gone fishin
market vibes
February 7…)
“Whither goest thou, America, in thy shiny car in the night?” Jack Kerouac
NFP this morning apparently revisions are expected.
In the news
Wilkommen et bienvenue: The Bank of England cut its growth forecast by half to 0.75% for 2025 and estimates a shallow contraction at the end of last year, giving the economy “a 2-in-5 chance of already being in a technical recession.” LaGarde is awfully testy lately. She must be nearing the end of the line, too.
Germany votes on February 23. The chart below says a lot about European politics. In a way, coalitions are not much different from republics! Europe is going to keep cutting rates.
In America, Scott Bessent says he is “[completely aligned with DOGE goals] and Musk.” Marco Rubio cut staffing at USAID from 14,000 to 290, citing spendthrift data. Lorie Logan, a voting member of the FOMC, said she may not favor any more cuts even if CPI reaches the 2% goal, according to Bloomberg this morning.
In my opinion
Buffett’s secretary may finally get her day in the sun. Trump’s proposal for taxing carried interest…one of the most controversial elements of the reptilian code…removing taxes altogether for tips, overtime, and Social Security, and cutting taxes for “build it here” small and big businesses… will require much higher tariffs to fill the void.
It seems obvious: if we are cutting tax revenue from the bottom 95% of taxpayers and aiming to find $2 trillion in combined federal income plus spending cuts, a huge part of that will come from the top 5%. If a flat tax is better for the wealthy than all of the cutouts and labyrinthine millions of words of tax laws now serving them, and a flat tax helps the Treasury fund the government… a flat tax may finally get a shot. Chess?
In the markets
I’m driving to Florida this afternoon, so I’ll check in with an early weekend wrap later in the session. We should have a pretty good idea of trends for next week by Llunchtime. Until then…
My vibe
Stocks and gold are at the highs, Bitcoin is not far from them. Will they run higher? It takes a lot of money to lift a $100 trillion market cap. Bonds and Yen are courting an anti-carry correlation. Oil may grind lower, but gasoline and distillates may not. Bottom line Trump is not Biden but the markets have yet to read the memo… One of these days, the masters of the universe are going to realize the best money in front of them is below them. The bull thing is getting boring.
Good luck today.
JJ
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Charts and data CQG and Bloomberg
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"One of these days, the masters of the universe are going to realize the best money in front of them is below them. The bull thing is getting boring."
After reading your vibes I often wonder something along the lines of "What the hell is he saying?" It's like reading the contents of a big decoder ring. Really big!
My vibe on your vibe is that the big money may be looking to win bigly via the downside.
I'm going from memory here of one of my favorite books which I read about 30 years ago so I think I'm wrong about the particulars but the gist is right. It's "Reminiscences of a Stock Operator" and one of the best parts is when the boy plunger is in Florida on vacation fishing and walks by the office of a broker (EF Hutton?) and sees Consolidated Copper is trading at $25 a he realizes that he has to get back to NY to get back involved in the market action. Anyway safe travels, tight lines and one thing I know is you won't see an EF Hutton office.