Earlier this week, we talked about the Quads – a powerful tracking tool that actually follows money in and out of stock market sectors. The Fed doesn’t make it easy to get to the truth; they’d rather we all bought... Read more »
There's one constant underpinning this market: The Fed. It has literally lost its collective mind (not that I feel sorry for them), like headless chickens running aimlessly around the otherwise impressive façade of the Eccles Building.
My daughter says I write about the Fed too much, but there's no way around it: The Fed is the market now.
We've presented plenty of evidence that this cadre of PhDs is simply making up policy as they go; forever scurrying to keep their Wall Street master smiling.
This experiment, of course, ends badly, but in the near-term we also know that when the Fed is pumping steroids (which is to say slashing rates and printing money at the same time), the markets will go up.
In October, the money printers returned, and I mean big time-which prompted me, the jaded macro bear, to pause my fishing trip out West and scream "Party on! The money printer is back!"
Earlier this week, I shared compelling evidence that the Fed’s unprecedented money-printing ($278 billion being just the latest round) has distorted stock market forces to such a degree that this current, explosive rally doesn’t really have a foreseeable end. The... Read more »
In the last two weeks, market winds have been changing dramatically in both direction and speed – which is typical in a Fed-driven Twilight Zone. In such muted, back-and-forth markets, the signals get confused and it’s easy to feel frustrated.... Read more »
Things are falling apart across the Atlantic, and the implications for U.S. investors are now loud and clear.
As an American who grew up on baseball, yet was educated and employed (partly) in Germany with a residence today in France, I suppose it's fair to say I have a global perspective as to both the realities and stereotypes of certain cultural and financial nuances.
As for Germany, well, it conjures up a great deal of stereotypes and ideas, both fair and unfair. I won't defend or address those here.
However, what most of us on both sides of the Atlantic (including the French...) can agree upon is that Germany has a uniquely strong passion for disciplined spending, thrifty saving, and currency risk sensitivity.
This land of Max Weber, along with blunt speak economists like Ludwig von Mises or Walter Eucken, is all too aware (remember Weimar) of what happens when wheel barrels of worthless money are rolled out to solve chronic debt problems.
Welcome back to What's Happening Now, following a grim week for investors, especially those hanging on for that last evasive yet entirely possible "melt-up" in stocks to come should the Fed print more dollars out of thin air.
Beyond (and more important than) the impeachment proceedings launched in the U.S. last week, China trade negotiations fell off track again as new U.S. threats to contain even passive investing in China, along with Chinese company listings on U.S. Exchanges, were floated.
A resolution of the trade war would send markets temporarily much higher; as of today, however, such a resolution remains elusive.
In the meantime, U.S. manufacturing data continued to plummet... to below breakeven.
And on the Central Bank front, necessary Fed repo rescues alarmed the U.S. as chaos at the European Central Bank mounted.
In short, a lot is going on and not much of it is objectively good, though further Fed "stimulus" could easily buy us more time and highs.