The Fed’s BIG Green Bag! MSCI Global Technology Index Has Worst Month since October 2008 As Fed Withdraws Stimulus (NASDAQ, PayPal, ARKK All Tumbling)

I feel like I am living in the horror movie “Saw”. The Federal Reserve is tightening their BIG green bag of money to fight inflation … caused by Biden’s energy policies and massive Federal government spending.

(Bloomberg) Stocks fell, pressured by rising Treasury yields and signs that company earnings were set to disappoint. A gauge of the dollar climbed to the highest this month.

European shares declined for a fifth straight session as bond yields jumped amid concerns of persistently high inflation as well as the impact of hawkish central bank policies on global growth. The Stoxx Europe 600 Index dropped 0.6%, with futures on the S&P 500 down by about the same magnitude, pointing to another risk-off day on Wall Street.

The mood is fragile ahead of Thursday’s US inflation data, with the case for another 75 basis-point rate hike likely to be strong if the reading comes in higher than than forecast. Fed officials until now show little sign they are in a mood to pause the rate-hiking cycle despite the potential hit to economic growth.

As The Fed tightens, the MSCI Global Technology index had the worst month since October 2008.

And the NASDAQ Composite index continues to fall with Fed removal of money. Hold on to your lugnuts! Because The Fed hasn’t stopped tightening.

Both ARKK and PayPal have gotten clipped by The Fed too.

The Perils Of Fed Tightening 2: US Mortgage Rates Climb To Highest Since 2000, Mortgage Demand Falls To Lowest In Recorded History (Great Job DC!!)

Happy Columbus Day!

As I discussed yesterday in my post entitled “The Perils Of Fed Tightening In One Chart (Or Sweet Home DC!) Treasury Yield Curve Remains In Reversion And Stock Market Declining As Fed Reduces Money Supply Growth,” The Federal Reserve is tightening its monetary policies to combat 40-year highs in US inflation caused by 1) Biden’s anti-fossil fuels mandates, 2) excessive and reckless spending by Biden and Congress and 3) excessive monetary stimulus from The Federal Reserve.

Another casualty of The Fed’s tightening and reduction in M2 Money supply are … the mortgage and housing markets. The US mortgage rate has soared to 7.04% (highest since 2000) and mortgage DEMAND has fallen to the lowest level in recorded history.

Here is my chart from yesterday showing the inversion of the US Treasury 10yr-2yr curve and decline in the S&P 500 index as The Fed tightens.

And then we have this chart showing the most-extreme foreign Treasury outflow since March 2020.

At least The Fed is predicted to start cutting rates again in March 2020.

Yes, Biden and Powell have reenacted Kevin’s famous chili spill. And Ben Bernanke, the creator of QE from late 2008 was just award the Nobel Prize in economics for distorting financial markets.

Biden Releasing 10 Million More Barrels of Oil From US Strategic Petroleum Reserve (Reserve DOWN -35% Under Biden Before Additional Release, Foodstuffs UP 50%, Heating Oil UP 130%, Gasoline UP 61.4%, Public Debt UP 12%)

Nothing from nothing. The should be the campaign motto for the midterm elections.

What do we have? Regular gasoline prices are UP 61.4% under Biden, the strategic petroleum reserve is DOWN -35% before Biden’s latest release of another 10 million barrels. Foodstuffs are UP 50% under Clueless Joe, and heating oil futures are UP 130% under dementia Joe.

And thanks to free-spending Joe, Nancy and Chuckie, US public debt is at $31.1 TRILLION. That is ANOTHER 12% in national debt under the 4 Horsemen of the Economic Apocalypse.

For an additional 12% in national debt (to be paid by our children and grandchildren), we have crippling inflation.

Great job DC!

Lehman Debacle 2? Credit Suisse Market Turmoil Deepens After CEO Memo Backfires (Credit Suisse’s CDS Now Higher Than During 2008-2009 Financial Crisis)

New CEO Koerner sought to reassure employees in Friday memo
Shares fall to a fresh record low, gauge of credit risk rises

It is like the Lehman Brothers debacle in 2008 all over again.

(Bloomberg) — Credit Suisse Group AG was plunged into fresh market turmoil after Chief Executive Officer Ulrich Koerner’s attempts to reassure employees and investors backfired, adding to uncertainty surrounding the bank.

The stock, which had already more than halved this year before Monday’s sell-off, fell as much as 12% in Zurich trading to a record low that values the firm at less than $10 billion. That was accompanied by a spike in the cost to insure the bank’s debt against default, which jumped to its highest ever.

Koerner, for the second time in as many weeks, had sought to calm employees and the markets with a memo late Friday stressing the bank’s liquidity and capital strength. Instead, it focused attention on the dramatic recent moves in the firm’s stock price and credit spreads, and investors rushed for the exit when trading reopened after the weekend.

One notable difference between 2008 and today is that Credit Suisse’s equity was flying high in June 2007 then crashed a the global banking crisis went into full motion. We then saw Credit Suisse’s credit default swaps soar in early 2009. But today Credit Suisse’s equity is a pale imitation of its former self, but its credit default swap is now higher than it was at its peak in early 2009.

Credit Suisse is now trading lower than its European rival Deutsche Bank (aka, The Teutonic Titanic).

Yes, this brings back sickening memories of the 2008-2009 global financial crisis. Let’s see how The Federal Reserve, ECB and Bank of Switzerland handle this debacle, particularly with M2 Money growth so low.

It appears that we are in another Lehman debacle. Or should I say “Lemur Bros.”

Livin’ In Biden’s Paradise! Percentage Of NYSE Stocks Closing Above 200 Day Moving Average Collapses To 13.48% (Bollinger Band, Fibonacci, Elliott Wave, Ichimoku)

My 401k is Livin’ in Biden’s Paradise.

The percentage of NYSE stocks closing above the 200 day moving average has collapsed to 13.48% as The Fed tightens to fight Bidenflation.

Bollinger Bands? The lower band is near breaking.

Fibonacci retracement? NOT retracing.

Elliott Wave? I feel like I am at the bottom at Nazare, Portugal.

Ichimoku cloud? The NYA index is so far below the cloud it has landed.

Yes, I feel like my 401k is surfing at Nazare, Portugal.

Wasting Away In Bidenville! Dow Tanks -500 Points On Friday As Fed Reaffirms Their Fight On Bidenflation

My investments are wasting away in Bidenville! Looking for my lost 401k value.

The Dow Jones Industrial Average was DOWN -500 points on Friday as The Federal Reserve continues their fight against inflation (green line).

If fact, since January 4, 2022, the Dow is down -22%.

Negative wage growth, relentless inflation, collapsing 401ks, we are wasting away in Bidenville.

Hey Joe! Where is the US economy? With Jackie Walorski??

Living In An Inverted (Bond) World! 19 Nations Have Negative 10yr-2yr Yield Curves (As US Housing Inventory For Sale In SOARING Out West)

We are living in an inverted (bond) world!

19 nations now have inverted 10yr-2yr yield curves.

And housing inventory for sale growth is soaring out West and in Tennessee?

At least Ohio is seeing a modest increase in housing inventory for sale.

On a parting note (before I watch the Ohio State Buckeyes annihilate the Rutgers Scarlet Knights tomorrow at 3pm EST, reverse repos parked overnight at The Fed just hit an all-time high. Apparently, banks don’t believe Janet Yellen’s inflation is transitory mumbo-jumbo.

UMich Buying Conditions For Houses Remain Depressed As Fed Tightens (Fed’s Brainard Calls For Fed To Keep Tightening!)

Bidenflation and The Fed’s counter-attack has caused considerable damage to the housing and mortgage markets.

Today, the University of Michigan consumer sentiment indices were released for September. Of note, buying conditions for houses remained in the tank.

Meanwhile, Fed Vice Chair Lael “Brainless” Brainard is calling for The Fed to NOT stop tightening money and raising interest rates.

As The Fed tightens, the entire range of Agency MBS TBA (to be announced) are under $100.

For example, the FNCL 2.5% TBA is now 84-17. And falling like a paralyzed falcon.

Here is Brainard with Fed Chair Jerome “Foul Owl” Powell, the dynamic duo of crashing markets.

Wipe Out! $32 TRILLION In Stock Value Wiped Out (US Core Deflator Rises To 4.9% Prompting Taylor Rule Fed Target Rate Of 9.65%, We Are Currently At 3.25%)

Wipe out!

$32 TRILLION of global stock value has been wiped out since December 2021.

Today’s core PCE deflator reading of 4.9% YoY shows that the inflation surge is not over. With a core PCE deflator of 4.9%, the Taylor Rule suggests that The Fed Funds Target Rate should be at 9.65%, far below its current level of 3.25%. So, IFF The Fed is following any sort of rule, rates should continue to soar.

And if we use headline inflation of 8.30% YoY, the Taylor Rule suggests hiking the target rate to 14.75%.

After yesterday’s dismal Q2 report of -0.6%, I fully anticipate a recession. Ain’t this a kick in the … head.

Fire! European Stock Valuations Lowest Since 2012 On Strong King Dollar, Atlanta Fed GDPNow Q3 Drops To 0.271% (Bostic Calls For 1.25 MORE Rate Increase)

Fire! European stock valuations have dropped to lowest since 2012.

The US Dollar index is soaring (not helping Europe) as The Federal Reserve tightens monetary policy to combat the inflation fire.

Meanwhile, the Atlanta Fed’s GDPNow real-time forecast for Q3 is at least above zero (barely) at 0.271%.

Fed officials continued to hammer home the central bank’s hawkish outlook, with Atlanta President Raphael Bostic saying he backs raising rates by a further 1.25 percentage points by the end of this year. Meanwhile, the People’s Bank of China said it will accelerate usage of targeted loans.

Bond volatility is increasing.

The US Treasury 10-year yield was down -20 basis points yesterday and is up +10 basis points today. This is the Fed’s Rollercoaster effect.

The Dow is down another 400 points today as The Fed’s Sugar Rush is ending. Perhaps The Federal Reserve main building in Washington DC should be renamed “The Sugar Shack.”

In related news, apparently the Biden Administration is going to replace Treasury Secretary Janet Yellen with … anybody else??

Meanwhile I will have a bottle of wine to kill the pain of inflation and Fed tightening.