It's not like the Fed is gonna finally see a small reaction to one rate hike that will enable them to quickly reverse course and engineer this soft landing that everybody likes to talk about. The minute there is a problem from the rate hikes it's gonna be a crash landing. There's going to be no opportunity to try to soft land this thing because as soon as it goes down it's going to come crashing down even if the Fed immediately goes from whatever they've raised rates to, to zero and launches another round of quantitative easing it's not going to be in time to stop the damage.
Sep 28, 2018
Sep 27, 2018
Federal Reserve: The Removal of the Word "Accommodative"
The only thing that
was significant or potentially
significant about this interest rate hike was the
removal of the word accommodative by the
Federal Reserve in their official statement to
describe the current state of monetary
conditions or monetary policy.
Now, I
initially thought that was a
significant removal of a word obviously
the Federal Reserve thinks very
carefully about the written statements
and so if they chose to remove a word
that was there and they know that people
parsed through these words with a
microscope and so the fact that the word
was missing and obviously it's missing
by intention it wasn't just an accident
that they're trying to send a message
and what I first thought the message was
and I still believe that was the Federal
Reserve views a two percent interest
rate as neither accommodative or restrictive but maybe neutral. The
Federal Reserve now believes that interest rates are high
enough that they would no longer be
described as accommodative.
Sep 25, 2018
Treasury Yields: The Chart Looks Ominous
Look at the bond market, yields on the 10-year and on the 30-year were up again today. We haven't completely broken down yet but to me the chart looks ominous I mean there is the potential for a big break in the bond
market: drop in price, up in yield above 3.50% in the 10-year maybe above 4.00% in the 30-year in the short run.
Sep 24, 2018
Trump, The Stock Market, & The Mid-Term Elections
Donald Trump said that if the
Democrats get voted, the stock market gonna
get cut in half. So, that is a pretty bold
statement to say that, "the stock market
is worth twice as much with me as President as it would be worth if the
Democrats got in power" now, I don't know
if he was referring to the Democrats
taking control of the White House in
2020 or taking control of the Congress
later this year.
I mean maybe the President is pre-blaming a future sell-off in the stock market on the Democrats taking control of Congress. I wouldn't put it past him if we start to see the markets selling off later in the year and the Democrats do take control even if it's only the house and the market tanks I bet that the President will say, "You see, if the Republicans had retained control of Congress then the market would still be going up."
I mean maybe the President is pre-blaming a future sell-off in the stock market on the Democrats taking control of Congress. I wouldn't put it past him if we start to see the markets selling off later in the year and the Democrats do take control even if it's only the house and the market tanks I bet that the President will say, "You see, if the Republicans had retained control of Congress then the market would still be going up."
Sep 20, 2018
The Trade War Continues To Escalate
This trade war continues to escalate and people still think that we're going to win and they still believe that there is some type of method to the madness in that all of these tariffs are simply a down payment on a future where all the tariffs are gone right where the goal here is free trade it's just that in order to get to free trade we have to make trade less free first.
Sep 18, 2018
Europe Wants The Euro To Become The World's Reserve Currency
European Commission
President Jean-Claude Juncker just this
week said publicly that their plan, their
hope is that the Euro becomes a reserve
currency that rivals the US dollar
because Europe is tired of being
depended on the US Dollar.
In fact, he
specifically mentioned the fact that 90 plus percent of European
payments for oil are made in dollars he
says, "Why is this? Why are we buying oil
from Russia and paying in US dollars? It
makes no sense!" And so Europe wants to
wean itself from dollar dependence.
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