The "ethos" that belies the global economy right now is the re-marketing of proven failure as success - to the benefit of an ever-more miniscule segment of society. Warren Buffett just announced that the Trump tax cut was responsible for almost half of his wealth gain in 2017. He forgot to mention that the 2008 bailout was responsible for the rest. But he agrees that printing money is the secret to effortless wealth...
What began as the rapacious liquidation of the economy to the benefit of the stock market, will only end up with the dumbfucked realization that neither was spared. The most common refrain in this era, among the geriatric-set is that "this will all end badly, but not in my time". If the Baby Boomers had a generational slogan, that would be it. Suffice to say there is ample opportunity for surprise.
Friday short-covering aside, here is what we learned this past week:
"This will be one of the more hawkish Feds we have experienced in 20 years"
"The Fed now faces pressure to move more quickly to guard against a possible overheating of the economy"
In 2008 the Fed was preoccupied with inflation...[Bueller?]
In his first months as a Fed governor back in 2012, Powell was among those who pressured then-chair Bernanke for more clarity on his plan to “taper” the central bank’s bond buying"
Liquidity is at record low levels, but unlike 2012, no casino bailout is on the table this time. Thanks to fake reflation aka. Trump tax cut, and the most hawkish Fed chief since Paul Volcker.
We've all heard of "90% down days" - 90% of total volume in declining stocks.
What is coming are 100% down days. But don't take my word for it:
"Higher interest rates could lure cash out of the stock market and into bonds as yields rise."