iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
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Fed Acquiesces to Markets, Indicates It’ll Pause (no homo) Soon

This is the sort of bullshit one should expect from the Fed. Remember this always: it is their job to make stocks go higher. Without a positive wealth effect, pensions get defunded, budgets disjointed, chaos reigns supreme. If you’re shorting stocks and betting on a black swan, just know you’re taking on a low probability trade.

Source: CNBC

“With an increase in the target range at this meeting, the federal funds rate would be at or close to the lower end of the range of estimates of the longer-run neutral interest rate, and participants expressed that recent developments, including the volatility in financial markets and the increased concerns about global growth, made the appropriate extent and timing of future policy firming less clear than earlier,” the meeting summary stated.

The indecision was reflected in rate forecasts among individual members. Officials cut their expected moves this year from four to two, citing a range of concerns about growth and volatility in the financial markets.

“Concerns over escalating trade tensions, global growth prospects, and the sustainability of corporate earnings growth were among the factors that appeared to contribute to a significant drop in U.S. equity prices,” the minutes said.

The statement after the December meeting replaced the phrase “the Committee expects that further gradual increases” would be appropriate, to “judges that some further gradual increases” are coming. Using “judges,” the minutes noted, was a signal to markets of the data-dependency the Fed will employ. Also, “some” was meant to imply a “relatively limited amount” of hikes would be coming.

WTI is +5%. Junk bonds are green, and stocks are ripping to session highs. If I can teach you but one thing it is this: THERE ARE ENDLESS POOLS OF GENIUSES WHO KNEW MORE, BROKE AND DISHEVELED, AT THE BOTTOM OF THE SEA, WHO BET AGAINST PROSPERITY. It’s a hard gamble, and you have to be hard boiled and belligerent to pull it off. You’re better off going with the sheep.

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7 comments

  1. numbersgame

    I haven’t looked it up, but just curious:
    what happens to the stock market 1 year after FED pauses rate hikes?

    My theory is that FED pauses before recessions, and the stock market drops before recessions, so FED pausing is a leading indicator of bear markets.

    In other news, Trump chaos is trying to end the rally again:
    https://thehill.com/homenews/administration/424551-trump-says-emergency-declaration-coming-without-border-deal-with-dems

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  2. helen

    Putting on SOXS now:)

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  3. dollargoal

    Got my expected strong beginning of the year rally from that bullish pattern posted on Jan 3rd with NDX 6600 target met. https://www.tradingview.com/x/C3tHbqgi/ Now shifting from buy the dips bias to neutral bias until a b/o above downtrending resistance is confirmed, or not. Nice call Fly on that flip to bullish!

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  4. the hungry dog

    Powell “Bent the Knee” to the market and Trump.

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  5. tjnyt

    Up another 20%, reminder to self,”don’t screw up”. Sold apa, dvn, hp, sq, wdc, aapl, nbr,stmp. Added to ge and bmy.

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