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How The Supreme Court Could Trigger A Financial Meltdown
I hope -- really I do -- that markets aren't forced to grapple this year with a direct attack from t
At least we would have advance warning of a killer asteroid . . . or maybe not given NASA cuts, but the point is, Trump could (purport to) fire Powell and (bigly, hugely, calamitously) tank stocks and bonds at any time, with no notice . . . beyond what we’ve already received.
Another excellent reason for capital to leave the US.
As a thought exercise, what would the term premium move to in the Trump sacks Powell scenario? By extension, how would that new rate revalue stocks (mechanically – since we cannot know the WTF human factor in advance)?
Lost in all this, is Trump’s actions would actually be another self-inflicted bullet hole if the objective is getting the overall debt/GDP to a more sustainable ratio (interest rates on debt up/GDP down). This guy is running out of toes to shoot.
Hypothetically, do treasury yields count as a “risk-free” rate when the Fed is under significant political interference?
Seems to me that the best strategy right now is playing currency hedges while waiting for both the USD and global markets to melt down. What to invest in from the rubble of the worst downtown ever? Depends on whether or not Trump has been removed, forcibly or otherwise.
I would think that replacing the current Fed mandate with a new mandate to juice the stock market would be good for the stock market (but bad for inflation, employment, people in general). I do not argue with the legal and ethical points made here, but rather the outcome of the scenario where Powell is replaced by a political puppet that would only use the gas pedal.
Stocks would plunge.
I can only conclude Trump friends, families and cronies have long $VIX positions