23
The End of Inflation? 30 September 2015 War Room

End of inflation webinar slides

Embed Size (px)

Citation preview

Page 1: End of inflation webinar slides

The End of Inflation?30 September 2015

War Room

Page 2: End of inflation webinar slides

HiddenLevers War Room

Open Q + A

Macro Coaching

Archived webinars

CE Credit

Idea Generation

Presentation deck

Product UpdatesScenario Updates

Page 3: End of inflation webinar slides

Market Update

Inflation Trends: US vs World

Deflation Risk Factors + Impact on Fed

Scenarios: End of Inflation

The End of Inflation?

Page 4: End of inflation webinar slides

HiddenLevers

MARKET UPDATE

Page 6: End of inflation webinar slides

BRICS Divergence due to Oil Crash4

sources: HiddenLevers 1 2

CURRENCIES

MARKETS

MB

I C

I C

BR

Page 7: End of inflation webinar slides

Hello Rate Hike: HiddenLevers quite helpful

Research+

Content+

Functionality

Page 8: End of inflation webinar slides

HiddenLevers

INFLATION TRENDS: US VS WORLD

Page 9: End of inflation webinar slides

INFLATION TRENDS: USA

sources: Advisor Perspectives, HiddenLevers

PCE personal consumption(Fed’s Inflation Measure)

CPI conventional inflation metricBoth below 2% target.

CPI fell to 0.0% in 2015(includes Food + Energy)

Page 10: End of inflation webinar slides

INFLATION TRENDS: USA FALLING INCOMES

sources: FiveThirtyEight

Why do Americans feel poor?

Inflation – NO

Falling Wages - YES

Page 11: End of inflation webinar slides

INFLATION TRENDS: EMERGING MARKETS

sources: Trading Economics

China: 2% Inflation. Reverting Recent Fall

India: 4% NowFalling

Page 12: End of inflation webinar slides

INFLATION TRENDS: Japan

sources: Trading Economics

Japan QE

Japan’s 0% ReturnsDeflation Posterchild

0

0

Page 13: End of inflation webinar slides

INFLATION TRENDS: EUROPE

sources: Trading Economics

0

0

Euro Area: 2000s 2% Stability

Now: 0%

Page 14: End of inflation webinar slides

HiddenLevers

DEFLATION RISK FACTORS + IMPACT ON FED

Page 15: End of inflation webinar slides

RISK FACTOR 1: Baby Bust + Consumer Shift

source: HiddenLevers, WSJ, Huffington Post, Time Magazine

Largest Generation Aging + Birthrates Slowingmore whites dying than being born

sharing economy

for all

Latino birthrate

decreasing

youth buys experiences

not stuff

Page 16: End of inflation webinar slides

RISK FACTOR 2: Robot Takeover

reduces commodities

demand

Technology + Automation render humans jobless

source: HiddenLevers, Forbes, Business Insider, Zero Hedge

more jobs eliminated

than created

professional services now under attack

less jobs = less

consumption

tech only gets cheaper

Page 17: End of inflation webinar slides

RISK FACTOR 3: Commodities Perfect Storm

bumper crops last two years

source: HiddenLevers, EIA, DOT, Business Insider,

less China demand for

metals

Crude Oil + Food Prices + Metals Goin’ Down

oil production approaching 1970 peak

oil demand 15%

below peak

secular stagnation

Page 18: End of inflation webinar slides

HiddenLevers

SCENARIOS: END OF INFLATION

Page 19: End of inflation webinar slides

Scenario Complete – Hello Rate Hike

Scenario Updates due to Fed (in)action

Scenario Updates

Inflation Global Deflation

Fed Delays

Super Tantrum

Fed PopsBubble

Page 20: End of inflation webinar slides

Scenario: Global Deflation

GoodFlat CPI +

Growth

NeutralUS Treads

Water

UglyUS Turning

Japanese

CPI

-3S&P

-33%

CPI

0S&P

-9%

CPI

0.2S&P

15%

Global QE coupled with modest growth might enable bull market to continue

Drop in inflation and global growth fears lead to mild bear market (including S&P correction to date)

If deflation grips all first world economies, drop in demand leads to significant equity correction, but bond market rallies strongly

GoodFlat CPI +

Growth

NeutralUS Treads

Water

UglyUS Turning

Japanese

Page 21: End of inflation webinar slides

Scenario: InflationIf US economic growth propels inflation, the Fed can start its rate hike schedule and begin normalization

An unexpected burst of inflation could force the Fed to move faster than expected, leading to equity market declines.

A strong inflationary surge could lead to a mild recession, causing a deeper market correction

GoodFed

Target Hit

NeutralRapidly

Rising Prices

UglyStagflation

CPI

4.0S&P

-20%

CPI

3.0S&P

-10%

CPI

2.0S&P

10%

Page 22: End of inflation webinar slides

The End of Inflation? – Take Aways

Inflation tanks are empty across the first world – 0.0

Primary causes of deflation are tech + demographic shift

Global QE has not beat backdeflationary forces

Technology has broken normal commodities cycle

Page 23: End of inflation webinar slides

Client Screen

Product Update

Print Blank Risk

Questionnaire

Loss Tolerance Capture

INTEGRATIONRiskalyze