Posted on 11/02/2022 1:47:24 PM PDT by Kaiser8408a
Markets are getting stranger than the Paul Pelosi hammer attack.
The S&P 500 index tanked -2.35% after Powell and The Fed failed to pivot and raised the target rate 75 basis points to 4%.
Federal Reserve Chair Jerome Powell opened a new phase in his campaign to regain control of inflation, saying US interest rates will go higher than previously projected, but the path may soon involve smaller hikes.
Addressing reporters Wednesday after the Fed raised rates by 75 basis points for the fourth time in a row, Powell said “incoming data since our last meeting suggests that ultimate level of interest rates will be higher than previously expected.”
Powell said is it would be appropriate to slow the pace of increases “as soon as the next meeting or the one after that. No decision has been made,” he said, while stressing that “we still have some ways” before rates were tight enough.
“It is very premature to be thinking about pausing,” he said.
Fed Funds Futures data point now to a June peak in the target rate of 5.055%, then a decline.
(Excerpt) Read more at confoundedinterest.net ...
Ouch. When I last looked the DJIA was up over 300 points. Closed negative 500.
“Powell: ‘It is very premature’ to talk about pausing interest rate hikes” — that should put an end to all the whispering.
Yes. Looking at the markets sure cheered me up, thanks.
Powell’s narrative changes with the wind. Whatever he says today (if you can understand his double talk and obfuscation) can change tomorrow. The guy is a BS artist.
His policies actually contributed to inflation and he was totally wrong about it being transitory. He has also had numerous ethical scandals during his watch.
He has no idea what he’s doing.
“that should put an end to all the whispering”
**************
Powell and his surrogates can reverse course at any time. Its all so much BS.
Meanwhile a large percentage of the population is straining under the weight of entrenched inflation.
IMHO, Powell knows very well what he is doing, going right along with the WEF plans of destroying the middle class that still is the obstacle to the wanna be rulers desire for world domination.
If they had paid attention to the PPI numbers during the pandemic, and the energy costs and freight costs in late 2021 early 2022 they could have moved sooner and presumably more slowly. They are also fighting Congress who can’t give away money fast enough. They are also fighting the White House who can’t get a sensible energy policy. Never should have shut down the country, never should have ignored science about Covid and potential treatments (which would have been easy to test when 200,000 people a day were getting infected) and we never should have gone all in on vaccines, mandates and passports.
I think we’re gonna be feeling the effects of all that nonsense for years to come. The fed, whatever it is they actually do or why they do it, can’t really change anything. They just engineer where the money moves.
Powell works for the banks. He’s in their pocket.
He’s also in cahoots with all the other central banks around the world.
He could care less about the financial burdens of ordinary citizens.
The fed, whatever it is they actually do or why they do it, can’t really change anything. They just engineer where the money moves.
**********
The Fed is the engineer on the bank money train.
I have posted before that the FED is a giant scam.
Unless its purpose is to take control of our lives.
There is no way the FED can control inflation or create a good life for the man on the street by setting interest rates or printing money.
In short, the key to ending inflation and creating a stable, prosperous life for the man on the street is simple.
Production of goods unhindered by the government.
Inflation is caused by one thing only and that is too many people chasing after too few available goods.
But we can not expect those who got us into this mess to understand how to fix it. If they did understand, it would not have happened to start with.
I have been trading markets for over 35 years and used to be “on the floor” in the wheat option pits as a market maker. I have traded just about everything that has a derivative attached to it, as well as many many equities.
I have to be frank, here. These kids trading this are just market sluts. The average trader is late 20s, early 30s and he is like a duckling. They say that a baby duck will follow a battleship to be its momma if that is the first thing they encounter, and ALL THESE GUYS HAVE KNOWN is easy money from the fed. All of them think they are geniuses, and all of them think that the JOB of the fed is to throw money at them. For 12 years they have been the recipient of a market in an absolute cascade of money so that anyone who can count to 5 made money. You bought it. It went up. You sold it. Easy peasy.
Now we are realizing that this wanton hemorrhaging of money has an effect. It makes the dollar worth less, and people wrongly call that “inflation.” (the “inflation” is the increase in the money supply.. the prices are just the result). These people do not know how to respond to a “market” not propelled along by Uncle Sugar, have never seen a long term bear market, and literally sit around hoping th fed will save them. The fed is raising rates, and this has caused the market to swoon, and it is both amusing and tragic to watch them. All they can do is desperately hope the fed “pivots” and returns to handing out boodle.
Today Powell (chairman of the fed) had a presser. First he released a written statement and ALL HE SAID THAT WAS DIFFERENT was “we will be aware of the long term impact of rate hikes, and aware that we are raising for an effect 6-8 months out” (this is not a quote, but a paraphrase of what was in the statement.
Well, the markets went NUTS! The DOW just zoomed up close to 400 points and the talking heads on CNBC were all warbling about the dovish change and just... HALLELUJAH!!! GLORY!!! THE FED MAY BE LESS HAWKISH. They could just smell those presses cranking back up and good times are gonna roll and BUY BUY BUY!!!
For the record, I dumped 5 different short positions about an hour before the meeting,as they were profitable and I was over leveraged (no, I am not smart... just lucky this time).
Some stuff in the DOW e-minis, some emini S&P, Some bonds and a dollar v british pound position, and a short emini s&p option. I was pretty neat and trim, and only held some short index calls.
I am a newbie to trading the fed like this, though, and still think in the “old timey” way of trading. I just thought “oh crap, I am going to have to roll these short calls out (expiration today) and trade around them.”
I didn’t even know that the fed releases written statements and then has a press conference. So, then Powell himself came out and essentially said “nothing has changed and we are going to continue to raise rates as long as it takes”
BOOM! the pack of starving jackals and screaming zombies reaching for that easy money like a jonesing junkie when you dangle a glassy bag in front of him... they all panicked and sold at once. Market went down total 800 or so points (closed down 500 from yesterday, 800 from hi of day) just as quickly.
This is insane. I have seen more sophisticated investing playing roulette. There are no “markets” here. I am more cynical about this stuff than I have ever been in my life.
I did ok, though. Was profitable going into the fed release and really scored once the fireworks started (sold multiple emini dow futures).
Again, there is no “investing” going on here. This is just guys shooting craps... with your IRAs. I like it, because traders always like volatility. When a market is moving up or down, you can always trade it and make money. The problem with this stuff is they are killing the market. Fact is, they have already killed it. There is just a lot of money right now speculating on the fed and what they will do. It is really disgusting.
I guess I know what a pimp feels like when he runs a stable of girls. It makes money, but there is nothing moral about it.
Wall Street used to be the home base of capitalism. Real capitalism is dead. There is just the husk left to pick over.
Ron Paul was right. The fed is THE most destructive, anti free market, big government infringement on freedom there ever has been or will be. It will be the death of the republic.
Would our national debt be over $31 trillion if the Fed wasn’t there to buy the bonds? I don’t believe so.
Would we get involved in so many wars and conflicts if the Fed wasn’t there to enable excessive government spending? I don’t believe so.
Would the Fed be more transparent if it was an impartial policy maker? I don’t believe so.
Great post.
Thank you.
Good post.
I always tell people that if they are considering “investing” in the stock market—they should stop—and go to the casino.
At least at the casino you know what the rules are.
I am too old to have anything to do with these “markets”.
And thus the reason they keep running the market up then going home with empty pockets when the fed does what it said it would.
Maybe one day the fools will run out of money.
As an investor I am frozen having taken out what I think is enough to ride for five years from now. I hope not to sell a thing as we are into meat territory. Never sell the cow if you can. Just milk her.
that is so right.
Maybe or maybe not.
Everything you listed could’ve been done without a central bank.
We’ve had a high national debt without a central bank(See post Civil War)
Government spending is a Congressional responsibility.(Answerable to the people & people like spending)
Wars happen because people love warfare.(Pick up a history book)
With or without a central bank you’ll have the same policies.(The world works the same way no matter the era)
COULD HAVE these things occurred without a central bank?
Well, yah.
However, the likelihood is so small as to be imperceptible.
Government spending is the culprit as you rightly state.
CENTRAL BANKS ARE KEY TO GOVERNMENT DEFICIT SPENDING, though. Otherwise, they are forced to go to MARKETS to borrow. Central banks can and do generate “money” out of nothing to prop up a bond market where no real demand exists. I don’t know how long it has been going on where Japan has sold NONE of their bonds.... zero. Their central bank absorbs them all. I have been shorting 30 year treasuries since they were at 134. I look for them to go down AT LEAST to 110, but that will bring another set of excruciating circumstances and I look for the Fed to, once again, try to monkey with the markets.
This thing is going to blow up spectacularly, and it will be rooted in Central Bannks.
This might be interesting reading:
http://charleshughsmith.blogspot.com/2022/11/the-era-of-all-powerful-central-banks.html
Every citizen needs to check their stock/retirement portfolio before going to vote on Tuesday.
Watching it drop as we speak. But, muh abortion!
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