Is This Where "The Rubber Hits The Road" Becomes "When It All Came Off The Rails?"

Tyler Durden's picture

Via Mark St.Cyr,

As we sit here waiting to see whether the Federal Reserve does, or does not, raise interest rates; one thing is becoming clearer: This time – it’s different.

Say what you will for all the prior calm that the “markets” seem to be expressing, or argue as so many next-in-rotation fund managers scrambling to any open microphone or camera to explain their reasoning that the “markets” have “priced in” any such policy changes.

Or, maybe you are taking solace in the arguments now being professed by the merry band of Ph.D economists, “think-tank” aficionados, or Ivory Towered academics as they explain why “The numbers show the Fed. is on the right track and pace.” Even though just a few months prior (October to be exact) this same cohort argued and backed Ms. Yellen’s own assessment and proclamations. To wit:

The Federal Reserve may need to run a “high-pressure economy” to reverse damage from the 2008-2009 crisis that depressed output, sidelined workers, and risks becoming a permanent scar, Fed Chair Janet Yellen said on Friday in a broad review of where the recovery may still fall short.

Yet, that was then, and this is now. Or said differently – that was right before the election when the results were all but a lock, and this is after, when all those “locks” were smashed into oblivion.

It was also when the “markets” were (here’s that term everyone seems to have forgotten)  – once again – rolling over and feeling a lot like all those times previous where the next stop “Bullard Bottom” – once again – seemed inevitable.

Below is a “picture” as “The Valley” likes to call it to bring back a few memories. To wit:

(Chart source)

Just to refresh those memories a bit more: those saves and bounces off that “Bullard Bottom” over the past 24 months or so has not been the result of some sudden “great economic numbers!”, or “improving data!” No, those are all the result of one Fed. official after another rushing to any open microphone, camera, or publication as the “markets” were – once again – rolling over to make the “markets” explicitly aware, “They were at the ready, and would consider even more QE or other measures if needed.”

The last time the “markets” seemed to need more handholding because the economic data was showing that there really was no foreseeable catalyst to warrant further gains was? Hint: “High Pressure” speech.

Then – Donald Trump became the President-elect. And the “markets” suddenly turned on a dime and the resulting price action can easily be seen on that chart above.

Now here’s where the title of this article comes into play, and for this reason: What was the catalyst?

A: Real economic data improvement and numbers? Or B: Hopium?

If you watch, listen, or read most financial/business mainstream media and the gaggle of so-called “experts” being paraded out to now spin everything with such ferocity it makes a washing machine envious, you might be inclined to say “A.”

If you can still confidently state regardless of being laughed at, disparaged, or ridiculed by most mainstream academics that 1+1 still equals 2? Then you know full well the only correct answer is B. Period. And that’s a very big problem for the “markets” as they now stand.

 

The Federal Reserve appears hell-bent to not only raise interest rates, but raise them at a pace the “markets” only some 90 days ago assumed that 2, and maybe if that (and that maybe was more assumed to be 1 if not none) further rate hikes were possible. You know, based on the “data.” Then – the election results became known.

And with that “doves” became “hawks” and not only did the “Dot Plot” signal even more hikes possible, but the Chair in her subsequent presser after the second hiking in nearly 10 years all but shouted not only were more hikes forthcoming, but possibly even more than the “market” ever contemplated as expressed via her responses to questioning about how the Fed. would deal with any forth coming fiscal stimulus proposals emanating from the new administration.

Yet, there’s now a real issue hanging above the “markets” like the “Sword of Damocles.” All that priced in “hopium” is meeting resistance far more treacherous than any terrain that ever greeted a wheel. e.g., Politics, politicians, and their pet peeves.

Suddenly healthcare reform appears to be an ever-growing political nightmare. Both for the GOP, as well as Trump. And it’s setting the stage (and viewpoint) of just how well every other “promise” or “initiative” is going to be treated once it hits the light-of-day (or backroom shenanigans) of congress.

Add to this how the CBO (Congressional Budget Office) is scoring things and the administrations now open war with it, the Democrats sudden 180 that now “debt does matter”, the coming debt ceiling show-down within days if not weeks, and the Fed. about to raise the borrowing costs not just once in 90 days, but twice, and might signal even more.

Emerging markets (think China) will almost surely buckle and moan under this new aggressive rate hiking. Japan signaling it will reduce its own QE program, along with the same type signaling coming from Mr. Draghi. Never forgetting – QE and central banks foray into the capital markets (just one example: Swiss National Bank) along with the allowing for corporations to borrow at nearly free money and buy back their own shares is the only reason there has been a market these past 8 years.

And suddenly (it appears) that it’s all about to end. For we are now in the cycle of the Trump presidency where all those “promises” are to begin taking shape. e.g., “Where the rubber meets the road.” Anxiously awaited for by both Republican controlled houses of congress.

A trifecta which should be beneficial for getting or passing a pro-business, pro-tax reform, pro-healthcare reform, true infrastructure spending (as opposed to “shovel ready jobs’ that required no shovels only party affiliation) and much, much more as witnessed by the exuberance of “markets.”

And yet a lot of voter, business, et al hopes, along with support, are beginning to vanish into the cloud of smoke filled haze of political bickering, inter-party standoffs, a sudden “debt does matter” opposition party, and a Federal Reserve about to make anything current, and anything forthcoming, a whole lot more expensive. Both here in the U.S., and around the globe.

And it’s only March.

This current display of political gamesmanship as witnessed by the current debacle and spectacle playing out in healthcare reform alone is morphing ever greater by the day into an unmitigated political, and empirical disaster as currently formed. A lot of the so-called infused “hopium” that we’ve witnessed in the “markets”, as well as electorate, are beginning to deflate. Along with the realization that it’s quite possible – so too maybe entire Trump agenda. We can only wait and see.

Yet, the “markets” have that all priced-in I hear.

Sure they do. Just like the Fed. is “data dependent.”

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esum's picture

Fed = deep state

FreeShitter's picture

Sheeple = in deep shit

NoDecaf's picture

There shant be a raise

not on a boat

not with a goat

 

Squid Viscous's picture

i prefer "my rubber fell off, so sorry"

Lets Buy The Dip's picture

of course, its not doubt they will raise interest rates tomorrow, rates up market down, it seems. 

THis is shocking chart to see how actually overbought the stockmarket is right now. ==> http://www.bit.ly/2nhCXoG

TheRideNeverEnds's picture

Rates up markets up.

Rates same markets up.

The only real question is how days will it take for gold to get back under 1000 on its way back below 500?

Fed Supporter's picture

OT, but more fake news. Another manipulated poll. Surprise surprise on election eve:

Wilders's Party Slumps in Final Dutch Polls on Election Eve
https://www.bloomberg.com/politics/articles/2017-03-14/wilders-party-slu...

I think the globalists are doing to same to Le Pen in France.

The bullshit does not stop.

venturen's picture

FED = Daddy/Mommy money for Wall Street

 

Wall Street no longers cares one iota about building business....they are scam, scam, scam. Till I see banker leaders going to jail for their crimes....nothing is going to change. The .000001% now take 99% of profit. The working class....is left for dead by the banker class...that bribes washington for all.

 

Ted Cruz's wife works at Goldman...why?

Paulson....became Treasury Sec...why?

Dudley is there why?

Cohn is there why?

 

SixIsNinE's picture

Paulson - so he could sign the Benjis.  looked at one today and saw that scoundrels signature.

 

Archibald Buttle's picture

return it and ask for a different one. or better yet, trade it to some other person you don't like who also "hoards cash."

SILVERGEDDON's picture

FED - fucking over people, and stealing money from them, since the very beginning. 

mtndds's picture

Pffftt, the market will either gain 300+ points or go nowhere tomorrow.  The FEDERAL RESERVE will/cannot let the market crash.  It wont happen.

ms8173's picture

401K plans=  FUCKED!

spicedune's picture
spicedune (not verified) Mar 14, 2017 7:02 PM

if you are wondering why we cant really know the price of rubber take a look at www.inflation.co and let the webmaster know where to get rubber data

mosfet's picture

This time – it’s different.

This time – it’s different.

This time – it’s different.

This time – it’s different.

This time – it’s different.

This time – it’s different.

This time – it’s different.

We really don't give 2 shits about whether it's different this time or not...just get on with crashing part already.

//Most anti-climatic Depression ever

J bones's picture

Sell stawks and buy physical PM's

J bones's picture

While your at it.. Transfer your pensions and 401k to money market then get paid to wait.

FreeShitter's picture

QE never ended. 

esum's picture

Rubber hits unlubed pussy

PirateOfBaltimore's picture

I'm imagining the sound of dragging your fingers across taught plastic wrap. 

 

Similar to the sound of a screeching halt.

crossroaddemon's picture

A gentleman always carries some lube in his coat pocket...

FreeShitter's picture
  • What, you think Becca's going to be psyched that you brought a bottle of lube? "Oh, Evan! Thank you so much for bringing that lube for my pussy! I could never handle your fucking four-inch dick inside my pussy without your gigantic bottle of LUBE!" These girls are 18 years old. They aren't dried up old ladies, man. They're good to go!   -SuperBad
Brazen Heist's picture

A real gentleman knows how to trigger pussy so it lubes itself. No need to carry.

crossroaddemon's picture

You've never had a set break quicky, have you?

Brazen Heist's picture

I'm not a quickie man. In that case, keep the lube in the pocket!

crossroaddemon's picture

I never go on the road without lube and rubbers...

Deplorable's picture

Within the next 24 months, the dollar is likely to start losing value rapidly and noticeably. Foreigners, who own over 6 trillion of them (including T-bills and other IOUs), will start panicking to dump them. So will Americans. The dollar bond market, today worth $40 trillion, will be devastated by much higher interest rates, a rapidly depreciating dollar, and an epidemic of defaults.

Deplorable's picture

And that will be just the start of the trouble. Since the U.S. property market floats on a sea of debt (and is easy to tax), it’s also going to be hit very hard, again, this time by stifling mortgage rates. The next step is up for interest rates. Forget about property owners paying their existing mortgages; many won’t be able to pay their taxes and utilities, and maintenance will be out of the question.

Brazen Heist's picture

With rate rises in the States, and the Euro/Pound tanking, its hard to imagine the dollar also tanking, unless stocks crash. I'm very bearish on all things Europe this year. It won't be a good year for the Euro. Parity will be reached this year. I'm more bullish on the USD.

Vlad the Inhaler's picture

Bill Gross said 2.60% on the ten year would tank the market.  The ten year is sitting at 2.60% with what could be a bull flag. 

withnmeans's picture

Vlad, Bill did say that. However if you watch his interview, he said if it were to stay above 2.60% for a period of time. Not just bump it and retreat. Like Bill, if it were to stay here and form a "bottom" so to speak, then continue its rise. Yes, by all means, put on your blast helmets.

ali-ali-al-qomfri's picture

all aboard, hahahaha

I'm going off the rails on a crazy train.

Irving Phelps's picture

This is when China announces it has 40 tons of gold on reserve and it blows the hell out of the deep state!

Fester's picture

40 tons?

Settle down man, your blowing my mind.

/s

Fed-up with being Sick and Tired's picture

You know what? This guy is RIGHT: ALL OF A SUDDEN, DEBT is a big issue (read it ALL OVER now, when it was barely mentioned in 8.5 years); AND, all of a sudden, three hikes possible. AND, we see Japan and THE EU CB's ending QE raising rates, etc? HMMMM? I hope he is correct. We need a pull back or a correction.

Archibald Buttle's picture

nope. need the full on crash. when all the sheeple that don't want to rock the boat cuz that juicy pension is right there within arms reach get cut off, and see every fatass getting the free shit, now that is where the rubber is going to finally hit the road. battle of the ponzi victims. and the winners skate with all the loot.

MuffDiver69's picture

We didn't get here on economics. More politics. Interest rates need to go up, but it sure as hell ain't for reasons stated...bunch of clowns...

buzzsaw99's picture

years ago an english girl asked me if i had a rubber. i was excited about where the conversation might be going until i figured out what she really wanted was an eraser.

aloha_snakbar's picture

Sooo... did you have a rubber?

JailBanksters's picture

Looks like it would make a great coaster at Magic Mountain

Rich Monk's picture

This has been planned. The Zionist Jews have no problem destroying the wealth of all non-Jews. This has been done many times before in History!

Turin Turambar's picture

My guess is that there is no rate increase tomorrow, so the algos are gonna have a field day of a rampapalooza.  Short squeeze to new record highs anyone?

 

JailBanksters's picture

depends what your definition of an increase is

what if it went up 5 points, 5/100th of one percent, is that an increase ?

You certainly won't see 1 percent, you may see 1/2 of 1 percent

so between 1 and 50 points can that really be called an Increase

 

 

Aquarius's picture

We must pause and have a minute's silent prayer of thanks to the USA "leadership" that has sacrificed this once great Nation so that the rest of the World can progress into freedom. The USA has become the greatest martyr for the Freedom of Humanity.

As the FedRes destroys its nation's industries, employment, its currency, its credit rating, its integrity, it drives the USA and its people into a devolution of corruption and decadence; it makes a state of Grifters and sleaze street gangsters and a nation of muppets, game and fresh blood for the hunt, of all its peoples so that we may thrive and evolve. Never before in the written history of man has such human sacrifice and genocide been forth coming. This FedRes holocaust has taken much dedication and effort to bring into emergence whereas the Intellectual energies invested in this venture do great credit for those Institutions burnt to the ground for this magnificent end.

And the CIA and other "Ïntelligence"Agencies destroy USA Technology gains which have been, until now, unchallengeable; champions of the Epoch; Apple, IBM, Google to name a mere few and Social Networks, are all being sacrificed to the greater good of global Humanity; such has been the state of USA advances in technolgy, leading the World; until now, to the USA, gutted; finished; a roasted bull.

While those dedicated and loyal political "leadership" of the USA, sell off their former Nation to the highest (any) bidder, foreign and otherwise, and kill off their future; their young and able, their nation's only resources, in a continuity of blood sacrifice on foreign shores. Where else to find such selfless piety to Humanity and its evolution; the advance and harmony for World Generation.

And the USA MSM owned by the CIA / NSA publish this Nation's sacrifice in fairy tale stories to deflect this National sacrifice so its peoples do not suffer in the knowledge of their own hard fate. Their Destiny short lived by the hand of gracious USA "leadership". 

All hail the Martyr. Long live the USA

A silent Prayer, and tear, as we say Goodbye - so as  to show our appreciation and thanks for such unselfish sacrifice on behalf of Humanity

Amon.

https://verbewarp.blogspot.com.au/2016/01/devolution.html

https://verbewarp.blogspot.com.au/2006/07/global-economic-collapse-new-g...

https://verbewarp.blogspot.com.au/2016/10/the-sun-rises-in-east.html

SixIsNinE's picture

don't forget -  also destroyed our gender.    the nation is now an "it".   

 

don't worry be happy: Cali News:

1) SF Noe Valley remodel is only 4.3 million and has a built-in trampoline in the back yard

2) Marissa Mayer gets $23 million to leave Yahoo

3) LA - caught the 23 yr old thug who seized a 2 year old at a park and tried to sodomize it

4) Proposal to allow 17 year olds to vote in California

 

 

Archibald Buttle's picture

if we can get at the very least a new wild west, or even better a frontier, out of the deal then i say the sacrifice may be worth it. the man in the street is in no position to negotiate with those in charge at this juncture. cut the best deal you can or submit.

gregga777's picture

The Black Jew Bloc wants to destroy President Donald Trump. And which group, led by luminaries such as Arthur F. Burns, Alan Greenspan, Benjamin Shalom Bernanke and Janet Yellen, has controlled the Goldman Sachs Feral Reserve System for 4 out of the past 5 decades? That explains why the Goldman Sachs Feral Reserve System is plotting to aggressively raises rates NOW after more than 8 years of near-ZIRP and ZIRP under DimmoMarxist Bucking Ofama.

TVP's picture

Yes, Goldman Sachs is planning to destroy Trump, that's why they infiltrated his cabinet!

He didn't select them on his own because he's a controlled-resistance traitor.  That's just blasphemy.