The Fed and their unholy alliance with Treasury have created fake markets. Until that nonsense is discredited along with their promoters you can trust very little in the markets.
The Fed and their unholy alliance with Treasury have created fake markets. Until that nonsense is discredited along with their promoters you can trust very little in the markets.
What is this, the year 1915?
Interest rates manufactured by the Fed and not the market. Government spending monetized by Treasury and Fed operations. Sure totally normal, no consequences fir unhinged behavior. OK Millennial.
I don’t believe that’s the case. The Fed has an inflation target (and a rough employment target), and believes that raising rates might help it get there. If the Fed could conceive any way of getting there and not “reducing demand”, they would.
The problem is that the Fed wrongly believes there to be a 1:1 correspondence between interest rates and demand, and also between demand and inflation. Neither is true. The Fed hasn’t even yet shown that it acknowledges the concept of stagflation.
I implore you once again to think about what is actually causing inflation, and if the Fed can do anything about it with their policy tools.
meh. The core job of the Fed is to try to change demand. They buy bonds (to put money into the economy) when they want more demand, they sell bonds (to take money out of the economy) when they want less demand.
the fed wants to control inflation also, and does so by nudging demand.
That's it...that's what the Fed has to work with.
Right now the Fed wants to reduce demand in the real economy, because lower demand will lead to lower inflation.
The twists right now are:
-COVID. If production can't make enough stuff, prices will rise no matter what the Fed does.
-Labor shortage. If Americans get too rich to work, wages will rise, leading to inflation.
- fiscal stimulus. It appears congress gave too much money away and it is still sloshing around. Will take time for that to go away.
Interest rates manufactured by the Fed and not the market. Government spending monetized by Treasury and Fed operations. Sure totally normal, no consequences fir unhinged behavior. OK Millennial.
Are you only capable of communicating in total non-sequiturs?
Interest rates manufactured by the Fed and not the market. Government spending monetized by Treasury and Fed operations. Sure totally normal, no consequences fir unhinged behavior. OK Millennial.
Are you only capable of communicating in total non-sequiturs?
Nice. I just worry about how a strong dollar will make paying back USD loans very hard for EM countries.
SP500 now up around 7% from its Feb lows.
corrections tend to take around 3 months to work out, right? It's been about that since all this started.
That is the risk. Emerging economies more commodity oriented, should benefit in the coming cycle. All closed end funds are best bought at a good price. That is the only time I have done well. I think I bought at very good prices, and hope to add if the market worsens.
Nice. I just worry about how a strong dollar will make paying back USD loans very hard for EM countries.
SP500 now up around 7% from its Feb lows.
corrections tend to take around 3 months to work out, right? It's been about that since all this started.
That is the risk. Emerging economies more commodity oriented, should benefit in the coming cycle. All closed end funds are best bought at a good price. That is the only time I have done well. I think I bought at very good prices, and hope to add if the market worsens.
You know, buying closed end funds at discount is one of those quiet strategies that works over the long run. I rarely think of it because it's such a small corner of the market but it does seem to work. It exploits a market inefficiency.
That is the risk. Emerging economies more commodity oriented, should benefit in the coming cycle. All closed end funds are best bought at a good price. That is the only time I have done well. I think I bought at very good prices, and hope to add if the market worsens.
You know, buying closed end funds at discount is one of those quiet strategies that works over the long run. I rarely think of it because it's such a small corner of the market but it does seem to work. It exploits a market inefficiency.
and I should add that it works particularly well for individual investors. Big institutions can't do it because they'd wind up driving away the discount by all their buying, and be stuck with an illiquid position.
Sometimes it pays to be a small investor. Microcaps are another example, although hard to exploit because of large bid/ask spreads.
is the freakout over? 3 months is generally how long it takes. But we're dealing with putin here, who cannot be predicted. anything can lash the markets.
I have seen stats that suggest when the market behaves like it has this week...being higher in a year has happened every time.
Earnings Scorecard: For Q1 2022 (with 7 S&P 500 companies reporting actual results), 3 S&P 500 companies have reported a positive EPS surprise and 6 S&P 500 companies have reported a positive revenue surprise.
unusually strong market this week, which in the past has been very bullish. But very small sample size
Ryan Detrick, CMT @RyanDetrick History was made this week. For only the 5th time ever, the S&P 500 gained at least 1% for 4 consecutive days. This rare occurrence is also quite bullish, as a year later it has been up more than 20% every single time with an average gain of 28.0%.