I keep seeing this little fucker on CNBC talking about buying stocks hand over fist, proclaiming this to be a garden varietal correction and then in the next sentence say he’s worried that the Fed isn’t going to RAISE rates and how that would be bad.
Why would it be bad?
Here comes the good part, something shared by fucktards globally.
He said “the Fed needs to normalize rates now so when the next recession hits, they can lower rates.” He furthered by suggesting if we had to do another round of QE, we’d be in big trouble.
Okay, my turn.
What evidence do you have that says QE didn’t work? Last I checked, Dr. Benjamin Bernanke saved the western world from the savage. His investments were brilliant, both in treasuries and the mortgage market. The Fed has massive cap gains on their balance sheet, thanks to QE. Moreover, we have never recovered from the 2008 crisis. We only papered over it. The only way to truly recover is to grow like a motherfucker or reset the national balance sheet, aka go bankrupt. We both know that isn’t going to happen, voluntarily.
So, the only option we have available to us is to extend the death sentence. Global growth is slowing in a big way and the Fed cannot be seen to be ridiculous, by raising rates in an environment like this.
Like it or not, this is the new normal. The old rules and tools do not apply. Raising rates for the sake of being able to cut them later is a ridiculously laughable proposition. We have 19 trillion in debt, son. There isn’t an advantage to be had by raising rates with that sort of fuckery.
The best thing the Fed can do now is remove the option of raising rates in 2015. That would stoke the flames of speculation and lend confidence to the canaille day trader, who is now in his natural peasant form, without the accouterments of faux wealth to make him/her feel better about themselves.
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What if the US did “declare bankruptcy” and decide that all US holders of debt (pensions, individuals, etc.) would get “equity” in the clean enterprise (via new debt) and all foreigners (such as China) would be wiped out…
1. How much would that reduce the debt (to see if it’s worth doing)?
2. How likely is it somebody would wage war against us (and do we care…we love war)?
3. What trade relations impacts might it have (and do we care, worst case we bring manufacturing back to the USA)?
Debt cannot be paid off in aggregate. If the US defaulted on a trillion of it’s debt, the global economy would shrink by a trillion dollars. That’s about it. If the economy were to grow back to it’s current level, someone else now holds the debt. Every asset has a corresponding liability. It may be on a household, corporate, or another government’s balance sheet, but it has to exist one way or another.
QE4Life
You mean QE4Ever
Not getting in till I get a Fly Trade Alert!
How about we get back to revolutionizing industry and blazing a trail toward freedom!
It’s time for 3D printed sex bots in my GOOG self driving car hailed by UBER traveling home from a Super Bowl party that served atomized Weed and powdered vodka alongside SHAK and YUM. Check me out on Periscope, I’ll have my GPRO active.
Go Fly Go.!!!!!!!!!
Now in his natural peasant form, haha. Here’s a picture as some of us wander around buying up cheap oil and biotechs on discount: http://www.history.com/shows/vikings/pictures/vikings-season-1-battles/vikings_gallery_battles_1
I would imagine Dr. Fly envisions peasant canaille day traders lining up like this for that rate-removal http://www.history.com/images/media/slideshow/soup-kitchens-and-bread-lines/bread-line-in-depression-new-york.jpg
haha !! Nice. I bet we couldn’t even have a polite bread line these days, it would probably look more like a somali UN food drop-off with humvees and troops keeping the peace.
i bet Yellen will stay on course and lift rates 2015 ( maybe not september ..bit later)
market are alredy digesting it
reshoring is a growing trend that keeps job growth , made in America is an old-new premium , China is loosing confidence but no way a China financial collapse doen’t mean China is finished ( no way ) and btw the only way China can keep growth is mantaining good traits with western countries ..they’re stupid but not that much ..
loosing…..
the selling might not be finished as there’s some weights changing places , but there’s no way a big collapse is in the cards .. but a big end of year rally is.. USA still the safest bet ..
I will bet all of the money that the Fed doesn’t raise rates in September.
I’d be happy to a 1 or 2 months delay .. many anal yst have same opinion .. it seems ok ..
China markets indexes made close to 100% before the selloff.. we’re not that much collapsed .. it’s just the china financial bubble that collapsed.. we’re pretty close to begin of 2015 levels
usa markets did not make 100% this year.. and are lil bit more regulated .. /no s
We will look back on this time on day and wonder why the federal reserve was so stupid and so late in the game to increase interest rates. All to keep propping up the market? We create tech bubble 2.0, private market bubble and housing market 2.0, all so that people like The Fly can have a happy market.
it propped economy btw
WE are so fucked.
Valuations are insanely high when you consider the fact that we’re not going thru a 90s-esque period of economic expansion. The Fed has coddled equity speculation and unchecked stock market greed for the past 6yrs and now they’re fucked. The end game is that they cannot raise rates, and might as well signal to the market that 2015 hike is off the table. When global growth is restored, rates can begin to come off of 0%. Is it possible to see a global recession/bull market? Commodity prices have been telling the tale for over a year now. Europe = fucked, BRICS = Fucked. And the Chinese are eating Yellens lunch a daily basis. We may rally/retrace, but until the FED takes 2015 rate hike off the table, the selling will commence, perhaps late Sept/Oct.
so the fed rise a quarter of point the market collapse ? to ?
we’re not going through a 90 but we’re going through a different period .. tech green and reshoring a nice part of work home will guide and improve stability .liquidity is not missing ..
Mentioning a rate hike is de facto tightening, just look at the dollar. The Fed already tightened and tricked everyone. What do you think happened to commodities and China? The Fed bent everyone over.
There will be no actual hawkish monetary policy ever again, barring really severe inflation, which is nearly impossible in an economy with this much slack.
now what?
All the riff raff out in full force today for the Sucker-Rally Le Fly.
My contribution here to help pass the time:
https://www.youtube.com/watch?v=ZRuYQ9KRJms