Removing the Training Wheels

[jefftheshark]

The Fed raised the discount rate to 0.75 tonight after market close and the futures are down right now.

This combined with options expirations tomorrow could make for a very volatile trading session.

BLOOMBERG


Of course, everyone's fear is that they're tightening too soon and repeating the mistakes the Fed made in the mid-30's when they snuffed out the recovery and set us into a double-dip depression. I guess time will tell.

JTS

 

[conraddobler]

The Fed raised the discount rate to 0.75 tonight after market close and the futures are down right now.

This combined with options expirations tomorrow could make for a very volatile trading session.

BLOOMBERG


Of course, everyone's fear is that they're tightening too soon and repeating the mistakes the Fed made in the mid-30's when they snuffed out the recovery and set us into a double-dip depression. I guess time will tell.

JTS

A long time ago in a land far away I used to read through a lot of crap trying to figure out what caused the last depression, as if it was some mystery.

I used to read endlessly about what the FED did right or wrong as if it was actually trying to avoid one.

Events that happen over such a long time frame look different in the context of history than they do up close.

Those that write about them are by definition in them until much later and if you the look back without being too biased you can pretty much see the writing on the wall.

Jefferson warned everyone hundreds of years ago about this, he was a smart guy, people need to figure it out.

This stuff isn't an accident and no one with a brain would think our economy is strong enough right now to begin raising rates when there is no demand for credit.

All the debt metrics tell you all you need to know, into that abyss they'll use a few reports as cover to claim they were just worried about inflation but all the best and brightest guys I know don't worry about that yet.

They know what's up and what's comming.

 

[jefftheshark]

A long time ago in a land far away I used to read through a lot of crap trying to figure out what caused the last depression, as if it was some mystery.

I used to read endlessly about what the FED did right or wrong as if it was actually trying to avoid one.

Events that happen over such a long time frame look different in the context of history than they do up close.

Those that write about them are by definition in them until much later and if you the look back without being too biased you can pretty much see the writing on the wall.

Jefferson warned everyone hundreds of years ago about this, he was a smart guy, people need to figure it out.

This stuff isn't an accident and no one with a brain would think our economy is strong enough right now to begin raising rates when there is no demand for credit.

All the debt metrics tell you all you need to know, into that abyss they'll use a few reports as cover to claim they were just worried about inflation but all the best and brightest guys I know don't worry about that yet.

They know what's up and what's comming.

My take:

We almost had a failed auction the other day at the long end of the curve which might have scared the crap out of someone. It could be time then to knock the bejesus outta stocks & gold and create a rush to treasuries in order to roll over the massive amount of short term debt.

and/or:

The Chinese and the Fed have been playing chicken for a while now but the 2 speeding cars are getting uncomfortably close, and perhaps the Fed blinked. Result: The $ goes up, exporters like China are happy, the indirect bidders come back into the game and all is well with the world unless you want to actually work for a living.

and/or: One hour before the market closed, from out of nowhere, the market starts going up on low volume and then someone suddenly sells a 2M position of S&P futures literally seconds in front of the announcement. The Wall Street guys aren't even trying to make this look like it isn't just out and out inside trading anymore.

Oh well, it's probably nothing serious. I think I'll just go and paste some more tinfoil onto my hat.

JTS

 

[jefftheshark]

My take:

We almost had a failed auction the other day at the long end of the curve which might have scared the crap out of someone. It could be time then to knock the bejesus outta stocks & gold and create a rush to treasuries in order to roll over the massive amount of short term debt.

and/or:

The Chinese and the Fed have been playing chicken for a while now but the 2 speeding cars are getting uncomfortably close, and perhaps the Fed blinked. Result: The $ goes up, exporters like China are happy, the indirect bidders come back into the game and all is well with the world unless you want to actually work for a living.

and/or: One hour before the market closed, from out of nowhere, the market starts going up on low volume and then someone suddenly sells a 2M position of S&P futures literally seconds in front of the announcement. The Wall Street guys aren't even trying to make this look like it isn't just out and out inside trading anymore.

Oh well, it's probably nothing serious. I think I'll just go and paste some more tinfoil onto my hat.

JTS

And then again, perhaps nothing will happen.

(The S&P is down only 2 points as I type this)

JTS

 

[conraddobler]

And then again, perhaps nothing will happen.

(The S&P is down only 2 points as I type this)

JTS

I helps to picture Wall Street as Lucy and all of us as Charlie Brown and every trading day they have to figure out how to convince us they won't pull the football out and then they do.