A very strange way to think of things
A very strange way to think of things
The Fed will fix it
Best concise overview I’ve heard of what’s going on in markets lately, from Nick Megaw (except he’s joking):
“Economy Bad
Japan Scary
Retail Investors Dumb”
“The Fed has become more and more a facilitator of the Treasury, and of our our fiscal situation, and less and less acting as an independent guardian for the public interest [was it ever?? - rh].
Fed chairmen like Arthur Burns used to threaten to raise interest rats if Congress didn't deal with the budget deficit. You don't hear anything from Jay Powell, he's mute. I think unfortunately history is going to be very unkind to him, because both he and Yellen and even Bernanke - they kind of did the right thing initially - but then they did too much, and they didn't let up on the gas, so we ended up with an inflation problem, and we also ended up with a environment that encouraged the Congress to follow their worst instincts, and they did.
The one thing you can depend on with American democracy is that Congress will always do the wrong thing, and it doesn't matter which party you're talking about. So here we are. We have $35 trillion worth of debt, and it's mostly funded short-term, so whoever wins the White House inherits this mess. That's it's going to limit their flexibility rather considerably.”
A prescient Diego Parrilla on RealVision in 2020:
"Let's not fool ourselves, all we did with artificial low interest rates and this insane amount of desperate search for yield and lending and whatever, is create bubbles without precedents...the next decade is the transformation of bubbles that are too big to fail into inflation."
Just a heads up -
I saw that friend of the show Phil Bak posted this:
I’m unaware of any Substack email issues, but, just as Phil says, any emails from me would just be the posts you already get, and I would never send any other sort of nonsense (other than this nonsense) or requests to you for anything.
Anyway…
Brook Benton fixes this.
“If you’re convinced, for instance, that the music of your own youth is superior to whatever’s being made these days, then you can now cite a scientific paper to claim that today’s hits are just dumbed-down slop.”
I love the gaslighting.
That was some bear market we had, huh?
“The media, led by our friend Steve Liesman, is trying to stampede the Fed into a rate cut, in part because I think the equity markets have lost their way.”
How about a compromise: we cut the base rate to the 2-year yield (4% or so), and disband the Fed?
The Fed whisperers were out in force. To annoy me, they say Wharton’s Jeremy Siegel, instead of Wisdomtree’s Jeremy Siegel:
Similarly, Claudia Sahm - who is another uber-interventionist econ-cultist - was on CNBS the other day, saying she wants the Fed to cut rates, and "Get out of the way!"
Huh? I wish economists would get out of the way, permanently.
On a hunch, I checked, and of course. Paging Upton Sinclair!
It’s always amusing that the market can go up 8 million points in a year, but if stocks then fall 2% (or 8%), the asset gatherers and other degenerates come out of the woodwork screaming for the Fed to do something!!
What are you, five? Grow up.
Remember -
It’s sort of like a Texas holdem player who’s been on a hot streak suddenly watching his pocket aces get cracked by a set of twos, and then crying about “how lucky” the other guy is. Have you never played poker before??
Stock prices are the same way. They often seem unfair, perhaps more so nowadays than ever. Suck it up, or just buy T-Bills like Warren Buffett.
Hard to feel bad for shareholders when you see charts like this:
This guy, every time:
Meanwhile, rates are cutting themselves, which might not be good economic news.
“What is everybody worried about that they drive the ten-year down that fast?”
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