Monetary policy can be implemented through outright purchases or sales of securities, which permanently changes the size of the Federal Reserve’s System Open Market Account (SOMA) portfolio.
The Fed unveiled what was supposed to be shock and awe. Instead, it was the predictable series of upsizing the bazookas, monetary armaments in name only. I’ll write it again: there is no money in monetary policy. Central banks are not central. That was the primary lesson of September’s repo rumble, and not for the […]
KISS. Keep it simple stupid. Mella has perfected the art. My turn to give it a shot. Why? Because markets are very complicated and uncertain right now and when things are complicated […]
When the Fed first dropped its biggest Stupid Bomb in history announcing that it would offer a cool trillion a week in term repos, I warned that it was the wrong medicine for the wrong disease and that there would be few takers.
Little did I suspect.
The Fed pretended to fire a bazooka on Sunday with its announcement of $700 billion in market intervention in outright purchases. But it was really a popgun. The futures went limit down again when the market opened in Asia last night and have stayed there.
The SPX has broken out of its original crash channel to the downside. It’s in a new channel with a slope of -46 points per day. Long term signals are already extremely negative, and are on the verge of turning catastrophic, cataclysmic, and apocalyptic.
I’ve run out of adjectives.
Monetary policy can be implemented through outright purchases or sales of securities, which permanently changes the size of the Federal Reserve’s System Open Market Account (SOMA) portfolio.
It’s not working. Show them the money, Jerry.
Bad money after bad.