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‘Crazy, Raging’ Rates Moves Set To Spook Risk Assets Again
Things were going along ok (markets mixed) until just before 6 AM in New York, when US equity futures swooned, European stocks dipped and the bond rally gathered more steam with 10-year yields touching 2.35.
There are other signs of risk-off, as the franc trades the strongest against the euro since July 2017. Oh, and Germany sold bunds with a negative yield for the first time since 2016, so that's fun.
Generally speaking, market participants remain wary amid the ferocious bond rally that looks
Well I heard that stocks are soft because there are just so many IPOs and so much gosh darn competition, and this oversupply of shares is dampening prices.
I mean, you would think stock buybacks would reduce available shares, and you would think we have fewer public companies now than in years past, and you would think that the last thing an oligopolistic market needed was more consolidation despite the poor, confused traders, but I don’t have a CNBC TV show.
The market is telling you that the economy will slow down further. The market is not always correct, but I would not want to bet against it- 2/3 times or more it is correct. The reaction function of the Fed will be to lower rates, and counter intuitively Stephen Moore will be correct. You know the saying about the blind squirrel….
The inventory of Bullish releases on the (Fed) shelf is getting real low.. We are down to about 2-3 Bullish ones left and a lot of BS in the rest of them. I am glad to read Charlie has an explanation for some of this as I agreed with his synopsis yesterday from an intuitive standpoint. Were it not for his prior assessment(yesterday) today’ s early equity action would more closely resemble two dogs moving a herd of sheep.lol..Any comments anyone???
As unqualified as Moore may be, it’s hard to believe that sophisticated traders think Moore will be calling the shots at the Fed. He will be one of 6 or 7 governors, and the least respected at the table. He will not likely even understand what the others are talking about, except for things like “could you please pass the coffee.”
As an outsider, Moore knows that his only job is to support whatever Trump says. He has already learned this can backfire when Trump quickly changes positions, as when he said that that the last rate increase was good grounds for firing Powell for cause, and then Trump said he couldn’t fire Powell. The big challenge Moore will face as an insider is the same that the other sycophants face. As an outsider, Trump loves you because you blindly support him. Once you are an insider, there will likely come a time when something, somewhere will go wrong. When something goes wrong, Trump has a choice of taking responsibility himself, or blaming others. I think I noticed a pattern about that choice.
As a result, the once loved outsiders get chewed up and spit out. It’s only a matter of time.