Oh, you mean those countries that were destroyed by corrupt cult-like leaders making exaggerated promises, including outright theft of national assets, rigged elections and a hugely uniformed and gullible electorate. Let's hope that doesn't happen here. #VOTE2020
Is this an effort to try to deflect attention away from the previous post, and the fact that the Fed's 50 bps cut was absolutely useless?
And actually, the 50 bps cut was probably worse than useless because it wasted some of its little-remaining recession fighting leverage on nothing, and strengthened the perception that it's a relatively incompetent organization.
Rick, I absolutely agree with every word of your brief post and as a father of 3 who live in Seattle I got to tell you I feel like this post minimizes the threat and fear of corona virus and frankly I find it offensive.
The Fed's job is to adjust rates in equilibrium with economic demand. They follow the bond market which gives these signals. The market leads the Fed, historically, not lags. When the Fed keeps rates in equilibrium with supply & demand, things go smoothly.
The bond market is screaming. Yet, the Fed is still postured for tightening, based on the yield curve. 10 year yield has a .SEVEN handle this am. Looks like its going even lower.
Why do you think its a good idea for the Fed to TIGHTEN during this panic? I think they should have immediately lowered 100bp. They will, anyway. Why make markets wait?
Prayers for everyone who gets this new strain of corona flu for a speedy recovery. Especially for those who already have lung disease, or are terminally ill. That is the group who doesnt do well. Especially prayers for Seattle.
The good news is that almost everyone who gets it has a speedy recovery with mild symptoms. The main focus should be to keep it out of the nursing homes. Kids have been very resistant to it.
"Active cases" in China are plummeting. Over 55,000 of the 100,000 worldwide cases have already recovered completely. "Recovered cases" have been outpacing new cases every day since Feb 17. That wont last as it spreads, but recovery stats are very good news.
Just returned from SEA where we spent the last two weeks ensconced in my daughter and son-in-law's house after their first baby was born over two weeks early. Good that she came early! Her due date was 3/8.
People there aren't panicking but it won't take much and it may very well happen. Undiagnosed cases may well be in the hundreds if not over a thousand.
PERCEPTION IS REALITY.
Doesn't matter that corona virus may be more like a kicked up flu. If people are scared you have to respect their fears. The media just loves this and that pisses me off. I've been trading the bond markets for over 20 years and this is crazytown. Odds of a recession THIS year cannot be discounted and you know what that could mean...
SPLV-TLT combo is up 3% today while stock market down 2%. Combo is up 9.5% YTD as I type this. Market down 8%+
Look at the gap up in TLT today. Amazing. Total fear. Same gap in 10 year yields. Lordy. Bonds gone wild.
Even Cramer wondered aloud this morning if the bond market is being manipulated. Doesn’t seem real. I added even more to TLT yesterday as a hedge that I hoped wouldn’t work. It’s so stretched.
Stock Market still holding above last Friday’s lows/buy point, remarkably. We shall see how that plays out end of day.
Agreed.
ReplyDeleteOh, you mean those countries that were destroyed by corrupt cult-like leaders making exaggerated promises, including outright theft of national assets, rigged elections and a hugely uniformed and gullible electorate. Let's hope that doesn't happen here. #VOTE2020
ReplyDeleteWho cares about communism? We are our own worst enemy.
ReplyDeleteWhen the Soviet Union imploded, it was in better fiscal shape than we are now. It restrained itself so badly, it couldn't keep up with us.
But instead of then reining in our stimulus, we were addicted. We couldn't suffer a downturn - that was no longer acceptable to us.
We now can only stimulate ourselves with monetary policy. We need crutches, i.e. fiscal plans from our government, not the Fed's drugs.
Soviet-style massive infrastructure projects would be one of the better plans to deal with where we're at right now.
But my guess is that we'll just go to war with China in a couple years.
LIKE. Thumbs up symbol
ReplyDeleteI don't understand: Why is the symbol of the USDA, the VA, HUD and Labor Department being demonized?
ReplyDeleteIs this an effort to try to deflect attention away from the previous post, and the fact that the Fed's 50 bps cut was absolutely useless?
ReplyDeleteAnd actually, the 50 bps cut was probably worse than useless because it wasted some of its little-remaining recession fighting leverage on nothing, and strengthened the perception that it's a relatively incompetent organization.
Rick, I absolutely agree with every word of your brief post and as a father of 3 who live in Seattle I got to tell you I feel like this post minimizes the threat and fear of corona virus and frankly I find it offensive.
ReplyDeleteI am also certain that was not Scott's intention.
The Fed's job is to adjust rates in equilibrium with economic demand. They follow the bond market which gives these signals.
ReplyDeleteThe market leads the Fed, historically, not lags. When the Fed keeps rates in equilibrium with supply & demand, things go smoothly.
The bond market is screaming. Yet, the Fed is still postured for tightening, based on the yield curve.
10 year yield has a .SEVEN handle this am. Looks like its going even lower.
Why do you think its a good idea for the Fed to TIGHTEN during this panic?
I think they should have immediately lowered 100bp. They will, anyway. Why make markets wait?
Prayers for everyone who gets this new strain of corona flu for a speedy recovery.
Especially for those who already have lung disease, or are terminally ill. That is the group who doesnt do well.
Especially prayers for Seattle.
The good news is that almost everyone who gets it has a speedy recovery with mild symptoms.
The main focus should be to keep it out of the nursing homes. Kids have been very resistant to it.
"Active cases" in China are plummeting. Over 55,000 of the 100,000 worldwide cases have already recovered completely.
"Recovered cases" have been outpacing new cases every day since Feb 17. That wont last as it spreads, but recovery stats are very good news.
"Especially prayers for Seattle."
ReplyDeleteThank you Johnie, I appreciate that.
Just returned from SEA where we spent the last two weeks ensconced in my daughter and son-in-law's house after their first baby was born over two weeks early. Good that she came early! Her due date was 3/8.
People there aren't panicking but it won't take much and it may very well happen. Undiagnosed cases may well be in the hundreds if not over a thousand.
PERCEPTION IS REALITY.
Doesn't matter that corona virus may be more like a kicked up flu. If people are scared you have to respect their fears. The media just loves this and that pisses me off.
I've been trading the bond markets for over 20 years and this is crazytown. Odds of a recession THIS year cannot be discounted and you know what that could mean...
SPLV-TLT combo is up 3% today while stock market down 2%.
ReplyDeleteCombo is up 9.5% YTD as I type this. Market down 8%+
Look at the gap up in TLT today. Amazing. Total fear.
Same gap in 10 year yields. Lordy.
Bonds gone wild.
Even Cramer wondered aloud this morning if the bond market is being manipulated. Doesn’t seem real.
I added even more to TLT yesterday as a hedge that I hoped wouldn’t work. It’s so stretched.
Stock Market still holding above last Friday’s lows/buy point, remarkably.
We shall see how that plays out end of day.