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Damned If They Do, Damned If They Don’t: Fed May Be Boxed In On Balance Sheet

A lot to ponder.

A lot to ponder.
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7 comments on “Damned If They Do, Damned If They Don’t: Fed May Be Boxed In On Balance Sheet

  1. brian oshea

    The last 30 years of malfeasance by both political parties and overspending is to blame for the current mess. If the economy is so good and everything is so great and stocks are undervalued LOL why would a small increase in rates even matter? You have to give Trump credit for trying to stop the insanity by cancelling the automatic increase of federal workers pay. They as a group are grossly overpaid some are overpaid by more than 50%. Don’t believe me do a simple search about private sector vs federal worker compensation and you’ll see for yourself, but I doubt that will change many minds on here. If not now than when should the Fed raise rates? They should have never cut them to zero in the first place. All this did was hurt savers and encourage reckless speculation…. I hope the market does test the highs again, it would be another opportunity to sell and short again!!

    • “You have to give Trump credit for trying to stop the insanity by cancelling the automatic increase of federal workers pay.”

      I see. So it’s fine that he cut taxes for millionaires and billionaires and that those tax cuts filtered directly through to equities in the form of buybacks which then inflated the very same bubble you are complaining about to the benefit of capital and the detriment of labor (as always) whose wage increases are barely keeping up with inflation?

      also, is it generally fine with you that Trump’s tax cuts benefited him and his family to the estimated tune of $1.1 billion and that the only reason we don’t know the exact number is because he won’t release his tax returns?

      and when you say “they never should have cut them to zero in the first place”, do you have any idea what would have happened by January of 2009 had they not stepped in? you’ll say “yes”, but do you really? have you talked to anyone on Wall Street that was on the frontlines for this? if so, then good for you, but if not, you might want to consider whether you would have been happy standing in a soup line, because that’s where it was headed.

      • and on Trump, what are you talking about? he holds the all-time record for most interest paid in a year on U.S. debt. he has ballooned the deficit and gone out of his way to make the US fiscal insanity the worst it’s ever been.

        and now, he is literally on Twitter demanding that the Fed cut rates so that the stock market goes higher and the debt service payments on all the debt he issued to fund his tax cuts don’t keep going up.

        so no. no, i don’t give Trump “credit” for anything.

        of course we’re talking about the self-declared “king of debt” here, who bankrupted six businesses, so what do you expect?

        • Thank you H. You nailed it good and proper on all counts. Every time we see behind the curtain in Oz, DC, we see that mean little man with tiny hands trying to con us once again. Keep holding the curtain open.

          • OZ never did give nothing to the tin man that he didn’t already have.

  2. The system (Fed/Banks) has a list of sometimes random announcements when timed and released correctly will tend to rally markets as well as a list of negative disclosures that tend to do the opposite. Along with this are multiple mouthpieces to provide ‘cover’ against charges of conspiratorial type behavior which is a prime negative. Along with this toolbox is the chart of the S&P with it’s critical support and resistance areas.. With a little ingenuity manipulating a market become easier with practice… The fact that this economy after years of monetary and fiscal abuse can no longer tolerate interest rates about three percent is a mathematicians dream project (easy). This view might repulse someone whom is looking for a complex explanation of current markets but then again an awful lot of experts/and others have been ‘whipsawed’ short term as well as long term lately. There will be a reversion to norms only after the sacrifices that are currently unacceptable to the system are finally consummated but likely only as a last resort. We will all have fun in the meantime, I trust, while waiting for boring markets to return.

  3. Really lot of stuff and considerations. You approached the crux of the matter from every corner.

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