Sims said:
Buck Compton said:
Gordo14 said:
TTUArmy said:
Just sat down to listen to this butt clown and I hear him say that their decisions on monetary policy are "data dependent". Holy crow...I nearly spit my scotch out.
The data from the BLS has been, and continues to be, a blazing dumpster fire. Considering the Fed's dual mandate of stable prices and low unemployment, I've gotta give these jokers a big fat F for missing half of their mandate. The BLS should be put out to pasture. They suck at their job. October rate cut is going to be 50 bps+, probably much more. Markets are going to roar and inflation is going to soar.
How is it a blazing dumpster fire? M/m we've had less than 2% inflation (annualized) for the past 4 months. 2% is the target. How is going from super restrictive policy to restrictive policy going to result in rampant inflation.
Holy ***** I just didn't want this to get missed. Is a federal funds rate of 5.25-5.50% actually considered "super restrictive" now? Until the dot com bubble burst, the lowest we'd seen since the late 50s is like 3%, Exhibit A that we're addicted to cheap/"free" money.
And as someone who use to contribute to PPI, I can guarantee you that the data is trash. it's the best we have, but it's trash. It is a dull instrument and we treat it as if it is precise.
And there isn't much besides aggressively cutting government spending that is going to stave off the inflation wave that is coming. I don't think there's much the Fed is going to be able to to about it, either.
In absolute terms it may not be "super restrictive" but the economy isn't built in absolute terms. You have to look at the delta between where most is financed currently and where it would need to go. If you have a ton of corporate debt sitting out there at 4% then moving it to 7% is surely meaningful and restrictive particularly if business models were built on 4% cost of funds.
Restrictive also implies that it can be restricted...so chances are, we're not talking about government spending which will likely be funded regardless of the rate. Unless of course the "vigilantes" finally show up, but that is still a what if scenario that hasn't played out...for US debt anyway.
The overwhelming majority of corporate AND real estate debt was financed at sub 4%, with many of it on floating terms. Why do you think everyone is screaming so loud to cut rates? Apparently the economy is doing well according to the Keynesians? So why do we need to cut? Because the economy is barely hanging by a thread and the wall of debt maturities in EVERYTHING has only started to begin. As we move toward 2025 and 2026, we hit the meat of the wall, and if rates are above 4%, every single company and property in the country, as well as the government rolling treasuries, will be doing so at higher cost to themselves if they were able to stay solvent and not default/foreclose before they can roll.
That's why there won't be a soft landing. We aren't "finished" with the problem that started all this. We just ended the beginning phase and are in the lull before the next phase.
"H-A: In return for the flattery, can you reduce the size of your signature? It's the only part of your posts that don't add value. In its' place, just put "I'm an investing savant, and make no apologies for it", as oldarmy1 would do."
- I Bleed Maroon (distracted easily by signatures)
