It was a good run, with lots of drama along the way. From 2009 until now, the market has increased by $15 trillion in market capitalization, largely thanks to the actions of the Federal Reserve.
I am not going to glorify the actions of The Bearded Clam, aka Dr. Benjamin Bernanke, today. Instead, I will attempt to document and editorialize what I believe will end up being a massive mistake by the Yellen Fed.
Everything changes after today. The Fed backstop that saved our bacon since 2009 is gone.
RIP-QE
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Yellen’s going to announce more QE, but it will be stocks directly, and only those in which Bill Ackman has a sizeable stake.
Maybe they’ll try qualitative easing instead?
ha
No rate hike ever.
No way she raises rates. They’ll push it out toward summer.
Are there really people out there thinking this?
How many of you are there? Maybe the trade is to short the pre-Fed bounce.
And rightly so. TBT ftw. However, I do hedge it occasionally w/TLT and frequently sell calls against it! Now that’s commitment.
you people are in denial.
She is 100% hiking today
Yep and I think we lift off on a face ripper. But what do I know?
My ridiculous prediction thrown in the mix:
A very small rate hike. The fed will appear to “know what it is doing” for confidence with its announcement.
However, the rate hike will be small due to “continuing structural factors/headwinds facing the economy.”
Think: .0025%
The hike will be just enough to appease the inflation nuts. While not enough to induce a sell off stocks at the institutional level. Thus, eventually,forcing the retail investor back into the pool to take risk once they realize….this small of a rate hike doesn’t do squat for savers.
Furthermore: Yellen is not “1982 Paul Volker.”
The days of big upside surprise rate hikes are long over. The fed has been trying to lead markets for years through communication.
What is funny is most bulls have argued for the last 5 years “The economy is doing great. Buy stocks”
Now that a rate hike is actually here: “The economy is doing terrible. Don’t hike the rate. More QE.”
Which is it? You can’t have it both ways.
So in reality the bull case argument boils down to:
The “economy is doing great and you should buy stocks – only when there is QE and ZIRP.” What is funny is: the economy is not doing great if there is QE and ZIRP. Neither of those policies are indicative of any traditionally healthy economy.
Wich is it bulls?
Rate hike may in fact cause market to rip higher. It’s end of year chicanery. I am long term bearish; short term optimistic.
Yes, it will rip to show support to the policy enacted. Then shovel to the back of the head to ring 2016.
.25 raise is non-factor. Sky is not falling. Market is not crashing. Stop the whining. Oil will recover from crazy lows. Those who bought junk bonds will get bitch-slapped as they should but not bankrupted. Now carry on.
Yes oil will recover. If.
A: the entire Middle East goes completely and irrevocably to hell in a hand basket carried by 72 virgins.
B: The world is still here in 2030.
Brazil was just cut to junk, but sure.
Anyhow, if they raise rates, stocks still go higher. I just don’t see a world with higher interest rates, tell me I’m in denial… Oh, you already did lol
A rate hike could be an ease. No, seriously.
http://www.themoneyillusion.com/?p=31368
every bear market starts with a rate hike
it’s coming and you’re all gonna die
blow off top first tho maybe
The only thing nobody is predicting is flat stocks post Fed.
So flat stocks post Fed is the most likely outcome imo.
The market will go down not because of the 1/4 basis being bandied about by Grandma Yellen.
The coming crash will be accomplished via billions of $$ of paper assets which were based on oil at $80/bbl. Crude will be deemed a resounding comeback if it reaches $60 within the next 5 years. And I’m guessing we hit $25 first.
Indeud.