Business

Morgan Stanley's auto team, led by analyst Adam Jonas, seems to be convinced that the auto trade is officially over prompting him to slash over 11 million units from his North American SAAR forecast over the next 4 years.  Jonas attributes his controversial call to the fact that OEMs have been so aggressive in implementing policies designed to pull forward sales (e.g. longer loan terms, higher loan mix to subprime borrowers, etc.) that they've actually started to pressure used car prices to the point that they're cannibalizing new sales.

A month ago, China 5s10s curve inverted for the first time ever, flashing warning signs of an imminent recession (but technical, liquidity factors were offered as excuses for this shift in the belly of the curve). The curve then double-inverted (with 3s10s inverting) seemingly confirming fundamental fears. And now, China's yield curve is inverted from 1Y to 10Y for the second time in history.

China's $1.7 trillion government-bond market is turning curiouser and curiouser...

Authored by Kevin Muir via The Macro Tourist blog,

Authored by Charles Hugh Smith via OfTwoMinds blog,

The entire status quo is based on the delusion that rapidly rising debt will never generate any negative consequences.

At the end of May, we highlighted that after an unprecedented buying spree, which has sent the Nasdaq to nosebleed record levels, a crack had appeared in the second tech bubble: after weeks of relentless inflows into the sector, tech had suffered its largest outflow in over a year.