Raising rates is one way to fight inflation. Another is to reduce spending. In severe inflationary circumstances doing both would be prudent.
The rates are being hiked but the other is still going on.
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- Thread starter Warstud
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Raising rates is one way to fight inflation. Another is to reduce spending. In severe inflationary circumstances doing both would be prudent.
The rates are being hiked but the other is still going on.
That is the traditional wisdom but I think this is a unique time. The current hikes have done little and my fear is the hikes needed to actually accomplish inflation reduction will be devastating. Again, I think we will be lucky if we only experience a "standard recession" and not a depression/deflation.
I agree and on the recession point I believe we have been in one technically since the beginning of the year.
One other problem that comes with jacking rates is that the interest payment on the debt grows as well. I have heard that we are now paying ¾ of a trillion dollars a year on interest on the debt.
The Fed tends to be behind the
during these situations and this time they definitely are.
A third is shrinking the fed balance sheet - which they are doing but you don't hear about it because there not actively selling, but when isuuance's expire they don't roll them over. So the fed is removing about $95B per month from their balance sheet, effectively removing that cash from the economy. The big issue on this is its never really happened before - so no one really knows its likely affect.
Another is supply side improvement - if goods can be produced more quickly - for example auto's - then prices will decline.
I think they will go with 75 BP. A pause could come soon but it all depends on the numbers the Fed looks at. Gasoline took a big spike upwards these past several weeks. That will affect the October report. The reaction to release more oil from the SOR was the response.
I am wondering how the retail sector will report their holiday sales. My guess is
The Wall Street Journal came out and said the Fed could possibly go with less than .75 basis points and the market liked that assumption
Manipulation at its finest and SEC can’t do anything.
GDP now forcast is showing GDP up 3%. Current wall street estimates show up 1%.
So assuming GDP comes in positive on thursday, or possibly way positive. Is that good for stocks (economy growing) or bad for stocks, because it likely means 75BPS hike?
You Buying or selling into thursday?
So assuming GDP comes in positive on thursday, or possibly way positive. Is that good for stocks (economy growing) or bad for stocks, because it likely means 75BPS hike?
You Buying or selling into thursday?
GON
$150 Site Donor 2025
Is there not a major event happening two Tuesday's from now? A upward stock market makes a happy constituen that are likely participants in this major Tuesday event.
No way I would be short going into a major Tuesday event so colse by.
No way I would be short going into a major Tuesday event so colse by.
GON
$150 Site Donor 2025
You are a braver man than me. I don't participate at all in the stock market.Thats two weeks away - lots of time to go long, then short, then long
I came to the conclusion years ago that the market was not a level playing field, I was not nearly smart enough to compete with the shenanigans of governmental and non-governmental institutions. One example, does the FED buy index call options? Who knows, but I heard the have. And if so, does the FED let a handful of players like Goldman in on the purchase, maybe even have a Goldman facilitate the transaction? If so, then Goldman buys CALLS with the FED. Huge way to shift the market.
No idea if the above scenario is true, it may very well not be. But I have been told about it, and I chose not to be anywhere a possibility like that.
GON
$150 Site Donor 2025
Jeff,
What would the S&P be today if the FED chose not to print money without in turn selling a treasury against the printed money, and if the FED was not buying mortgages and the like. What would/ should interest rates have been in the US since 2000 if the rates were determined by a free market? Why does the FED have a monster of a balance sheet?
I speculate the market would be extremely different. Seniors, pension funds, etc have had no choice but to put their monies into equities, as savings rates have been manipulated to be next to zero. So, you have billions/ trillions of USD in the stock market that should not be in the market.
I have no idea what the market is really worth on a "free market" trade. But I select not to be part of it, even if returns have been great. I can live with missing out on what very well be a Ponzi scheme type system.
My most wise observation (and I have very few), is that the vast majority of massive whales in the stock market all have one thing in common. Almost all of the Wall Street massive whales have an estate in the same country- New Zealand. New Zealand is the world's only Western Country that does not border another country and has enough indigenous resources to self-sustain a quality of life for its population and is remote enough to have a significantly reduced risk of pilfering from its neighbors. The whales are preparing for something- maybe it will come, maybe not, but they have a safe place......... and why do they?
Owen Lucas
$100 Site Donor 2023
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I have 3 theories on this:
1. They are falling for the hype of the world imploding in on it self and the oceans boiling away due to global warming, and want to find backup shelter. I mean global worming is real but I don't think it will manifest it self so quickly that you need something right now.
2. Owning a bunker in NZ is the popular meme in the elite community.
3. They really do know something is coming, and that's the scary scenario.
