More Evidence The Fed is Lost: Zerohedge Gets Email From FOMC for Research Report

What the fuck is going on here?

Tyler just put the Fed on blast.

Via ZH:

As we explained in detail, the main reason why the Fed should be concerned, is that according to a research report from BofA’s Marc Cabana which we used extensively in the report, the Fed may be forced to launch Quantitative Easing as soon as Q4 to provide the market with the much needed liquidity, or else suffer the consequences of a major liquidity shortage. To wit, in describing the various steps the Fed can engage in, this is what the BofA strategist said:

Outright QE: after OMO dealer capacity is exhausted the Fed may need to start permanently expanding its balance sheet. The Fed would likely describe this as offsetting “bank reserve demand and growth in other non-reserve liabilities”. Regardless, it would represent the Fed permanently buying USTs outright to maintain control of funding markets well above the ZLB.

Well, it appears that the Fed paid attention, because moments ago we received an email from a Federal Reserve researcher which should make everyone very, very nervous. Specifically, the “rather urgent request” from a Fed staffer (no, not Edward Quince) seeks the full Cabana report whose gist, as noted above, is that the Fed will have to launch QE4 in very short notice to offset the upcoming liquidity drain

Sigh.

I made a stupid trade this morning, buying TVIX into the hell storm. It was an emotionally triggered trade and I ended up closing it out for a 7% loss. My losses have been few and far in between lately, sublimely position in gold and trading the inverses with supreme abilities. HOWEVER, I am cognizant of my where my strengths lie, which is more of a general direction trending market. The intra-day stuff has poleaxed me incredibly over the years and I’m mindful to be careful about falling back into the emotions of this game.

This is a game that requires extreme zen like concentration and a very steady hand. If you’re too soft or hard, you’ll bend and break. “The Fly” was made to trade markets, no matter how harmful or ebullient they might be.

Going forward, I’ll keep a large cash position, a permanent gold position, and intermittent trades that lean towards end of day.

No big deal here. Booked a 12% gains in SEDG on the overnight ripper. I also ripped out a 10% gain in HUBS on yet another ripper. The Exodus Quant has been 15% allocated in gold — no big deal. Another no biggie is my position in MTCH — also purchased by the quant.

Also, I have 15% of my trading account long gold miners — all up handsomely.

It’s noteworthy to note I have a 55% cash position, not breaking a sweat, cool and collective — betting on a crash TODAY.

“Today you say?”

TODAY.

Rates are collapsing this morning, with the 10yr touching down at 1.62%. Futures are -300 and gold is soaring above $1,500. While this might seem like an ordinary decline, it is anything but ordinary.

Since 2008, we’ve depended on the Federal Reserve to bail us out of jams. Whether you agree with the policies or not doesn’t matter. The reality is, the S&P bottomed at 666 in 2009 and we’ve been going up since then — mainly because of Fed policies to buttress markets. With Trump demanding the Fed acquiesce to his demands under the menace of being fired, the dynamic of the Fed being a holy and sanctimonious organization whose sole purpose is to be smart and place a bid in markets is now gone. Finished. They’ve been compromised and because of that, rendered persona non grata.

What sort of market will this be with the Fed being a non-player, simply abiding by a rank amateur Trump by slashing rates at record highs and then watching in horror as markets reel lower thanks to an acceleration of the US-China trade war?

Here’s Trump this morning, rendering the Fed even more useless and pathetic.

“Three more Central Banks cut rates.” Our problem is not China – We are stronger than ever, money is pouring into the U.S. while China is losing companies by the thousands to other countries, and their currency is under siege – Our problem is a Federal Reserve that is too…..

— Donald J. Trump (@realDonaldTrump) August 7, 2019

….terrible thing to watch, especially when things could be taken care of sooo easily. We will WIN anyway, but it would be much easier if the Fed understood, which they don’t, that we are competing against other countries, all of whom want to do well at our expense!

— Donald J. Trump (@realDonaldTrump) August 7, 2019

If you’re thinking markets will bounce back sharply because MUH BTFD — good luck. This time it’s different — because this time the Fed is off the table. Now we have Trump dictating foreign policy and Fed policy — pissed the fuck off after 3 years of inane Russiaphobia via Mueller, ebbing into an election campaign that is sure to be rife with disgusting rhetoric and emotions on tilt.

Watch for yields breaking below 1.5% towards record lows and keep a close eye on crude breaking $50 to the downside. Gold should be, inexorably, a staple in your portfolios, along with cash. Shorting below $180 on the Qs is a layup trade.

Thank you Mr. Wonderful!

What the fuck is going on here? Cramer is shitting on western press to talk shit about China? Has he been cloned and replaced?

Thank you Mr. Wonderful, I like you too! @kevinolearytv @CNBC pic.twitter.com/8n5qcTVSp2

— Donald J. Trump (@realDonaldTrump) August 6, 2019

Thank you @JimCramer @CNBC! pic.twitter.com/DW7HDA0WEK

— Donald J. Trump (@realDonaldTrump) August 6, 2019

Context.

Mr. Wonderful on Trump policy vs China. pic.twitter.com/BzJzGBhRmu

— The_Real_Fly (@The_Real_Fly) August 6, 2019

In other news, Fly had THREE BIG WINS in the after hour’s today: SEDG, HUBS, MTCH.

If you walked away like me and only observed the end of day price action — you’ve got to be bullish on this close. The Nasdaq, barring another Trump tweet, is likely to gap fill a bit higher from here and offer some upside to long dicked bulls now. Weak longs got pressed the fuck out of their positions today, with the whipsaw action scaring Junior at the trading turret until he shit his pants.

I booked a profit in DRIP and also averaged down in ZEN.

Solid as fuck close, one worth betting on.

That’s all I have, other than watch out for Trump’s revenge on President Xi. Anything can happen out there — wild times.

I don’t know what to make of this — but I am not adding to any positions until after 3:30. I suggest you wait for a clear direction before starting anything new.

06 Aug – 10:47:01 AM [RTRS WHITE HOUSE TRADE ADVISER NAVARRO CALLS ON FED TO CUT INTEREST RATES BY ANOTHER THREE-QUARTERS OF A POINT OR FULL POINT BY END OF YEAR TO BRING U.S. RATES INTO LINE WITH RATES ELSEWHERE -FOX NEWS INTERVIEW (TRUMP DEEPENING TRADE WAR FOR CUT)

— Alastair Williamson (@StockBoardAsset) August 6, 2019

Futures reversed course after China said the Yuan wouldn’t keep going lower. Now everyone is jerking off to the tape. Some of you out there, evil malevolent people, probably thought Le Fly would take an L. Those people are wrong. As a point in fact, the last thing I did yesterday was buy DRIP — because I knew oil could serve as an outlier to the markets — down while up and that sort of thing.

On this very morning, that’s EXACTLY what transpired.

See pal, that’s who I am.

Fuck you go home and play with your kids.

I booked an easy as pie win on DRIP today, “a minor jaunt” if what we call it in the northeast — for the express purposes of profit. While some of you might try to duplicate the swashbuckling of Le Fly, I do not recommend it for rookies — for it is both dangerous and absurd for you to compete with me.

Going forward, I bought stock in a SAAS name this morning and will add to the market, or subtract from it — as I deem necessary.

There’s always a different narrative driving prices. It changes all the time and if you’re not paying attention to the latest flavor — you’ll be out of the loop. Because of the US-China trade war, traders are looking for signs of Chinese retaliation — which is most easily seen in the USD/CNY cross. When the yuan depreciates, it’s viewed as a manipulated affront in the trade war — which is not exactly true — but oh well.

Starting out the evening, Dow futures were -500. Now we’re barely down 100 and trending up. Truth is, whenever you get these really dire overnight sessions — they always rebound.

If Yuan drops, so will futures. For now, I’d expect markets to drift into European trade. I do not think this move is overtly bullish, however. These overnight jerk off sessions are filled with retards playing from their pajamas. We could fucking tank thru the god damned floor boards tomorrow morning after another Trump tweet. Kyle Bass is suggesting Trump is going to seize assets from members of the CCP. Who knows what could happen next?

All I know is that the trend is now lower. This might change — but we should respect it. Just because futures battled off the ground does not mean we’re going to have a gangbuster session tomorrow. Be careful of the misdirection.

In other news, I just got back from NYC — walking my kids and wife around — dining and shopping like fools. I bumped into iBC’s VINCENZO ILLUMINATI in the Sky-Walk and had a pleasant talk amidst some perfect weather happy moods. Incidentally, I used to host iBC employee dinners in NYC around this time each and every year, up until 2015. We used to eat well and drink heartily and cap off the night with cigars.

On the Lyme front, BIG ASS rash has developed. I’ll be going for a blood test tomorrow morning. I do not need the test, for I already know that I am cursed and have the most debilitating form of Lyme in existence.

It’s real easy to come to iBankCoin and hate on the caretaker here, since this Fly fellow is always winning in the market and talking shit. He must be lying. I bet he lives in his mother’s basement. I’ve heard them all. But what’s important for you to know, aside from all of these grandiose stock market victories, such as being 60% weighted gold and 15% inverse ETFs into today’s calamity, I am plagued in a hardened way by other maladies.

For example, just yesterday, as I was about to hop into the shower, I caught a glimpse of my olympian styled body and bore witness to a GIGANTIC FUCKING TICK sucking the life out of my body. I quickly ripped it off and threw it into the toilet. Now I have a giant rash and most likely Lyme disease. Since I have multiple errands to attend to today, none of which have anything to do with things that I want to do, I am unable to see a doctor to get the proper medicine that might save my life.

As I am attempting to leave the state of NJ for warmer climes down south, things keep breaking inside of House Fly, costing thousands in repair. Gigantic trees collapsing in my yard, snapping fences in half, severing irrigation lines, pipes flying in the air in need of immediate repair.

My life is one gigantic struggle filled with wanton stress and liabilities that can only be paid by me. My sole outlet from this chaotic world of crass malovolence is my stock market prowess and my writing. Without any of those I am merely a pleb eating Italian ices, just like the lot of you, on a hot summer’s night.

In short, be grateful a person, such as “The Fly” exists, and instead of being envious of him, just know that your lives are most likely happier and better, so pity him and offer words of fantastic encouragement.

In other news, stocks are fucking crashing thru the floor boards today and I intend to be on the road for the final hours of trade. I am leaning towards a long directional bet, for various reasons. If you’re in Exodus, I’ll likely pop into the Pelican Room to relay by findings. Trade alerts will not be going out today.

Ciao.