Where’s The Powell Put? $1.1 Trillion Answers
We all know the vaunted "Fed put" is struck far lower than it was before US inflation accelerated to the highest levels in a generation, prompting bipartisan concern and sending consumer sentiment to the lowest levels in a decade.
No longer does the Fed have cover to pursue a market-friendly policy bent in the name of warding off disinflation. Plausible deniability vis-à-vis what critics charge is the Committee's shadow stock mandate evaporated under the heat of CPI at high noon.
The undeniab
3700 sounds nasty but it was the base on Jan 1, 2021. Big fat hairy deal. We got from there to here in a year. That’s really not all that much actual pain. That level and 30s over 3.0 would suit me just fine.
Irrational exuberance is alive and well in 66% of investors.
Wonder how many responsible for the liquidity sloshing about in equities markets consciously accept they are just tools? Just tools wielded by the Master of their Universe. Tall order for an ego that feels compelled to have conviction about gambling with potentially ruinously sized leveraged bets. Of course, my implied moral accountability whine would be at least partially grounded in something resembling The Relevant if it wasn’t somebody else’s money the usual suspects are playing with. So yes, the Market sloshers are decidedly of the short-order mindset as befits the mental midgetry now codified in their algos. The more their algos drive them the more circular their thought processes become…. The money sloshing about is being treated like so much “found money.” Why? Cuz it is. Recipients rarely treat found money like wealth they spent the best years of their ridiculously short lives acquiring. On the bright side, with each slosh, a little more dribbles away. Eventually, the cup will be rightsized for the liquidity.
As the Boomers rapidly pass on found money in a generational transference the size of which the World has never seen before I’m wondering lately What Would Minsky Say?
Watching the money slosh from side to side on nothing more than half a dozen Russian tanks returning to their depots to be cannibalized for parts so that the rest of the tanks can be repaired after getting pounded on frozen ground brings home the fact how abysmally unprepared most of the algos and carbon based units glued to their algo interfaces actually are for the realities of the non-digital when it comes to blows. Totally reactive to events they don’t understand. Sure they ‘understand’ the mechanisms of their own engineered systems, at least enough to press the correct button with luck better than 50% of the time. But could they change or repair a broken tank tread in subzero weather? Or their car tire safely? Times like this, and I fleetingly find myself sympathizing with that psychopath-by-way-of-privilege MBS’s disparaging remarks about the traders of financial products for the physical assets he controls.
Small chance on the tracked vehicle tread repair sub zero temps aside it takes training, teamwork, and specialized equipment. I would put the odds of them successfully changing a tire at 65%, safely at 25%. Even those that cannot stomach killing and eating their meal in normal times eventually will not have a problem with it, once hungry enough. Nature can undo nurture at some point if time allows.