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Esteemed Advisor

herding sheep off the cliff

with the Fed sprinkling sweet feed along the path for The Boyz to make big hay in the well fertilized pastures behind the herd, and then eventually pump and dump off to widows and orphans (what always happens).

Although they didn't see The Black Swan coming, which is sorta how those things work.

Anyway- and apologies for mixing metaphors- the entire herd was run all the way onto one side of the boat and the reef thingy is thus more of a problem. Running with that further- much of the needed fuel for righting the ship was expended by going full speed ahead onto the rocks.


2 Replies
Veteran Advisor

4rth quarter

Earnings will have to justify stock values. 

Those earnings will be pretty dismal.  MO. 

The flu deal is just an excuse for a market correction happening anyway. 

Trump W the tax deal overheated the market bout 10 months 2 soon back in 16/17. Now the markets have to face reality... We're out of funny money now. 

Expect the Dow to be at 17000+ a year from now... Say end of Jan,  2021.

Esteemed Advisor

Re: 4rth quarter

Actually, Da Fed flashed its hand as openly as it could- major repo action well into the future- there's plenty of funny money to come, perhaps limitless. 

Never mind that maybe it should have been saved for an actual problem rather than for the POTUS' re-election campaign.

Earnings were already pretty flat over the last few quarters- we were just playing the Wall Street sell side game where they cut guidance and then crow about it when they beat it by a couple cents. Better Than Expected!!!!!!

NY Fed Nowcast for Q4 currently at 1.22%, Q1 1.77%- hardly a boom. Of course the story will be yeah, but the funny money will deliver growth and earnings down the road. And I was grudgingly accepting the idea that it would help those metrics a bit- enough for a talking point anyway, if not that great. And at great cost.

Unless "something happened."  May have, we'll see. I first noted a week or so ago that some very sensitive canary markets were taking it seriously and you have to be somewhat concerned by the epidemiology. Beyond that, no point in arguing opinions.

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