Fuckery at its finest. Citi now joins a chorus of Fed hike cheerleaders, in what could only be described as “well, shit, that didn’t work, so let’s try this.”
“The growing size of household holdings of interest-bearing assets has reached the point where the ‘permanent’ income gained from sustained higher interest rates has a material impact on expenditures,” Lee asserted. “Consequently, if interest rates rise by one percentage point, this could boost the household income by $170 billion (i.e., $256.2 billion to $85.4 billion) and consumption by 1 percent.”
In other words, this analyst no longer believes in the ‘wealth effect’ of higher stock prices, which was crammed down our throats for the past 5 years. Now, he believes higher rates will enable old fuckers with CDs to save more; hence, they’ll be able to buy more wheeled chairs, for cash, money.
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Amen to that. Gimme a 5-6% CD and guaranteed return of principle and I’ll spend more. Keep this uncertainty, ZIRP/NIRP, HFT/algo market thievery going and I’ll trade with a small % of cash that earns nothing…making me spend not so much.
Sure, anyone can offer you a big cd rate, hell they can offer 20% if they’re going bust.
I see 10-year yields spiking this morning because these hard-candy sucking bastards have to get in the headlines every damn week. Literally. I am aiming to buy a house shortly and see this sh*t yet again with yields – so hard to do anything with these fed f*ckers in the news with some release or speaking engagement every damn week. This pisses me off. I hope this damn economy plummets hard in January and they are laughed off the planet for raising rates only to lower them again.
I second that. To the gallows for them all.
The Citi dude should be fired for competence. What a fucking idiot. So he’s suggesting the Fed should go on a retiree target. Fucking moron.
Do they mean the ones trying to get a mortgage?
Oprah elects Obama now wins again. $WTW
i can believe that to a small degree. the “wealth gain” from stocks goes mostly to the upper class and corporate job folks with 401k’s….how much shit have they bought in the last 5 years? They’ve had their crack at housing in the most desirable spots, they’ve bought all the luxury goods and cars they could want.
The average person doesn’t hold stocks. They put money in savings accounts and bank cd’s. Cheap gas at the pump and decent savings interest rates is what’s going to make them feel rich and feel like splurging “because they deserve it.”
The problem is that consumer credit cards are tied market rate plus a ridiculous add on. So a raise of 1% will probably raise everyone’s credit card rate by 2-3%. IE, citibank wins.