For those new to this game, it never used to be like this. Before the dot com bubble bursted the Fed was more or less a passive thought in the big scheme of things, tweaking rates here or there but for the most part no one paid too much attention to them. The Fed was always important, but we didn’t rely upon them for our stock prices. Stocks were guided up and down by earnings and analyst upgrades/downgrades and mergers and rumors of takeovers. Today, because of the zero rate environment, all we care about is what the Fed is going to do next.
The reason why we are so reliant upon them is because we died in 2008 and the Fed replaced the economy with a Frankenstein bastardized version of something that should never have been created. Gone are the days when you could receive 5% interest in your savings account, even higher for a CD. Now you get NOTHING and if you want to earn a rate of return you must invest in stocks or bonds. The Fed has created a monster and every time they try to put the genie back into the bottle, said genie gets irate and does malevolent things.
Today is a Fed day and we all wonder what can the Fed do with CPI at 7% and stocks down 40% off their 52 week highs? I think the answer is obvious — they should not be in a position to do anything. But they will and they shall ignore their mandate in favor of saving stocks. My confidence in this isn’t high, only because it defies logic and reason. But we are talking about the Fed here, not an organization with integrity.
Futures are way up and I suspect if the Fed accommodates traders we shall continue to go way up. But if the Fed sticks to their guns and tells us they mean business — this entire rally might wash away.
Decisions decisions.
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Yeah this should be straightforward yet I’m still nervous.
That said, with how commodities are acting this morning, even if the Fed turns tail margin compression and bad times are coming.
The higher rate crowd does have one card up our sleeve.
Higher interest rates won’t set off a debt crisis for like 10 years. This talk of debt is silly; everyone is speaking like governments have variable rate mortgages. The debt load is skewed long dated.
So hopefully the Fed decides the path of least resistance is to prick the bubble and inflation now and tells themselves they’ll have time to get interest rates back down before government debt burns.
Let’s not forget, the real CPI, not their BS calculation, is closer to 15%. They know it and they also know they’re trapped.
How do you trust a government that blatantly lies about data?
The fed will rescue pelosi’s portfolio you got damn rubes. Do you think she’s throwing 50M into tech options to lose it? Are you all dense?
Do you know which kind of options she bought?
Companies in Pelosi’s 2021 trading disclosures
Apple (AAPL.O)
Tesla (TSLA.O)
Amazon
Alphabet (GOOGL.O)
Microsoft (MSFT.O)
Walt Disney Co (DIS.N)
Nvidia (NVDA.O)
Slack Technologies
Micron Technology (MU.O)
Roblox (RBLX.N)
Salesforce.com (CRM.N)
AllianceBernstein Holding (AB.N)
Calls
leap calls. not short dated
Yes
Huge retail inventories build +4.4%. Largest on record.
This could counteract the inflation narrative. Or not. The supply chain was having trouble before the holiday retail buildup but this definitely doesn’t hurt.
Pete got back from maternity leave and fixed everything!
Here’s the wildcard.
Those in charge want to kill everyone with jabs of mRNA poison. What makes anyone think they also don’t want to bankrupt everyone too?
Joe Bribem: “It’s going to be a very dark winter.”
He was reading from a script like he always does, unless he’s cursing at someone.
Carry on.
IMO, the Fed has to react and change policy. Inflation, and how it is affecting Main Street must be addressed. If the Fed chooses not to, expect a further escalation in civil disorder.
Does it really matter if they do or they don’t?
More and more non-super rich folks are passing on the market and just saving or spending cash.. doesn’t matter.
Claim BK
File BK
Rinse and Repeat
Oil and gas price are asking the Fed to shock us. …but I’ve no clue what they’ll actually do …as I don’t know what the agenda is of the folks running this country.
Jimmy Bowtie is a solid investor but as many of his generation; he owns zero crypto.
His reasoning: if it gets too successful governments will shut it down. Quite a reasonable opinion, as all serious dollar competitors prior to btc were cease & desisted or prosecuted.
I follow Jim’s commodity advice but I’m betting against him wrt crypto.
I think there will be consolidation in the years to come, but a year from now I think there will be many more cryptos than today.
We’re gonna find out.
Today
https://coinmarketcap.com/ shows 17,151 cryptos
https://www.coingecko.com shows 12,881 cryptos