Wednesday, July 31, 2019

My take on the Fed and on the moment's selloff...

I'm listening to Fed Chair Powell field what I have to say are all the right questions, which, in a nutshell, are, 
"if you're data dependent, and, on balance, the data has actually been decent since your last meeting, why are you cutting interest rates now and stopping the runoff of your balance sheet a month early?"

Powell, and I don't envy him mind you, keeps repeating that global trade uncertainty and lack of inflation demands that they engage right here.

My take: While, absolutely, as you've gathered, I can sympathize with the concerns over trade, the honest answer from the Fed Chair would be; 
"...the signal from the stock market is that if we don't cut rates now it'll tank, and even though the problem can absolutely not be solved by us (money is plenty easy to get), we'll catch the blame."
So, alas, the Fed ends up being complicit, or guilty of aiding and abetting, if you will, as a buoyant stock market keeps the powers that be emboldened to continue their ill-conceived quest to utterly disrupt the established global commercial complex.

As I type, the Dow's off nearly four hundred points, and, frankly (per my previous paragraph), that's a good thing! So maybe -- at least for the moment (and don't hold your breath just yet!) -- the Fed's in an utterly no-win situation*, if indeed they're worried about catching the blame for what I view as a timely/necessary correction in stock prices. 

*Or, conversely, they become the dark knight who (by killing protectionism) saves the day while playing the villain (à la Paul Volker, who -- by raising interest rates through the roof -- killed double-digit inflation while bringing on the early-80s recession)!

With regard to the 400-pt decline (again, don't hold your breath), tell me you're not surprised, I mean you've been watching my videos, right?

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