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He Called the Bottom - 7/20/22

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BTC has broken out, in a move that measures to at least 25,500 and as much as 28,000.  There's uptrend channel resistance at 24,400. If they break out of that, then it would have clearance to the first real resistance level around 26,600. It looks like a 6 month cycle upturn. The next downturn isn't due until December-January. 

ykeb0

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Real market short term interest rates are now up 92.5 bp since the Fed's last rate setting circus in June. If the Fed only goes 0.75 it will prove yet again that they are not serious people. 

ykebt

The Fed is tight in terms of Q of M, and the market has shown it, but the Fed maintains this rate setting sideshow for some godforsaken reason that I can't fathom. History shows that inflation doesn't cool until rates are punitively positive. Right now they remain massively negative. 

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Recession? What Recession?

 

 

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Nobody believes interest rates  can whip inflation now, or at least nobody believes that  punitive rates will ever be enacted by central banks again.  So we are at the 'What Me Worry' stage in the market. Actually nobody believes interest rates can rise more than a few points in any possible case. It's an idea beyond most people conception. 

So as ever we await rates rising against  central bank wishes and powerless to stop them. Or as the man said long long ago, nothing's changed until rates rise. 

 

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The 13 week bill rate has gone from 0 to 2.5

The 1 year has gone from 0 to 3.15

The 10 year has gone from 0.5 to 3.5 before pulling back to 3.0.

These are the largest, fastest rises in history. It has been a draconian tightening and it will get even worse as the Fed remains massively behind the curve.

And the market goes tro lo lo. 

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7 hours ago, DrStool said:

The 13 week bill rate has gone from 0 to 2.5

The 1 year has gone from 0 to 3.15

The 10 year has gone from 0.5 to 3.5 before pulling back to 3.0.

These are the largest, fastest rises in history. It has been a draconian tightening and it will get even worse as the Fed remains massively behind the curve.

And the market goes tro lo lo. 

The thing is those rates are a joke when measured against the inflation numbers. They are an incentive to borrow.  Everyone knows the Fed is a joke and that's exactly how they want it.  Until they don't.

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