This is the worst market since 1788!
The Permian–Triassic extinction event may have been slightly worse.
I guess Powell’s testifying before the Senate today. That should be productive.
As we all know, the Fed’s top priority is getting their CPI model down to their nonsense made-up 2% number. Yep. That’s the narrative.
They’ve got their top people on it.
The Bloomberg gaslighting never ends: The Mystery of Health Care’s Missing Inflation.
I know most Americans are very worried that - in the official numbers at least - healthcare inflation is lagging gas prices.
As the title of yesterday’s missive suggested: Question the integrity of the data!
Anyway, thank God the FT is here to provide a forum to defend Blackrock and Vanguard: Worries about the dominance of big three index trackers are wrong Paging Mike Green…
I wrote a thread in October 2017 in an attempt explain why I had abandoned the American D vs R nonsense, which I strongly suggest everyone do. I also stopped watching cable news in 2016. Try it - you’ll live longer.
Anyway, check the thread out if you’re interested (give it time to load.) Again - I’m bipartisan. I loathe both major parties.
On a lighter note, I pick on the FT, and Bloomberg, and of course CNBS a lot, mostly because they deserve it, with their constant obsequious pandering to power, but there are exceptions, like FT reporter Dan McCrum, and his excellent work exposing Wirecard, and Craig Whitlock’s 2019 Afghanistan exposé, “At War With The Truth.” Check ‘em out.
Inflation is forcing central bankers to allow price discovery. There was always price discovery before Lehman – but for much of the last 12 years markets have been in a Fed zombie trance. We mean a real - free market - "cost of capital." - Lawrence McDonald
I was listening to Joseph Wang earlier, talking about the Fed’s two mandates, "price stability” [which is NOT 2% inflation - RH], and employment, and how the Fed price-fixes rates to try to achieve this.
Price-fixing rates is not a Fed mandate.
Interest rates are prices, and the prices convey information. Price control distorts and manipulates and distorts and confounds the natural order of things, and you get unintended and adverse consequences. - Jim Grant
Welcome to the 21st-century. As I wrote in May 2020:
You can yak all you want about "the savings glut" and all the other excuses why rates are this low, but let's be honest - this century it's all about central bank debt monetization to keep rates unnaturally suppressed (and destroy price discovery,) leading to, well, this century.
As Trader Vic Sperandeo said in 2019:
There's not a price in the world that's accurate. Coca-Cola in India is not priced correctly. Now I don't know if it should be higher or lower, but there is no price correctness in the world.
Sell more than a few of these fun coupons and see where rates go.
Having clowns like Bullard, Evans, Daly, Kashkari, Brainard and Powell price-fix rates has distorted the price of every asset on Earth (in a way that coincidentally immensely benefits Jerome Powell’s private equity buddies.)
I don't know if rates should be higher or lower. My point is neither does the Fed, and they shouldn't pretend they do. As Jeff Gundlach quipped the other day, “we should replace the Federal Reserve with the two-year treasury yield.” Let’s try that.
Yeah, sorry - I’m not in the “this rate hiking cycle is worse than the 1980’s” crowd.
I also have a hard time with the ‘this is just like 1932’ narratives. Come on. From that link: “10yr Treasuries are currently on track for their worst H1 since 1788”
As Jim Chanos recently said:
I’ve been kind of surprised since November just how much retail investors continue to want to speculate…I mean Cathy Wood was getting inflows for most of the first quarter…
CNBS and the other infomercials are full of “Is this the bottom? What’s on your buy list?” commentary.
The friend I tweeted about in November 2021, who at the time sounded EXACTLY like everyone I was talking to in March 2020, who was into every crazy EV and work from home meme stock (along of course with the Amazons and Apples) - a guy who couldn’t stop checking stock quotes, and telling me how much he was killing it - now he doesn’t do that.
If I mention stocks now he literally says, “I don’t want to talk about it,” BUT if I ask, “Have you sold?” it’s always, “No. Waiting for my stocks to come back.” He’s not a young guy.
We’re collectively not even as depressed as we were in March 2009, when everyone felt kicked in the gut and never wanted to hear about stocks again. This ain’t 1932. Everyone and their mother still seems to think the Fed will turn tail and rescue them. This can’t be how the greatest mania in history bottoms.
Wow, what a quote from Cathie: “ Volcker doubled the Fed funds from 10% to 20% in less than a year. Powell’s Fed has increased the funds rate 7-fold in the last year and is pointing to another double from here. Its moves already are more draconian than Volcker’s.”
Aside from the intellectual dishonesty, the fact that her portfolio cannot tolerate a negative 7% Fed funds rate and she has to beg for a rate cut says something. Who would give this person money to invest?
Why did I get the feeling listening online to this afternoons discussion that it was more like a script, a movie, that was available to the world to see, both the Powell &, the Senators knocking Powell around with “plastic gloves” resulting in one of the most F’ing boring Shit Show movies 🎥🍿this year. We’ve got big unresolvable issues 🎯😞