Traders dumped stocks in the final hour on Friday, hinting that there actually is a threshold at which bad news begins to matter. For one, Black Rock, arguably the smartest money on the planet, reported a 7% drop in profits. If they can’t cut it, is there any hope for the rest of us? In the Middle East, Iran was doing more than merely rattling its saber: agents of the mullahs boarded and seized a British-flagged tanker in the Strait of Hormuz, escalating the threat to global oil supplies. The U.S. and Iran continue to insist they don’t want war, but no one is offering any guarantees. Worst of all, the Fed was delivering the kind of news we are supposed to sell: a rate cut of 25 basis points is coming in July. Since investors’ earlier exuberance was focused on rumors of a 50-basis-point cut, it’s a wonder the Dow Industrials didn’t fall by 400 points rather than a mere 68.
A Transparent Ponzi
It is predictable that investors, even blinded by greed as they are, will eventually see where the Fed’s transparent Ponzi scheme is taking us. By monetizing even more debt, Powell would purport to cushion the U.S. against the effects of an economic implosion that has been gathering force in China and Europe. All he is accomplishing, in fact, is pumping U.S. stocks full of hot gas, including growing leakage from China and Europe.
The scheme will likely work for a while, assuming one can contrive to view the gratuitous inflation of U.S. stocks and bonds ahead of a global economic slump as somehow working. Although further enabling this fallacy could produce a veneer of benefits for yet another month or two, only a fool could believe the supposed benefits will last. Most foolish of all would be to think Wall Street cannot see this coming and that there is therefore plenty of time to prepare. The Mother of All Bears has already waited far too long to correct the wild financial excesses and economic delusions of this era.
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Even worse than the National Debt/Deficit is the de facto revolt against the Federal Government by New York and California, with other States waiting in the wings.
Sanctuary cities have led to Sanctuary States.
Today they outright conspire to violate Federal immigration laws.
With no apparent response from the Feds other than angry tweets!
The proverbial “Center”, is not holding.
And Chiquita Khrushchev (AOC) and her Squad are staging their own revolt against old school Democrats.
All of this was unthinkable fifty years ago.
Ten of the largest cities in the USA are in the process of leaving Lincoln’s precious Union.
As well as civilized society.
The older you are, the more disturbing this process is to you.
Classic Waterfall decline in progress now!