Much of corporate debt was refinanced in 2020-21 at significantly lower coupons; this means the bulk of the corporate bond market is NOT sensitive to rising rates in 2023-24, but bank loans (which have floating-rate coupons) will reset immediately and cause pain.

David Rosenberg argues that December 2018 was different from current market conditions because it saw 20% declines in a month (vertical down), corporate bond market closure, and risk-off across the board, whereas 2022's declines were spread across 12 months, and there's no comparison between the two

Rosenberg argues that supply-side pressures are clearly easing as evidenced by ISM vendor delivery delays dropping to their lowest level since March 2009 (the worst recession since the 1930s), coinciding with demand growth slowing due to monetary policy lags

92% of the government-guaranteed mortgage market was non-refinanceable as of October-November when rates peaked, even if rates fell 200 basis points from there; with no refinancing, the economy needs to return to near-zero rates to drive any refi-driven stimulus.

The Fed's minutes tell you 'what they want you to hear' while meeting transcripts (released 5 years later) reveal actual internal dynamics; comparing minutes to transcripts from past meetings shows significant discrepancies between public narrative and closed-door reality.

David Rosenberg warns that asset deflation (residential real estate and equities) will become the dominant narrative replacing inflation concerns, making the discussion about whether to cut rates to 0% and beyond irrelevant to fighting inflation

Money supply (M2) year-over-year growth is now zero, which has never happened since data started in 1959; M1 is contracting at 2% annually; and these contracting money measures are a great leading indicator of falling inflation, contradicting the consensus view of persistent inflation.

Rosenberg predicts that within 24 months the CPI will see at least one month of negative year-over-year headline print, going well below the 2% consensus forecast, driven by goods deflation and services disinflation from housing supply.

The Fed wants to do a 'reset of valuations' in the stock market, particularly equity valuations, but Powell cannot say 'I want to destroy your 401k' publicly—instead he signals this through his statements about job losses and tighter financial conditions.

There is no correlation between the Fed's job openings metric (JOLTS) and wage growth; JOLTS is an unreliable metric with only two decades of history (starts in 2000) and is highly gaming-able (e.g., whispering job openings at a job fair counts as an opening), yet the Fed is using it to justify continued tightening.

When stock market earnings multiples start at 22x and compress to current 17x (as in 2022), but earnings themselves are about to enter recession, the real multiple on recession earnings is closer to 20x, not 17x, and stocks are still overvalued despite the 2022 decline.

The Fed did not have to blink in December 2018 because the corporate bond market had a complete 'bid' and deals weren't being pulled; in contrast, there was no systemic financial stress, so Powell's pivot was based on market psychology, not financial system stability.

Once the economy rolls over into recession, the Fed will cut rates 500 basis points cumulatively (despite recent comments about higher-for-longer), as this is the historical pattern in recessions regardless of inflation conditions; Paul Volcker cut rates 1,200 basis points during double-digit inflation in the early 1980s.

The U.S. is not in the recession yet (as of January 2023), though the Fed's own forecasts and leading indicators are pointing to one in the coming months; the debate is about timing (Q1, Q2, or Q3 2023) rather than whether recession happens.

The Fed's November or December press statement included language about being 'mindful of lags' in monetary policy for the first time, which caused the stock market to rally for 30 minutes before Powell went to the podium and said the terminal rate would be 'much higher' than previously guided, causing the market to reverse.

The Bank of Japan did not panic during the pandemic and inflation spike (unlike other central banks); their mistake of yield curve control will eventually fail, but their refusal to overreact was the correct policy approach, and they may prove to be the smart central bank retrospectively.

The last global dual shock of similar magnitude (war + pandemic) occurred a century ago with World War I followed by the Spanish Flu, which produced 4 years of 15% inflation; when F. Scott Fitzgerald wrote The Great Gatsby (1925), there was no mention of great inflation, and the 1920s-30s saw a decade of no inflation followed by deflation.

The Fed's unemployment forecast rising from 3.5% to 4.6% (a 1.1 percentage point increase) implies roughly 2 million job losses, which the Fed has essentially announced as its policy goal through its projections.

There is no historical correlation between recession severity (mild vs severe) and stock market performance; a 'mild recession' can produce a severe bear market as happened in 2001 with the mildest GDP recession on record but 'a mother of a bear market'; profit volatility is higher than GDP volatility, so even mild recessions see 20% earnings declines.

Biden is giving Powell 'carte blanche' because Biden got blamed for inflation, removing political pressure that existed under Trump; without Twitter attack pressure, Powell has more room to pursue aggressive tightening, though political pressure will likely re-emerge when unemployment rises in 2023-24.