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What Does It Mean If The Fed Hikes... And If It Doesn't
Today's jobs report was supposed to be a tiebreaker for the Fed's September rate decision, giving fed funds and eurodollar traders some respite after a summer that has been a gut-wrenching, dramamine-chewing rollercoster. It did not, in fact it boosted uncertainty, with the probability of a September rate hike rising from 26% to 30%.
In other words, any hope for clarity was promptly dashed with a job report that once again was both bad and good, depending on one's bias.
Which means that the September 17th decision will come to the absolute wire, with little if any guidance available in the 13 days left until what may be the Fed's first rate hike in 9 years... or not.
Here is an oddly accurate explanation of what it means if the Fed does hike rates on September, and alternatively, what it means if Yellen punts once again, and leaves the decision to the October or December meeting, or just punts to 2016 and onward altogether. As a reminder, Goldman does not expect the Fed to hike on September 17.
On Wall Street only 2 things matter: interest rates and earnings. Everything else is noise unless it impacts rates and earnings. No-one impacts interest rates more than the Fed. So the Fed’s September 17th rate hike decision is a big deal.
Should the Fed decide to raise interest rates, it will be the first Fed hike since June 29th 2006. In the 110 months that have since past, global central banks have cut interest rates 697 times, central banks have bought $15 trillion of financial assets, zero [or negative] interest rates policies have been adopted in the US, Europe & Japan. And, following the Great Financial Crisis of 2008, both stocks and corporate bonds have soared to all-time highs thanks in great part to this extraordinary monetary regime.
As noted above, a rate hike with a stroke ends this era. So:
If they don’t hike…
- It’s an admission that Wall Street threatens to reverse the recovery on Main Street
- It will lead to a short-term relief rally on Wall Street
- It will be relatively positive for EM/commodities/resources, as it unwinds the higher US growth/rates/dollar narrative
- It will be positive for higher-yielding assets
- It will be positive for growth > value, as the Fed is confirming the deflationary recovery
- In short, if the Fed’s failure to hike does not lead investors to completely abandon hope on growth and scurry into gold, cash & volatility, then look for the “barbell of 1999” to reemerge: Über-growth & Über-value were massive outperformers after the Asia crisis (Chart 9).
If they do hike…
- Watch the long-end
- If the long-end concurs with the Fed’s view of economic recovery, then banks, cyclicals and value stocks will receive a bid. Asset allocation toward “strong dollar” & “Fed tightening plays” will harden, with the exception that value will likely outperform growth
- If the long-end rallies, signaling a policy mistake, then cash, volatility, gold & defensive growth will be the way to go.
Most importantly, if the long-end rallies, it's almost over and get ready to bail on any outperforming long-end position, as the reaction itself will signal the beginning of the end of the fiat regime.
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A hairy, pork-fat drippy, flappy beef curtain of a cunt.
How do you know she's not a shaver?
Janet's beaver probably smells like cinnamon.
smells like Shemitah!
you know they set her up for this, as racist as these banking kikes are, they are also misogynists of the highest order, making their women wear wigs, etc.
I don't doubt what you're saying, but that's a loooooog set up. They really played the game with this one and drug it out for as long as they could.
And yeah, I've long known that ZioNazis are the most disgusting people on the planet. They weren't identified as hypocrites & pharisees for nothing.
Still curious no one seems to be talking about the heads big banks win / tails big banks win interest rate hike scenario.
The reason the Fed (and big banks) want higher rates is all about IOER's...as increasing the interest on the $2.5 trillion in bank excess reserves now held @ the Fed is how the Fed plans to "de-incentivize" banks from lending, forcing up overnight rates, and this is supposed to raise rates accross the curve.
Big banks get billions for not lending (forever)...Fed doesn't even have to normalize it's balance sheet (ever) and can even keep on carrying out rollover and new QE if it likes. Every big bankers a winner!
WTF!!! This is the plan!!!
http://econimica.blogspot.com/2015/08/rate-hikes-and-qesimultaneously.html
" As a reminder, Goldman does not expect the Fed to hike on September 17."
So this post was just a review of the Goldman muppet setup spiel.
Nice blog.
Zion is a scheme, not an ethnicity.
So, there I am recently looking into the history of the so-called Jews. Are they Kharsarians, Pharisees, or a noble, but maligned people, etc.?
I begin to investigate, and quickly find that those we call Jews are really not Jews, but a corrupt mishmash of Arabs and Jews, Pharisees, formed during the last ancient exile in Babylon. Jesus* himself called these imposters out several times, and they had him killed, utilizing, as they do now, others to do so.
Later the Romans sent the Pharisees packing into exile again. Most of them went home to Babylon, while others flowed north and west into Europe. Germanic areas, "Germany" and "Poland" resisted, and were spared, but not the western areas of Europe, "France," "England," and "Spain." These western European Jews became the Sephardic Jews, Sephardic-Pharisees--Not the focus of today's lesson.
Now, in about the 9th and 10th Centuries, the Babylonians had had enough, and tossed the Pharisees out of Babylon. They, like their brethren before, also moved north and west into Europe. However, one group wandered over the Caucasuses, and settled in the Caucasus region of Europe.
This Caucasus group of Pharisees were then assimilated by another people already there, the Khazars. These Pharisee infused Khazars then later emigrated to northeastern Europe and became the Ashkenazim of northeastern Europe. From there they slowly infiltrated into "Germany" and "Poland."
Now, the reason for my parade down this lane of history: Having lived in Europe, and experienced Gypsies and their lifestyles firsthand, even having Gypsies friends, why was it that those we call Jews, the Pharisidic-Khazars, behave like higher-functioning Gypsies?
With a little digging I uncovered that between the 6th. and 7th. Centuries, Gypsies left, or were expelled, from India, and moved west. One group moved over the Caucasuses, and the rest moved into southeast Europe, "Romania," etc. The group that went over the Caucasuses became the Gypsy kingdom of the Khazars. These Khazars then later assimilated the Pharisees, and adopted the Pharisees' mysticism, and obscure source of supposed enlightenment, and faith, the Talmud.
And there you have it, many of those we call Jews, Ashkenazim, are really high-functioning Pharisidic-Khazarian Gypsies.
Zion is a scheme, not an ethnicity..
*Not an endorsement, or an inducement.
stop speaking yiddish. you are probably the only jew that posts here. you'll get the kkk boys pissed.
... What Does It Mean If The Fed Hikes... And If It Doesn't
Short answer: it doesn't mean shit, one way or another ! Some time ago people used to try guessing their future by looking into the form and shape of chicken entrails. They were smarter back then than our gurus are today; when all was said and done, at least they had a chicken to eat...
It seems hobbits are not universally cute and noble.
Miffed
Cuz 25bps will make a difference...
You can't raise rates in the middle of a gvt default, it simply can't be done.
But what if you and friends own, run, and control said government?
Zion is a scheme, not an ethnicity..
Can the Fed raise a smaller percentage or is it always in quarters?
They'll just put the tip in. "Just the tip. I promise."
Zion is a scheme, not an ethnicity..
They should 'decimalize' like the markets did. That way they can raise rates (and lower them back) 0.01% at a time...
Actually, a THIRD thing matters besides rates and earnings: whatever comes out of Gartman's mouth.
Such incredible dribble and drivel comes from Gartman that I must wear an SCBA to clean it up. And we thought Jabba the Hutt was disgusting?
COME ON HUMPTY DUMPTY, JUST FUCKING DO IT ALREADY!
Well, at least she is being honest with her gesticulation. We're fucked no matter what.
Miffed
now many kikes get to vote? I will exclude Kosher Lakota...
The barbell of 1999 will re-emerge? Really? Because completely unrelated circumstances must produce similar responses.
Cash is safe if you leave it in the system? Last time I checked you can transfer positions easier than cash in a failed institution.
Scurry into paper gold? Because that has worked out so well in the past...
There seems to be a common theme in all the research out of major firms recently. It goes along the lines of please have lots of cash liquidity or muppet positions we can trade against in your accounts so our OTC derivative exposure can fund itself off of it all.
The common theme you speak of, is that because things have always been or turned out a certain way, that they always will - especially as it pertains to the United States. 'America always comes through', so to speak. The real bitch-slap is the day in which that long standing meme fizzles away and very dark realization sears into the minds of the body politic.
"What Does It Mean If The Fed Hikes... And If It Doesn't"
If they hike, there is a scheme afoot to profit form the dollar's invertible demise, and then switch it out for a new SDR backed "slave-currency."
If they don't hike, the kickoff of their scheme is delayed for later in the Fall or early Winter.
Zion is a scheme, not an ethnicity..
DEATH TO THE KHAZARS!!!!
no hike from the kikes, you heard it here first... trade accordingly
Caption for Janet's photo: "It's right here in this forecast I just pulled out of my ass. Really, smell my finger if you don't believe me! BTW if you audit the Fed, we will stop telling you which stocks to load up on in order to frontrun us."
You had her bugged. Or buggery or something...
It is stuptifying they have world on hold for a 0.25% change.
A basic truth about committees, and I don't give a shit if it's a bake sale committee or the FOMC: They are quick to agree on what should NOT be done, often arriving at what WILL be done by eliminating all other options. They already jumped the shark, everybody knows it, and the FOMC knows everybody knows it.
"Harumph! Harumph! Harumph!"
"Say, I didn't get a harumph outta that guy!"
Yeah, the same way liberals choose political candidates.
And Markets crash 20% on that 0,25% rate.
Funny thing is, it doesn't affect nobody!!
Any company that loans money... they never got it for free...
If you loan money... you don't get it for free.
Only the 0,01% are affected A TINY BIT!!
So that got my thinking this is yet again a trick to get the mules out of the market so the bigger guys buy in cheap and when they inflate the currency just a bit more, they can profit 50% yet again.
Sitting in a large mining long call position bring on the drama.
here's how it plays out: 1/4 pt. dow goes down 1000 over a week. all in on qe4. rally into x-mas. "Janet saved the planet!"
If bernanke dropped dead? I'd drink a shot of Jager and dance an irish jig. And, I dont drink.
It means nothing as long as the yield is below what China wants to buy at.
China knows US inflation is above 8%.
The Fed hikes...
Economy tanks.
The Fed doesn't hike...
Economy tanks,
Anyone feeling optimistic?
The experiment has failed.
Time to learn from the experiment.
I doubt that will happen.
I have a domtholotite back on Q99X2 that wants to know if Janet Yellen is married? Domtholotites are parasitic demons that live in the empty soul space of divorced cadivers that for some reason are still living.
There are millions out there who are ready to pay more than 0.25% for credit.
So, why some jokers are allowed to keep the interest rate at such ridiculous rate? I mean Central Bankers?
Of course, because these jokers have given out all the credit all around the world at 2% - 18%, and yet are unable to pay anything higher then 0.25% to the original credit.
How pathetic. No wonder, Russia, China and India are running out of this BS scheme with their own Banking.