Gold has pulled back after breaking out of its trend channel. That’s usually a sign of a top. Now what?
The Fed is throttling back on its market supporting QE operations. The results of that may be starting to show up in stock prices. Is the Fed worried? Should you be?
The Fed has created the illusion of functioning markets, but today futures traders are striking back. The Fed, with all its trillions, may not have the control that it wants, and Wall Street wishes. Today looks pivotal in that regard.
Short term cycles are due for tops and little pullbacks at least. If it doesn’t happen, it would be another sign that the long term…
The Fed’s massive bailout of Primary Dealers and its alphabet soup loan programs for all other big financial players, have now made moral hazard permanent and structural. Why worry about risk when you know that the Fed will always take you off the hook when the shit hits the fan?
How can we know how this will play out? How can we know if these loans can ever be repaid? Will they be repaid through inflation, perhaps hyperinflation? Or will the borrowers simply default if the markets and economy recover too slowly?
Then who will be on the hook for the Fed’s guarantees when the Fed must assume the losses? Who pays? Taxpayers? Depositors? Everyone, again through massive inflation?
Of course, there’s always a chance that everything turns out just fine. The world returns to normal in a few months. The economy bounces back, and all the trillions lent by the Fed gets repaid timely, with no financial price to be paid.
We don’t know, but there will be telltale signs in the weeks ahead that will give us a heads up.
Here’s a table of today’s Fed QE purchases. How much bang did the Fed get for its bucks?
That was a perfect setup for a launch at the bell yesterday. A lot of big boys knew what was coming and how to position for it. Then just after the bell news came out that a drug being tested for treating COVID19 was showing good results. BOOM!
Is this liftoff, or a launchpad explosion?
Here’s a table of today’s Fed QE purchases, but this isn’t the whole story. What happened yesterday, that nobody reported, is.
Futures were backtracking all morning, then a truly horrible, but expected, jobless claims number came out. So of course the futures rallied to resistance. Here’s what to expect in regular trading hours today.
We expected the worst, and we’ve gotten it. But that does not mean that things will get better. The revenue trends had been strong. Now they’re awful, and spending is unimaginable. How can this be sustained? In this report, I’ll show you the data, and discuss how to handle what’s to come.