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The Fed Has Never Raised Rates 9/20/22

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This is it, right here. 3869. If that breaks, the baby dinosaur that has formed on the chart of the ES, 24 hour S&P futures over the past two days, will be euthanized. So sad. 

The next likely stopping points would be either 3860, or the lows around 3833. On the other hand, if they hold back up we go to test the top of the range. 

tvc_dcd9b952e2863278cb9bca6df657bf00.png

Obviously with the Fed on tap, the norm is for muted moves. Nothing happens in the stock market until the FOMC rubber stamps the rate market that leads the Fed, and then Jerome Powell spews a bunch of BS and lies about what they did and why. 

It's funny that the media talks about the Fed raising rates. The Fed never raises rates. The rate market goes up on its own because money is tight. The Fed doesn't even catch up with the market. 

In fact, the real money market is up 105 basis points since the last time the Fed "raised" rates six weeks ago. 

tvc_ed50d815c5a4852459718bea150a9627.png
So again, the next time you hear them say that the Fed has raised rates, recognize that the Fed has never, not once, raised rates in this cycle. It follows the market, and it has yet to catch up with it. 

Meanwhile, the big picture: 

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Most people are not afflicted with excessive literalism so if the Fed manipulates the market by intervening in it that is the same as "setting" rates. The mechanisms being irrelevant to them. For most people it is the result that matters. 

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THE CHOICE THE FED HAS MADE....THE CROWDED TRACK 

So the FED is no longer printing.....

Might even do some QT....

Inflation should go down....but not back to 2%......

So where are we now.....

We are on the other track....the crowded one.....

This is where all the defecit loving governments now compete for the limited supply of capital.....borrowing.....without the FED increasing the amount that can be borrowed....

Its called the "crowding out effect"....I remember the 70's......

I remember seeing the crowding out effect way back then..... 

Thats what we are having now.....Government defecits crowding out private sector borrowing....

By offering higher rates for the limited supply of debt.....

This will be felt in the junk bond market.....

And in the housing market....

Then in the investment grade market

Already its not pretty.....

This will suck debt capital from periphery countries back to the USA....

Que debt distress and default by said periphery countries....

Que rising US$ exchange rate as funds sucked into USA to fund Government defecit.

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You know the ol' saying...

If they can't crack it down...they're going to crack it up.

I only care about two things...Volume and 2nd Day Confirmation.

Ideally...I'd like to see an explosion back through 3900...and then a grand failure the very next day.

Surgery on Thursday.

TCG

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12 hours ago, The CoinGuy said:

You know the ol' saying...

If they can't crack it down...they're going to crack it up.

I only care about two things...Volume and 2nd Day Confirmation.

Ideally...I'd like to see an explosion back through 3900...and then a grand failure the very next day.

Surgery on Thursday.

TCG

Best of luck -  Sending positive particles via Quantum Mechanics! 

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