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Fed Pivot Coming? See this tweet from Charlie Gasparino
Posted on 9/30/22 at 10:56 am
Posted on 9/30/22 at 10:56 am
Charlie is a pretty damn legit "inside sources" kind of guy. Not some rando
LINK
quote:
Charles Gasparino
@CGasparino
SCOOP (1/2):
@federalreserve officials getting increasingly worried about "financial stability" as opposed to inflation as higher rates begin to crush bonds, several big investors tell me. Fed growing worried about possible "Lehman Moment" w a 4% FF rate as Bonds and derivatives
(2/2) tied to them crash, given the enormous debt issued in just the past 3 years at super low rates. A Fed watcher told me the UK intervention was not "a one off" and the same systemic risk could happen here, which might cause the Fed to pause. More later on
@FoxBusiness
LINK
This post was edited on 9/30/22 at 10:57 am
Posted on 9/30/22 at 11:24 am to TigerTatorTots
quote:
Fed Pivot Coming?
Mid terms getting close.
It may be time to start buying
Posted on 9/30/22 at 11:30 am to TigerTatorTots
This has been my thought. It’s going to take decades of gradualism to normalize rates, they’re not going to be able to rip the bandaid off on this and fix the system so quickly.
Way too many Americans addicted to spending and debt. That’s what happens when you maintain a bad diet for 12 years of eating sugar (i.e. QE)
Way too many Americans addicted to spending and debt. That’s what happens when you maintain a bad diet for 12 years of eating sugar (i.e. QE)
Posted on 9/30/22 at 11:32 am to Shepherd88
I would expect 70-80% of investors would say no Fed pivot. That it comes Q1 or later.
So an early pivot would surely be the outcome
So an early pivot would surely be the outcome
This post was edited on 9/30/22 at 11:38 am
Posted on 9/30/22 at 11:49 am to TigerTatorTots
It's coming down to "which way do you prefer to be fricked and when?"
Stay the course and bond rates rise enough to force Congress to choose very soon between pet programs or servicing debt?
...or...
Pivot and risk driving inflation up into double-digits (and possibly hyperinflation)?
Stay the course and bond rates rise enough to force Congress to choose very soon between pet programs or servicing debt?
...or...
Pivot and risk driving inflation up into double-digits (and possibly hyperinflation)?
Posted on 9/30/22 at 12:00 pm to Bard
The problem in Britain was the drop in Bond values. The plunge was so sharp, the pension funds began getting margin calls, and those pension funds ( which have much of their assets tied up in ILLIQUID investments like real estate and private equity) were forced to sell off their liquid assets (equities) at a loss .... panicking the markets. The UK govt stepped in and reversed course. They went from an "all-in" QT environment ....to an unlimited QE environment ...overnight
.... a massive shock to the markets. Printing presses subsequently go Brrrrrr .... and the global impact and the shock waves are still reverberating.
What it really says it that global inflation is going to be a lot higher and be around a lot longer than what economists have been previously projecting, and that includes the US.
A similar Bond event is not unlikely for China or the US ... but the impact will be much greater I suspect. Something that bears close observation ....
Interesting tidbit .... Winn Resorts (casino gambling) reported a 91% decline in revenues from Chinese gambling operations ... -91%. What do you suppose that says about the state of the Chinese economy ? .... and what that means for the global economy? .... Pain.
.... a massive shock to the markets. Printing presses subsequently go Brrrrrr .... and the global impact and the shock waves are still reverberating.
What it really says it that global inflation is going to be a lot higher and be around a lot longer than what economists have been previously projecting, and that includes the US.
A similar Bond event is not unlikely for China or the US ... but the impact will be much greater I suspect. Something that bears close observation ....
Interesting tidbit .... Winn Resorts (casino gambling) reported a 91% decline in revenues from Chinese gambling operations ... -91%. What do you suppose that says about the state of the Chinese economy ? .... and what that means for the global economy? .... Pain.
Posted on 9/30/22 at 12:00 pm to Guntoter1
The penultimate bear trap. The market will only run after November if the Democrats remain in control of Congress. If not watch out.
Posted on 9/30/22 at 12:08 pm to TigerTatorTots
What the pundits won’t tell you:
Central banks will have to monetize all the debt they are about to issue under the cover of WWIII. When all else fails, they take ya to war. Endless wars, crises, pandemics, etc. are all excuses to issue debt. Without being able to issue debt, not only do central banks have no power but the system caves in on itself.
Central banks will have to monetize all the debt they are about to issue under the cover of WWIII. When all else fails, they take ya to war. Endless wars, crises, pandemics, etc. are all excuses to issue debt. Without being able to issue debt, not only do central banks have no power but the system caves in on itself.
Posted on 9/30/22 at 12:11 pm to wutangfinancial
quote:
The market will only run after November if the Democrats remain in control of Congress. If not watch out.
Market will tank after midterms regardless of who wins
Posted on 9/30/22 at 12:18 pm to cadillacattack
quote:
The problem in Britain was the drop in Bond values. The plunge was so sharp, the pension funds began getting margin calls, and those pension funds ( which have much of their assets tied up in ILLIQUID investments like real estate and private equity) were forced to sell off their liquid assets (equities) at a loss .
I don’t know what all pensions own in the UK but I know the ones in the US own mostly Alts, Private Equity/RE, Treasuries as well.
Posted on 9/30/22 at 12:28 pm to Guntoter1
quote:
Market will tank after midterms regardless of who wins
This. We might see a bump if the GOP wins, but it won't be much different than any other bump. Durable goods, GDP, Unemployment, Wages, Earnings... they are all going to be going in the wrong direction and every one of those reports will send the market down once again.
Posted on 9/30/22 at 12:31 pm to TigerTatorTots
Pivot to what? Hyperinflation?
Posted on 9/30/22 at 12:42 pm to TigerTatorTots
The Bank of England flip from QT to QE was telling. I could see our Fed doing the same. They lack resolve and they’re getting imperfect information
Posted on 9/30/22 at 12:43 pm to wutangfinancial
quote:
wutangfinancial
You have no credibility here
Posted on 9/30/22 at 12:45 pm to TigerTatorTots
quote:
Fed growing worried about possible "Lehman Moment" w a 4% FF rate as Bonds and derivatives (2/2) tied to them crash
Can someone explain the purpose of said derivatives and who owns them?
Posted on 9/30/22 at 12:48 pm to Strannix
quote:
Strannix
quote:
You have no credibility here
Cue the Spider-Man point meme
Posted on 9/30/22 at 1:05 pm to TigerTatorTots
This is like treating a fricking heroine addict.
Posted on 9/30/22 at 1:07 pm to TigerTatorTots
He is correct when the UK intervened they were on the cusp of a watching a major meltdown so they decided to AIG the Bond Market as opposed to letting it Lehman.
Posted on 9/30/22 at 1:15 pm to cadillacattack
quote:
Interesting tidbit .... Winn Resorts (casino gambling) reported a 91% decline in revenues from Chinese gambling operations ... -91%. What do you suppose that says about the state of the Chinese economy ?
It's been closed dude.
WTF are you spouting?
LINK /
This post was edited on 9/30/22 at 1:16 pm
Posted on 9/30/22 at 1:38 pm to LSUcam7
quote:
Can someone explain the purpose of said derivatives and who owns them?
I have puts on the 20 year strike at 4.25% expires in May 2028. Mine is insurance - so there are those betting against me that could be burned rapidly if the puts hit.
My position give me some protection of rates move upward and pressure longer term bond and stock holdings that would be impacted by rising rates.
This post was edited on 9/30/22 at 1:40 pm
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