What This Market Needs is a Rate Hike, or Three

Yesterday’s Fed statement personified fuckery. I am no longer going to name call them as “stupid” or “morons”, for that gives them an easy way out of the nonsensical bullshit they perpetuate. The people at the Fed are the brightest and deliberate in their actions. It’s obvious to me they are trying to do something, just like Greenspan was trying to do something via all of them rate hikes in 2006-2007.

We may need to beware of the Fed.

JP Morgan on Fed statement:

What was to be a somewhat sleepy, noncommittal FOMC statement turned out to be a bit more interesting and, on balance, more hawkish. If nothing else, it reminded markets that there still is a risk of a Fed that starts its rate hiking in December….While remaining noncommittal (as it must), the Fed has introduced language to more strongly emphasize its long-held view that 1) it is data dependent and 2) every meeting is live for a potential rate hike (in this case: December). Not surprisingly, markets are taking notice.

Oil and gold are getting poleaxed this morning, off by 1.5%. The market is starting to worry about a December rate hike, because, umm, we need it so badly.

Global luxury goods sales will register its worst year since Lehman, growing less than 3%. The big hurt is coming from China, who represents more than 30% of global luxury goods sales. It’s obvious to everyone that the economies of the world are struggling. As to why the Fed believes this tepid economy deserves tightening, I have no fucking idea.

Once rates go up, weak companies will bankrupt amidst tighter credit. Maybe that’s what the Fed is trying to do: wash away the weak so that the strong might flourish.

Either way, prepare for some volatility and extreme fuckery.