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Steen Jakobsen: Why The Fed Must Raise Rates Before It's Too Late
Saxo Bank's Chief Economist, Steen Jakobsen, says that the recent sell-off in the market has scared investors away, warning that volatility remains high as people await the Federal Reserve's decision on what to do about a rate rise. His base case is that there will be a hike next week, adding that if it doesn't happen this month, it could become too late to act.
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"Too late" happened a LONG time ago.
Slightly OT, but this is beyond hilarious!
According to the Independent, GCHQ, the British spying agency, found to have been conducting wholesale surveillance on UK citizens, has recommended that the public make their passwords less complex.
The next logical step, it seems, is to outlaw passwords and encryption, ain’t it? ;-)
Looney
http://www.independent.co.uk/life-style/gadgets-and-tech/news/stop-using...
WHAT I SAID STEEN!
Demographics Driving Declining Global Oil Consumption, Central Bank Mismanagement (Interest Rate Cuts), & Resultant Mounting Debt
New article makes it plain that demographic peaks and declines of the core populations (15-64yr/olds, nation by nation) are driving declining oil consumption, central bank interest rate cuts, and resultant debt loads. Simply follow the changes to the core populations and everything else makes sense...declining economic activity is offset by interest rate cuts to get a shrinking number of people to take on ever greater debt (leverage) to maintain consumption. But seemingly, this was under the false assumption this was a temporary lull...instead of the secular change it truly is. The article clearly demonstrates the utter foolishness (at best) from central banks that is making what was always an inevitable difficult change as population growth slowed...into a catastrophe.
http://econimica.blogspot.com/2015/09/demographics-driving-declining-global.html
" . . . declining oil consumption . . ."
???
World oil consumption is rising.
https://www.iea.org/oilmarketreport/omrpublic/
http://www.yardeni.com/pub/globdemsup.pdf
http://oilprice.com/Energy/Oil-Prices/Oil-Prices-Must-Rebound-Heres-Why....
As nation after nation hits peak core populations (15-64yrs/old) and begin receding and ultimately turning to declining core populations...these same nations hit peak oil consumption and begin large oil consumption declines desptie their total populations still increasing (almost, if not entirely, in the 65+yr/old segment)...I think the evidence makes it clear the pattern is now playing out nicely in China and soon India...peak global oil consumption is likely imminent.
It's not just demographics. Natural gas is replacing oil generally. Hybrids and electric cars are moving oil out of the transportation space.
3rd world nations are increasing their consumption of oil? That's their problem.
"As nation after nation hits peak core populations (15-64yrs/old) . . ."
You'll be waiting a long time.
https://www.census.gov/population/international/data/idb/images/worldpop...
Let me say it again.
It ain't gonna' happen.
Why?
Because they cannot.
Why?
Once they let that cat, (rising interest rates), out of the bag, it will run-a-way.
It ain't gonna' happen.
Period.
People have foregotten everything that happened in 2008.
Real estate will go up 200% in the next 10 years... so they think.
Banks... what's wrong with the banks?
Trade... It's all going so well... but only because margins are still insanely high. And the first thing that marks a crisis, is a drop in margins.
That drop hasn't happened yet so this crisis now is a dud for now.
What a bunch of senseless drivel.
Raising rates off of zero to next to nothing, in order to be "one and done", so this Saxo Bank lieutenant can go back to business shorting the dollar and raping emerging markets with Saxo bank debt.
How about talking about end game interest rates, which means nothing signifigant, debt, stuctural failure, global depression and and...real Money, like gold with no third party risk, which anyone with half a brain would want to be in 100 percent in this insane environment. Insane, that a good word for .25 one and done.
You've got to hand it to these minions, they live in an alter reality they love to invite visitors like you and me to. Bring your own straight jacket.
Come on in.
He's simply diminishing the impact a Fed rate hike will have to sucker in moar Muppets saying there will be greater volatility Q3 that will lead to buying opportunities of EM in Q4.
He's right about the Fed rate hike but he's full of shit otherwise.
Agree. If the retail IRA/401K/Pension/Retirement crowd don't believe - this guy makes no money.
Pretty soon they'll get rid of cash and tangibles, and every man/woman/child will be trapped in their casino.
I'd say we are coming full circle around to another Dark Ages but this time there are nuclear bombs all over the World.
Agreed interest neededstart going up 20 years ago. Way too late.
US guv writes the coupon rates. The Fed buys bonds at auction and through transaction from entities such as the Chinese.
The Fed has fuck all to do with setting rates, but it can influence them when a boiler room deal is struck with the Treasury Dept.
Rates go up? USD rockets? Global economy tanks faster.
"Muppets, er, I mean INVESTORS"
Margin call . Will be retroactive
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Too late? hahahahahhahahahahha
"Too late" for....janet to get some action?
If the Fed doesn't raise rates now, does anyone think the Fed will raise rates during the all-important Holiday buying season Oct to Dec, or during the all-important Presedential election year of 2016?
The Fed has to be nervous as hell. They have printed and printed and printed and printed. Yet demand has crashed, commodities are down, and the global economy is DOA. Frankly, they are too damn dumb to understand why things have not turned out as they promised.
This is what happens with a global and centralized plan. It might be good for 5%, but the other 95% get the shaft.
Even policy in the US suffers the same way. Why would the policy needed in California be the same policy needed in Mississippi?
The best and only solution?
Market based solutions with you and I determining what we would be willing to pay in interest rates and what we would be willing to deposit if we could earn interest.
Every other plan is doomed to failure.
I dont know about you BUT I dont get money ar Zero and I wont save money at zero i loose money on my savings in my prcious but I have the phyz so I just wont participate in hier game
Is that Steen or "Steam"?... As in "steaming' pile...
Yes, if they raise rates, "investers" will run back to the rgged casino, er ah I mean market
Doesn't "Too late to act" imply that any increase in rates ever will implode the world economy? So what the fuck is this idiot's point exactly?
He's trying to make it sound like: "If only the FED would have raised interest rates when I said they should have".
As if it would have made any difference. It's Waaaay too fucking late to do anything. Dig a hole. Jump in. Pull it in behind you.
Well Steen it's "too late" then...cause the un-fed ain't gonna raise rates!
Banksters Inc. said no and when the banksters say jump Jack Yellen sez how high.
Perhaps what he is suggesting is it may be too late to raise the interest rate by -.25% ala 1984.
All of this over an .25% increase?
NO CHIT. David Stockman is about to have a stroke over this very same question.
This is the only factoid one needs when asking if the global financial system is finished, Pau. Kaput. Fork meet steak.
It's not so much about a measly 0.25% rate increase as much as it means no moar QE for the foreseeable future.
Yeah, Right... Everyone's waiting on the The FED to ride their White Horse in and Save us.
White horse of the Apocolypse
Yes Pigasses be its name
The fed can not raise rates. Too soon before the Presidental Election.
They can; however, talk all the BS they want to about why or not to raise rates. But they won't because they can't.
It's already issuing QE every month to cover naked short sales of Treasuries.
He wants the FED to raise rates AND continue stealth QE.
Oh it may become too late to act. Aren't the fuckers richer than they ever have been you stupid son of a bitch. Arrest them. They are criminals engaging in financial warfare against the world's populations you idiot moron.
What a Steening pile of dung.
no shit einsteen.
Or else the dollar inflates, but the Fed might actually want that to happen.
A rate hike would be a rare venture in the direction of sanity on the part of the Fed. It would also be the strongest admission to date that QE, ZIRP, and other related stimulus-like monetary policies have had no real beneficial effect on the physical economy. On the contrary, they have distorted the rational decision making process of the brick-and-mortar economy (i.e. Mainstreet, the 99%) beyond recognition.
Given the scarcity of real collateral out there, given the total indebtedness of governments, individuals, and institutions, the real market-based rate of interest on cash ought to be screamingly high right now, not pinned to the zero bound. As the Fed moves rates ever closer to where the market would set them anyway, the unwinding of all the bad decision making will proceed forthwith. This de-zombiefication of the financial sector will result in the collapse of whole industries that were only buoyed aloft by the endless exhaust of Wall Street money printing.
The only choice is to proceed with the Zombie Republic or to let everything reprice. Any diminution in the strength of the easing trend is a step towards repricing, which is why Wall Street fears even the tiniest of rate hikes. It destroys their rehypothecation chains and begins to distribute such wealth as remains away from financiers and back toward ordinary people. It is never too soon to let rates normalize, but the ordinary people need to do their part by ignoring the short-term pain and the damage to their retirement portfolios and resist the temptation to call for more bread and circuses. The Fed-bashing will have to stop, and it needs to be replaced by corporate bashing and government bashing. Wall Street and its regulatory apparatus are the real culprits here, not the Fed.
A rate hike would weaken the dollar and boost emerging markets? What are they smoking?
Yeah, I don't understand either.
that's crap. i needs my zirp so i can buy moar baba & bidu on margin bitchez.
Investors aren't being scared away. Investors have long ago left the markets. Its only hedge funds and the fed who have propped the market higher. The Hedge funds and fat cats are the ones now doing the selling.
Now the Central Banks an their TBTF brethren are being scared away from the markets.
Who's left? Crickets.
If we got a rate hike of say 0.25% the banks would turn around and raise the interest they charge for their credit cards by 1% and more. Savings account wouldn't see much change in the little interest their getting today. The Banks would continue to screw everyone.
Pension plans and annuities would get some small relief. ZIRP has really screwed-over penision plans.
Did I here him right?
For the dollar to weaken we need the Fed to hike.
I think a hike would increase the $$
And the case could be made for mini-hikes,below a quarter,very,very gradual.Then what?
ROFL, the Fed should of raised rates back in 2008 instead of creating of another bubble. Lol too late. It's already too late.
The FED will definitely raise rates once all the safety nets in the shadow banking system are in place; they have been working on that since 2009. The net is made of paper; that is a problem.