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Sins Of Omission
The Nasdaq careened towards correction territory Thursday, as Jerome Powell failed to assuage a market that desperately wanted clarity following last week's bond rout.
That Powell didn't manage to hit the right notes was both predictable and surprising at the same time.
He isn't a great communicator, or at least not vis-à-vis markets. And yet, it was abundantly clear what markets wanted to hear. To the extent Powell's webinar with the Wall Street Journal represented a rhetorical challenge, it
Dollar dead cat bounce now becoming a leap, along with a FED at ease with letting air out of bubbles. As stated earlier today, inflation probably a temporary concern and not realistic but having an effect.
Not knives I want to catch just yet.
Yeah, the knives!
One of these times, and I hope it’s after I’m dead, the markets won’t recover, and they’ll just keep going down…kind of like the months, and years, following the 1929 event.
All said, we had the liquidity event already (last March). So, whatever happens next, it won’t be another one of these.
Speaking of diversification desperation, where does this leave VaR?
Yes!! Great question, we need an update about Mr. McElligott line of thinking given the moves the last two or three days and what’s next.
No ‘dis on H as he (she?) provides much abundance on these topics…nonetheless.
I rather admire Powell and his occasional attempts at straight talk..How his comments are interpreted becomes an issue of ideology and what we desire to happen .The Fed is an appointed position but should not be so highly political to as to be required to feed the baby crying in the back room .That task is left to the realm of Politicians . The Horizon is clearer now than it has been for a while so selling gold and buying Banks and oil and commodity stocks was a good idea about last week… Geopolitics and generally logical Economic consequences may yet prevail temporarily.
Indeed, first the markets pulled forward good economic news and now bond investors have brought inflation expectations forward.
What’s left??
When do we start to pull forward the impact of the inevitable economic slowdown once the travel/leisure sugar rush runs its course? That is the last bit of unsatiated pent up demand.
There is little unsatiated retail demand left and housing-related spending is bound to slow as higher rates price out many buyers and Covid-panic buying subsides.
As George hints at, maybe it’s time to say “thank you” and reduce your financials and miners. (The comments out of China last night might be another warning signal when it comes to commods?)
It brings to mind something worth remembering — MOST longer-term investors cannot sell bonds and stocks and sit in cash. That has turned out to be a career-ending move over the past 50 years.
“MOST longer-term investors cannot sell bonds and stocks and sit in cash. That has turned out to be a career-ending move over the past 50 years….”
Just to be clear, you’re talking about people who run other people’s money for a living, right? Seems to me that cash is the only option for older retail investors at this juncture — those nearing retirement age and focused on capital preservation. (Lot of boomers who fall into that category.)
Yes mfn. In the context of those who quickly move large sums of money, large enough to impact the markets.
I’m probably in your age group so get what you are speaking of.