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Market on the Edge of a Meaningful Breakdown 10/28/22

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14 minutes ago, sandy beach said:

IMHO the Fed is raise rates 75 or 50bps. I can't see them not raising rates with inflation this high. TBAC will take care of the long bond issues instead.

Of course they raise next week. No doubt about that. The tone will be more dovish than last few meetings, but that doesn‘t mean they will pause now.

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4 hours ago, DrStool said:

2-3 day cycle projection 3910. 

I was wrong. 

2-3 day cycle projection now 3900, but I will allow 3910. 

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4 hours ago, fxfox said:

They frontrun that Poopwell will be dovish next week. That‘s all.

They will be proven right. FED shits in their pants.

BUT: It will take a long time till they CUT rates. Till that happens those rate hikes from 2022 will work their way thru the real economy and gonna cause lotsa damage.

 

Again- Fed rate hikes are absolutely, incontrovertibly irrelevant. Why focus on useless shit just because the Street wants you too. It's a waste of mind power. 

The price of money is just the price of money. It's not determinative of anything. Focus on the supply of money. Even economics recognizes that price is set by the LAW OF SUPPLY (and, I might add, demand).

The interest rate is the price of money. It is the effect, not the cause. Financial markets rise and fall in price because there's either too much supply of money, or too little, given the level of demand for it. The US Treasury is the 700 pound gorilla of money  demand. Its money demand fluctuates within a narrow range. Supply is set by the Fed. 

Constant money demand from the US Treasury, and shrinking supply of money from the Fed can only have one result. Higher interest rates. Until one of the inputs changes, interest rates will trend higher. Bond yields will trend higher. Stock earnings yields will trend higher, i.e. PE ratios lower, stock prices lower. 

But the prices will fluctuate within the confines of the trends.  

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4 hours ago, fxfox said:

I think the 2008 analogy is dead.

This becomes either a 2000-2003 bear or the low is in.

There is no analogy. This one is different from the other two. 

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3 hours ago, BurntOnce said:

it was in the wsj that japan is one of the largest holders of us trash. no telling what they're doing mementarily.

OK. They've been unloading.  https://ticdata.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt

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Looks like the 5 day cycle projection will end the week pointed at 3930.

I'm gonna be sick.

Bonne nuit, bonne chance, et bon weekend! 

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Happy Friday!

$1.5m will buy you a "turnkey"  NorCal estate of 20 acres with ~14 acres of established chardonnay:

"This turn-key vineyard estate, affords all the modern lifestyle amenities without all the concerns of having to live in the city."

https://www.redfin.com/CA/Potter-Valley/12556-Powerhouse-Rd-95469/home/161945393

Or... if you prefer, about 10 miles away, that $1.5m will buy you a different "turnkey":

"Stunning south western views of Lake Mendocino from the deck of the main house complement this comfortable turn key' live/work permitted cannabis farm."

https://www.redfin.com/CA/Redwood-Valley/7151-Black-Bart-Trl-95470/home/180546151

 

"Wow, man... have you ever thought about the word, 'turn-key.' Just try to sort of say 10 times fast... it's really weird, man... it starts to turn in to 'turkey...!'"

image.jpeg.e761b72d17b772d94434c4d7baf62a64.jpeg

 

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4 hours ago, Jimi said:

Happy Friday!

$1.5m will buy you a "turnkey"  NorCal estate of 20 acres with ~14 acres of established chardonnay:

"This turn-key vineyard estate, affords all the modern lifestyle amenities without all the concerns of having to live in the city."

https://www.redfin.com/CA/Potter-Valley/12556-Powerhouse-Rd-95469/home/161945393

Or... if you prefer, about 10 miles away, that $1.5m will buy you a different "turnkey":

"Stunning south western views of Lake Mendocino from the deck of the main house complement this comfortable turn key' live/work permitted cannabis farm."

https://www.redfin.com/CA/Redwood-Valley/7151-Black-Bart-Trl-95470/home/180546151

 

"Wow, man... have you ever thought about the word, 'turn-key.' Just try to sort of say 10 times fast... it's really weird, man... it starts to turn in to 'turkey...!'"

image.jpeg.e761b72d17b772d94434c4d7baf62a64.jpeg

 

Prefer House # 1 by far but #2 looks like something that would keep you busy for years to come - plus the view! The question is can either of the properties produce the income needed to sustain even the most basic lifestyle? No!

 

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2 hours ago, sandy beach said:

Prefer House # 1 by far but #2 looks like something that would keep you busy for years to come - plus the view! The question is can either of the properties produce the income needed to sustain even the most basic lifestyle? No!

 

Agreed.

 

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