The Scylla And Charybdis of Dumb And Dumber

Contrary to popular belief, there are tangible drawbacks to having arrogant mega dunces running the economy. Markets are at the cusp of "discovering" those limitations. What is truly ironic is that Trump didn't trust a woman, Janet Yellen, to run the Fed, so he personally installed the far more hawkish Jerome Powell as Fed chief. Had he left Yellen in charge, she would have already yielded to concerns over global markets, as she did in 2015. Trump criticized Janet Yellen for NOT raising rates under Obama, and now he criticizes Powell for raising rates under his presidency. A sexist, a dunce, and a hypocrite all rolled into one human Twinkie, with the brainpower of a dead gerbil...

As we know, only Trump has the magical ability to "fix" big, fat, ugly bubbles by making them far bigger. While raising bond yields at the same time.

But here is where the buffoonery landmine comes into play:

Because while gamblers, pundits, and the White House have been incessantly imploring the Fed not to raise rates on Wednesday, it apparently never once occurs to them that it's not the short end of the curve that's imploding the casino on a daily basis.

"Who hired this Powell guy anyway?"

U.S. debt markets have already priced in a December rate hike. So if the Fed doesn't raise rates now, it will confirm that the "Greatest 'Conomy ever", is the greatest con job ever:

"Investors will assume that something is wrong with the U.S. economy if the central bank doesn't put through its widely expected December hike"

Here is a decision tree showing the likely first (and second order) effects from this Fed decision. Based upon this interpretation the Fed is duly boxed in:

Banks are confirming that the Fed has already over-tightened on the short end and the long end. This time there has been no rally into the rate decision:

Same thing for global markets - a total loss of confidence heading into the rate decision

The longer-term view on banks - now unwinding Trumptopia:

Regardless of what they do with short-term rates, the Fed blinking on its balance sheet rolloff isn't even a topic for discussion right now. Once again, blind arrogance playing the key role. Zerohedge is already talking about "QE4". Perhaps so, however, that that won't be on the table until the current set of gamblers are fully margined out. 

Which is also coming sooner rather than later.