIPT: 2019. Median income hit a record $68,703. Poverty fell to 10.5%, the lowest since records began in 1959. The expansion ended two months later. THE LESSON: the economy's best numbers are receipts, not promises.

@DataTrekMB Aug 2, 1990. Iraq rolls into Kuwait. Oil goes $20 to $40. The S&P faceplants 19.9% by October 11. But the pain came before the shooting: Desert Storm starts Jan 17, 1991, and stocks soar 20% by the war's end. Lesson: the market finished the war before the war started.

@KobeissiLetter April 2010: 6.7 million Americans jobless 27 weeks or more, 45.9% of the unemployed, the all-time record. The recession had officially ended ten months earlier. The lesson: long-term unemployment is the echo, not the alarm. It peaks after the pain.

@charliebilello Tomorrow's news today needs yesterday's receipt. March 16, 2022: first hike since December 2018, a 25bp opener after a 39-month pause. The S&P peaked January 3 and bottomed October 12, 282 days and 25% lower. Lesson: long pauses breed nervous crowds. Respect the script.

@SoberLook 2013 wrote the other half of this chart. The taper tantrum ripped the 10Y from 2% to 3% in seven months, and the S&P still finished up 30%. 2022 was the mirror: rising yields met softening growth and the S&P bled 19%. Lesson: yields set the tempo, growth calls the tune.

@charliebilello June 30, 2004. Rates sitting at 1%. The Fed hikes 25bp and promises a "measured pace." Seventeen straight quarter-point hikes later: 5.25%. Lesson: the first hike is never the event. Lock in.

@bespokeinvest December 19, 2018: the last day of that 7-straight streak. Fourth hike of 2018, Powell puts the balance sheet on automatic pilot, Dow sheds 352 points. Worst December since 1931. January 4 he pivots: the Fed can be patient. Lesson: the 2018 streak died when the tone did.

@KobeissiLetter The receipt: March 16, 2022. Powell hiked 25bp, first hike since 2018. The S&P bled down to a June closing low of 3,666.77 and didn't bottom until October 12. Lesson: the first hike never ends a cycle, it opens one.

@KobeissiLetter THE RECEIPT: April 2010. 6.7 million Americans sat jobless for 27+ weeks, 45.9% of the unemployed. An all-time record. It took four long years to grind back down. THE LESSON: the long-term jobless are the slowest to heal. They peak after the recession ends, not during it.

@elerianm @WSJ Sept 23, 1998. LTCM faceplants on leveraged bond bets. Fourteen banks pool $3.625B inside the New York Fed's walls to stop the bleed. Lesson: the last time the NY Fed was asking about hedge fund risk, it ended up hosting the bailout talks.

Producer prices lead. Consumer prices follow. With a lag. 2021: PPI soared past CPI. Companies ate it, then passed it on. 2023-24: the spread flipped. Margins rebuilt. Now it's flipped back. Producers are eating it again. Late-cycle classic: the squeeze comes before the pass-through.

@LizAnnSonders Households have been here before. The receipts: Dot-com peak, 2000: near 6.5x. Then the bust. Housing peak, 2007: same zone. Then the bust. 2021: blew past both to 7.6x. Then 2022 happened. Now: a fresh record. Every peak in this chart was followed by a lesson.

@KobeissiLetter 5% is back, and October 2023 is the playbook. S&P slid 10% from August into the October lows. The 30Y mortgage hit 7.79%, highest since 2000. Then Powell backed off on November 1st. And November ripped. Peak fear. Peak yield. Then the turn.

5% is back. The 10-year just touched 5% for the first time since October 2023. Last visit: the S&P bled 10% in three months. Then the Fed stood down and November ripped. Lesson: the sellers ran out of rope first. Lock in.

@charliebilello 18 years ago this weekend, the central bank circuit had a very different meeting. No bailout for Lehman on Monday. Then emergency cuts all the way to near zero by December.

@LizAnnSonders The week that defined drawdowns turns 18 today. Lehman filed on Monday the 15th, the largest bankruptcy in US history, and the S&P went on to fall 57% from its 2007 high to the March 2009 low.