Category Archives: Fed-Reserve

Putting The Fallacy Of QE Into Perspective

By -

You can’t turn on a financial news program without being bombarded by panelists as well as the hosts ready-at-the-draw to pounce on anyone with an opposing view as to the “effectiveness” of the Federal Reserve’s quantitative easing program (QE).

Once again this played out just the other day on CNBC™ where this time it was Peter Schiff who found himself in the cross hairs of today’s version of “ambush the guest.”

You can agree or disagree with anyone’s viewpoint and I even encourage people to question mine if they see fit. However, you don’t have to be a rocket scientist to watch many of these anchors to witness for yourself what now has turned into all the appearances of – an ambush. (more…)

FOMC Cites Job Gains?

By -

Fed Announces End to Bond-Buying, Citing Job Gains –New York Times

Just a week or so ago one of the Fed’s three most celebrated hawks jumped the mic with a ‘shucks ya know, we could always delay the end of QE’ routine as the stock market plummeted. They don’t make hawks like they used to.

So what does the FOMC really mean, ‘job gains are good so we are ending QE’ or… ‘phew, that was a close one but the market took the Bullard bait and is back near the highs so we are ending QE… for now’. I’ll take ‘B’ Alex.

I seriously wonder how people other than promoters in the media and the financial services complex can continue to fall in line behind this transparent stuff. Maybe it is not really people after all but instead a bunch of connected black boxes, dark pools and other such robo systems simply programmed, without feeling, to follow the code. (more…)

Now or Never?

By -

Well, it’s here. Oatmeal Cookie Baking Troll Day is here at last. I’ve got a knot in my stomach that no sailor could ever figure out. To think that our livelihoods are dependent upon this horrid little woman is sickening and sad. But here we are.

I’m watching the Russell 2000 in particular. As we look at its chart, as well as the chart of the small cap leveraged ETF, it seems we are at an important juncture. Of course, Shrew-Monster could kill it, just like she could kill any other chart, but these are the lines that, at present, matter most. (more…)

All in One Chart

By -

Greetings from fabled Treasure Island in the middle of San Francisco Bay, where I am (of course) at a fencing tournament. That’s following a morning spent in Monterey (way, way south of here) for a gymnastics tournament. If you had told me ten years ago that my life would be dominated by sports events, I would never have believed you. But here I am.

Anyway, in the midst of this, our own beloved BDI, the crown prince of StealthFlation, sent me this fascinating chart. In a nutshell, it really shows that the answer to “What drives the stock market?” isn’t household income, like in quaint old days prior to 2009, but simply how much paper the Fed chokes down. It’s all revolting, but it’s also reality. For now.

OneChart

Mold Action

By -

Whenever we get a decent selloff in the market, I brace myself for the next intervention – – because we all know that’s what’s coming. Although it doesn’t constitute any kind of announcement, word from the meeting of the Powers That Be over the weekend was:

1012-boldaction

So, let’s get this straight:

+ Q.E. isn’t even done yet; its cessation is still forthcoming this month;

+ The market was at the highest point in human history only a few weeks ago, and it has dropped a single-digit percentage point since then;

+ The world’s central banks have already printed up $12 trillion in funny money to artificially prop up equity markets for their rich buddies

And so they’re calling for………..bold action??? You’ll excuse me if I feel like retching.

I’ve said it before, and I’ll say it again – this time with the power of a boldface font – there will come a day that a big announcement is made, and the markets will actually wilt instead of rally. It is at that point you know it’s game-over for these clowns, and asset classes from A to Z are collectively headed for the toilet.