Repo Fails Rising

Alhambra: Is It Recession?

Because so much of what was bought (and put into inventory) at the margins came from those outside sources, Real Final Sales of Domestic Product, everything which was made or served by Americans and American businesses sold to anyone anywhere, also dropped like the headline in Q1, underscoring just how much all that stuff shown above really is propping up the public’s visualized sense of the overall economic situation.

As has been the case since the last recession, spending on goods may be up though spending on services is not. Therefore, combined, consumer spending adjusted for prices (and seasonality) is barely keeping up with the pre-2020 trend. This lackluster outcome the clear result of Americans having to pay more for goods in order to get fewer of them, leaving them unable to complete the services recovery.

Below is the repo fail chart from the article, along with two earlier ones to put it into context.

The winning move in inflation is to not chase the false price signals.