Juggling Dynamite

When it comes to money, because it’s so quantifiable, you’d expect people to make very rational decisions. But they don’t. Because we’re humans, we’re more driven by our evolutionary wiring and our emotions. We make “predictably irrational” decisions, as today’s guest expert would say. Dan Ariely is the James B. Duke Professor of Psychology and Behavioral Economics at Duke University and a founding member of the Center for Advanced Hindsight. Here is a direct video link.

The year-over-year leap in the Fed Funds Rate (inverted on the lower right in orange) is leading ISM new orders down (green line on the lower right). ISM new orders (lower left, in orange, since 2002) lead corporate revenues (green). The chart below, courtesy of Francois Trahan, suggests the trends in motion. Jubilant corporate bond and stock prices are, so far, whistling past the broad and persistent decline in new orders and other leading economic indicators.

Meanwhile, the percentage of banks reporting tighter lending standards (inverted in grey below since 1990) is the highest since past recessions and is leading bank lending (in orange) lower from here.
Danielle DiMartino Booth discusses these factors and more in the clips below.

Danielle DiMartino Booth, CEO and chief strategist for QI Research, and former advisor to the Dallas Fed, joins BNN Bloomberg to discuss her view on the Fed’s path forward. DiMartino Booth says the economy is pointing towards a recession, however, investors are ignoring the signs as the stock market continues to climb. Here is a direct video link.

Danielle DiMartino Booth, CEO of QI Research, discusses the drivers of consumer spending, the possibility of more layoffs coming, and investment implications. Here is a direct video link.

This discussion offers an important overview of current financial conditions and what they suggest from here.

Dr. Lacy Hunt says a credit crunch is now at hand that will start freezing up the gears of the US economy. Here is a direct video link.

Hoisington’s Q2 2023 Quarterly Review and Outlook is available at this link.