More Fed Speak Redux
With regard to the Nasdaq Bubble, Uncle Al gave ample warning, 1996: "irrational exuberance", no one paid attention. After that experience, he signaled the bond market at Davo's last year, "anyone who has not hedged against potentially rising rates is desirous of losing money", no one paid attention. He dropped another hint on the bond market after the 10 year yield decreased, despite his racheting up low end rates, "its a conundrum".
Neither individuals, nor institutions listen, so the Fed has decided to disavow the housing bubble and asset bubbles in general. The Fed will not "target" specific assets, and there are no "bubbles".
The Fed will do the only thing it can to reduce liquidity and chase the bond, stock, real estate and oil speculators out. How will the Fed do this? There is no conundrum, they will target the only thing they can, interest rates.
If the market gets an inverted yield curve, so be it. If corporations do not step up to the plate and deliver with jobs, so be it. If private and institutional investors cannot or will not grasp this concept, then let the chips fall where they may, and unfortunately, there will be casualties.
I have been banging on this drum for awhile. Some Pain is Necessary outlines the basics. Conundrum of The Day, lays out the bond market unwind. The Uncle Al's Conundrum Series - Part I, Part II, Part III, Part IV, Part V, and Part VI, cover the bases.
Economic Growth and Lower Interest Rates offers a treatise on growth occurring while rates are kept low. This is the school of thought that Uncle Al subscribes to. The caveat here is that the Central Bank must be vigilant to keep the economy from over liquefying and the speculators running rampant.
Perception is not reality, Money is. details how raising rates in a measured and accommodative manner will convert Stagflation into economic growth and inflation. The caveat here is that the corporations must step up to the plate and deliver jobs and wage growth.
More Fed Speak and OOPS! and Today's Fed Speak detail my interpretations of a cryptic and forgotten language; Fed Speak. Known to cause knee jerk reactions from the media, markets and public alike.
Neither individuals, nor institutions listen, so the Fed has decided to disavow the housing bubble and asset bubbles in general. The Fed will not "target" specific assets, and there are no "bubbles".
The Fed will do the only thing it can to reduce liquidity and chase the bond, stock, real estate and oil speculators out. How will the Fed do this? There is no conundrum, they will target the only thing they can, interest rates.
If the market gets an inverted yield curve, so be it. If corporations do not step up to the plate and deliver with jobs, so be it. If private and institutional investors cannot or will not grasp this concept, then let the chips fall where they may, and unfortunately, there will be casualties.
I have been banging on this drum for awhile. Some Pain is Necessary outlines the basics. Conundrum of The Day, lays out the bond market unwind. The Uncle Al's Conundrum Series - Part I, Part II, Part III, Part IV, Part V, and Part VI, cover the bases.
Economic Growth and Lower Interest Rates offers a treatise on growth occurring while rates are kept low. This is the school of thought that Uncle Al subscribes to. The caveat here is that the Central Bank must be vigilant to keep the economy from over liquefying and the speculators running rampant.
Perception is not reality, Money is. details how raising rates in a measured and accommodative manner will convert Stagflation into economic growth and inflation. The caveat here is that the corporations must step up to the plate and deliver jobs and wage growth.
More Fed Speak and OOPS! and Today's Fed Speak detail my interpretations of a cryptic and forgotten language; Fed Speak. Known to cause knee jerk reactions from the media, markets and public alike.
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