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Weekend Reading: Will They, Or Won't They?
Submitted by Lance Roberts via STA Wealth Management,
The past week has been fairly quiet as all eyes have turned to focus on the Fed and the expected rate hike at the December meeting. Will they, won't they, should they or shouldn't they? Those are the questions being hotly contested by the mainstream media on a daily basis.
Of course, the reality is the Federal Reserve faces the huge obstacle of weak global growth and deflationary pressures which could very well keep them on hold well into 2016. The potential loss of credibility in the Fed by the markets could be the bigger issue to be concerned with.
For now, we wait. The markets rapid surge in October has run into resistance as earnings season rapidly comes to an end. This is at a time when much of the economic data flow shows weakness and investors remain skittish following the summer bruising.
While the markets have entered into the "seasonally strong" time of year, there is a marked difference between the current market environment and that of either the 2010 or 2011 summer corrections. In fact, the current market action as discussed earlier this week, is more reminiscent of a market topping process rather than a simple correction within an ongoing bull market. To wit:
There is little evidence currently that the rally over the last couple of months has done much to reverse the more "bearish" market signals that currently exist. Furthermore, as noted by Jochen Schmidt, the current market action may be more indicative of market topping process."
"Not unlike previous market topping action, the markets could indeed even register 'new highs,' as witnessed in both 2000 and 2007 before the major market correction begins. This is typically how 'bull markets' end by providing false signals and sucking in the last of those willing to 'buy the top.' The devastation comes soon after."
There is sufficient evidence that warrants more caution by investors currently, and patience for a better entry point remains a virtue.
As Gen. James Mattis once stated:
"The problem with being too busy to read is that you learn by experience (or by your men's experience), i.e. the hard way. By reading, you learn through others' experiences, generally a better way to do business, especially in our line of work where the consequences of incompetence are so final for young men ... Ultimately, a real understanding of history means that we face NOTHING new under the sun."
Therefore, while we wait for the market to tell us what to do next, we shall read.
ON THE FED
Jobs Report Greenlights Irrelevant Fed Rate Move by Louis Woodhill via Real Clear Markets
“To the FOMC, the whole point of raising the Fed Funds rate would be to prevent the economy from 'overheating.' So it would make sense for the markets to fall in anticipation of a policy move whose purpose was to slow economic growth.
So, why the late recovery? It could be because, upon reflection, the markets realized that, as long as the FOMC is thinking of monetary policy in terms of the Fed Funds rate, it makes no difference what they do. If the economy were a car, the Fed Funds rate would be the rearview mirror. It is possible to turn it like a steering wheel, but it doesn't affect anything."
As "FedExodus" Looms, Big Stock Gains Behind Us by Paul Vigna via WSJ MoneyBeat
A Debate With Bernanke Over Fed Policies by William Cohan via DealB%k
Not A Done Deal by Joe Calhoun via Alhambra Partners
"Stocks also belie this belief that the Fed finally has it right, that growth is finally accelerating and the real recovery is finally underway. Yes, stocks have rallied nicely the last few weeks and have nearly recovered from their August swoon. But all that has done so far is to bring stocks back to where they were in mid-August just before the sell off. While it is certainly possible that we will yet make new highs, I think it is important that momentum is not confirming the move higher except, again, in the very short term. Long term momentum indicators still show a market in the process of topping."
Worst Case Scenario via Kessler Companies
On To The Next Question by Tim Duy via Fed Watch
ON THE MARKETS
The 60/40 Portfolio Is Dead In 2016 by Jeff Reeves via USA Today
“The two big reasons that clinging to the old 60/40 formula is a bad idea, Puritz says, are a combination of short- and long-term factors.
There's the historic low-interest-rate environment, but also the fact that people are living dramatically longer."
Now Is The Time To Go To Cash by Mitch Goldberg via CNBC
"It isn't too late to sell. In fact, if an older client came to me today and wanted to sell stocks to raise cash, I would find it harder to argue against that strategy."
Is Investor Sentiment Indicative Of Major Top? by Simon Maierhoer via MarketWatch
Next 3-Weeks Will Decide 2016 For The S&P by Avi Gilburt via MarketWatch
"As you can also see from the chart, if wave (iv) support holds, we should be going directly to the 2200 region before we see another larger consolidation, which then sets us up to target the 2300 region to complete wave (3) of wave V of Primary wave 3, potentially near the end of the year.
I will warn you now that this would not be the preferable path for those who are bullish for 2016. Rather, if this is the path we take, then Primary wave 4 will take hold in the first quarter of 2016, will likely last for the remainder of 2016, and potentially take us back toward the 1800 region."
Time For A Pause by Macro Man via Macro Man Blog
The Next 1000-Point Down Day Is Coming by Kirk Spano via MarketWatch
ON THE ECONOMY
Decline And Fall Of America's Working Class by Noah Smith via Bloomberg
“The paper highlights a very disturbing trend -- death rates are increasing for white people in America, especially for working-class middle-aged whites. The increase looks like it has been going on since the late 1990s.
Something very troubling and very unique is happening to American working-class whites.
The immediate causes of the increase are not hard to identify. Drugs and suicide are the culprits. There is an epidemic of prescription painkillers, alcohol and heroin abuse among American whites."
Despair, American Style by Paul Krugman via NYT
Older American's Never More Miserable by Catey Hill via MarketWatch
Social Security - The Long, Slow Default by Kirby Cundiff via Mises Institute
VIDEOS
Jim Grant - 2008 Crisis Didn't Come From Nowhere via Bloomberg
Stanley Druckenmiller - The Chickens Will Come Home To Roost via CNBC
Senator McCaskill Has A Message For Men (Humor...maybe?)
OTHER READING
- 13 Military Leaders Quotes For Better Investing by Elena Holodny via Business Insider
- 18 Inspiring Quotes To Get You Thru Any Challenge by Lolly Daskal via Inc.
- EBITDA Can Be Hazardous To Your Health by Ramy Elitzur via The Accounting Art Of War
- America's Education Bubble by Mohamed El-Erian via Project Syndicate
- The Power Of Common Sense by Morgan Housel via Motley Fool
- The Most Brazen Corporate Power Grab In US History by Chris Hedges via TruthDig
- Q3 Earnings - A Summary And 4-Main Themes by Tyler Durden via Zerohedge
- Lagging Job Numbers Give Investors Whiplash by John Hussman via Hussman Funds
“It is better to be approximately right, than precisely wrong” – J. Maynard Keynes
Have a great weekend.
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give'em 2 days in the red on the market days before meeting and....
it's a lift-off
Will They, or Won't They?
Here's your answer:
http://www.marketoracle.co.uk/images/2015/Apr/Japan-10y-1986-2015.jpg
Any questions?
Just in case that first chart doesn't convince you:
http://myfinancialanswers.com/wp-content/uploads/2015/06/Japan-Interest-Rate.jpg
Do you think we should buy the dip?
Retards deciding what other retards will or will not do, i'm under whelmed.
They won't.
They're all whores, addicted to the Max.
It's all Kabuki Theater... So I Call Bullshit.
The Fed is losing power because they are a newspaper- and TV-based institution in an internet world.
https://thinkpatriot.wordpress.com/2015/11/13/why-not-presidential-debat...
...we should be going directly to the 2200 region before we see another larger consolidation, which then sets us up to target the 2300 region...
effing awesome.
All this bother over .25....it must mean that things are more fucked up than we imagine.
The FED lost all their 'credibility' March 10th 2008 @ 11:00am Bear Stearns time New York shitty, and have no MOAR 'credibility' left to squander, or piss out the window of the Eccles Building, frankly. The only way forward is to abolish the FED, Financialization, Securitization, and the dead currency. Round up the Corporatist thieves that have offshored all the wealth transfer, and hang the lot from the gallows on Pay Per View. Confiscate all their amassed, & appropriated, wealth transfer, and redistribute all the wealth retransferred back to the 99% forthwith.
Unconventional Monetary Policies Likely Mean Rate Hikes Nearly Complete...Not Just Starting
This time around, the hiking process began with the QE taper over 18 month ago...and the finish is coming in early 2016 and more accomodation right behind that.
http://econimica.blogspot.com/
The potential loss of credibility in the Fed by the markets could be the bigger issue to be concerned with
The only credibility the markets are concerned with is the credibility the FED will do all it can to keep said markets elevated. Raising when it will negatively affect the market would destroy the only meaningful credibility the FED has left.
Where are you, ace?
http://www.showrealhist.com/recDJIAtoRD.html
It's just another well staged event, collapse the retail earning numbers as an excuse not to raise, while all along keep claiming to raise to cool the markets . ... Bullish.
Or this is for real and the goal is implosion , either way something is eventually gonna break.
Like any drunk, the real goal is surviving yet another day in hopes of continuing the delusion tomorrow.
The potential loss of credibility in the Fed by the markets could be the bigger issue to be concerned with.
I can't wait for this to occur personally because it is very disconcerting to engage a fake existence everyday in this fairy tale economy that isn't working.
Burn the thing down already, mass chaos, failures, starvation... fuck it, I welcome all of it.
Time to get on with a real existence, in whatever form nature chooses that to be, because status quo is complete bullshit.
It's spelled "yuuuuuuuuuge obstacle"
C'mon, get your act together!
This is so incredibly important, that the Fed should place their decision in a sealed envelope, to be read on the air by the Kardashians.
So we’ve got all the usual suspects out there calling for a rate rise, Yeah, do it, please do it, please do it. These imbeci**s obviously don’t know sh** from cl*y. Do we have to put up with this crap for another month? NO WE DO NOT HAVE TO. We need to tell them (“THEM”) to “DO IT” no more “DATA SIGNALS”. The last time the markets gave the FED data signals the ass fell out of the markets and they S*** themselves.
If the FED raises interest rates it will strengthen the already strong DOLLAR and strangle your exports, thus contracting your economy and sending it into a DEPRESSION.
The U.S. has wonderful numbers, What is the score now, About 60% on food stamps, (whatever that is). Sounds like a socialist utopia HEH, HEH, HEH. In Australia it is called the New Start Allowance. We in AUSTRALIA call it the No Start Allowance because it is just a way to hide the true unemployed and give them a subsistence allowance and keep violence off the streets. My sympathies to all of you in the U.S.A. who believed in the “DREAM” of home ownership and independence.
To anyone who would like to get out of this PONZI scheme there must be a precious metals store nearby.
There is a choice of keeping your life’s labour in airy fairy paper (“PET PAPER”) in which most of the thieves have told you they want to steal (through inflation) at least 2% of your wealth from you.
– If there is deflation you get to keep most of your work (value), If there is the thieves inflation, they get to skim the 2% or whatever off the top, DO NOT FORGET THAT “THEY” CAN TURN ON THE SPIGGOTS TO 10% OR 20% OR WHATEVER and just steal that amount of your life’s work from you.
Or you can convert your excess labour into HARD OBJECTS,
LAND, (can be taxed),
BUILDINGS, (can be taxed),
CARS, (can be taxed and subject to depreciated value),
ART OBJECTS, (subject to personal preferences),
BUSINESSES, (usually valued in (“PET PAPER”) and subject to the honesty of management, ETC.) YEAH, RIGHT. We know all about that don’t we?
Getting back to the difference between “PET ROCKS” and “PET PAPER” and now – wait for it – “PET DIGITALS”. I nearly p****d myself when I heard you can give up your life’s work to (invest) in “PET DIGITALS” HEH, HEH, HEH. _YEAH RIGHT.
Give me a break. Do you think I’m a complete F*** W***.
Sorry about the rant folks, but you seem to give a few others a bit of leeway, and it was a good bottle of Muscat liqueur.
As far as investing in “PET ROCKS” or “PET PAPER” or “PET DIGITALS”, maybe you should ask the _Indians, Chinese, Russians, Germans (sorry you can have your GOLD back in ??? years) _because I am not licensed to give investment advice.
I loved to spill my guts after only 6 months of posting. Best to you all _JOHNLGALT
Lot's of feral cat colony's around here.
How do you make 'Muscat Liqueur'?
These m*****f****** making money from money think they are creating "wealth." Very funny.
It seems, um, rather unlikely that our privately owned central bank will do something that is very likely to be a catalyst for a market collapse just before the end of the year bonus season for the people at the banks who OWN our privately owned central bank.
Nearly everyone is misdirected by FALSE ALTERNATIVES. How so?
-----
FALSE ALTERNATIVE #1: hold rates
FALSE ALTERNATIVE #2: raise rates
FALSE ALTERNATIVE #3: lower rates
And so, what is the correct alternative and right thing to do? The alternative never mentioned by any predator-DBA-government, predator-DBA-centralbank or predator-DBA-mainstreammedia?
ACTUAL ALERNATIVE: Let interest rates find their natural level.
Want to borrow? Go find someone willing to lend to you at terms you can accept... else don't borrow.
Want to lend? Go find someone willing to borrow from you at terms you can accept... else don't lend.
How simple can you get?
How natural can you get?
And how utterly unacceptable can you get... as far as any central-planning predator is concerned? Yup, that's right... completely unacceptable. Tyranny or bust would be their slogan... if they were honest.
@espirit
Lot's of feral cat colony's around here.
How do you make 'Muscat Liqueur'?
Thanks for reading my rant, however I should let you know it's made from "MOTHERS MILK" (or at least it tastes like it) JOHNLGALT.