Forget about the Fed’s language and its FOMC meeting. The real story is the $100 trillion bond bubble (more like the $191 trillion interest rate bubble based on bonds). When it breaks, it doesn’t matter what the Fed says or does.
The bond bubble today is over $100 trillion. When you include the derivatives that trade based on bonds it’s more like $500 TRILLION. And it’s growing by trillions of dollars every month (the US issued $1 trillion in new debt in the last 8 weeks alone).
The story here is not Oil; it’s about a massive bubble in risk assets fueled by borrowed Dollars blowing up. The last time around it was a housing bubble. This time it’s an EVERYTHING bubble. And Oil is just the canary in the coalmine.
So… the prices of assets are fraudulent, the value of balance sheets is fraudulent, and earnings are fraudulent. This means that stock market caps, balance sheets, and income statements are all inaccurate representations of reality.
The entire “recovery” story was total BS and that the Fed has made things worse than before. As always, stocks are the last to “get it.” But we wouldn’t be surprised to see a crash in stocks in the coming months.
Today the Euro is on the cusp of breaking critical support. Draghi will likely see this as a success (he wants inflation). More likely, it will bring in another round of the EU Crisis (the same line was hit when Greece imploded in 2010 and when Spain imploded in 2012).
There is a saying that you don’t ring bells at the top. It’s not really true. Every time the market forms a major peak, at least in the last 15 years, there are usually a preponderance of signs of excessive speculation and leverage.