A Fed Loosening Cycle is About to Occur

All of the important people have convened at Jackson Hole to discuss policy concerns, the things that shape your lives in ways you don’t truly understand.

Want a new home? They’ll decide what you will pay at Jackson Hole.

How about that new car? Jackson Hole.

You and your fiancé want to get married this fall? All Jackson Hole will decide on the costs.

The velocity of money is about to go up. The presumption of the bears is that ‘it doesn’t matter’ because ‘we have too much debt.’ I used to believe in all of that but bur living in the real world and not some fucking fantasy has taught me not to touch the Fed’s kettle when it’s hot. I’ve got the burns to show for my mistakes.

In a sense, the Fed has eliminated the economic cycle. Gone are the days of boom bust boom. Now we just plod along higher with a stable unemployment rate, GDP buoyed by an ever increasing population. The correlation between population increase and GDP is almost 1.00.

But what about how shitty stocks have been recently?

In the short term there are plenty of things that can go wrong. As a trade we remain vigilant and will short this fucking tape into the ground if we must. But in the intermediate term into the Fed cuts, there isn’t a good bear case to be made, lest we are now discussing the specter of WW3, which on the surface might seem scary and foreboding; but ultimately that too is super bullish, lending to all sort of new money creation and industry.

I don’t make the rules; I just follow them.