“When it comes to the Federal Reserve and other central banks: There has been no time in history where so much power has been given to a non-elected cadre to dispense edicts that can reward, stifle or punish any business, economy, or the wealth of its citizens, as they see fit, since the time of kings.”-Mark St.Cyr circa 2010
I have been making the above commentary in one form or another nearly as long as I’ve been writing. Its overarching premise was actually the genesis.
Originally I began making commentary under the banner “Making sense of the non-sense” for I fully understood they were actually meddling behind the scenes, as they say. What I just didn’t fully comprehend was by how much, because it all was supposedly something that would “never be allowed.”
Back then the entirety of “erudite” business and financial commentary was anathema to even the idea. And militantly so.
If you dared try and articulate any thoughts, in public, to the contrary? You were immediately deemed and shouted down as some “conspiracy theorist” (or worse) by the entirety of the mainstream business/financial media and its ever-revolving set of fund managers, Ph.Ds, and so-called “think tank” aficionados.
Then in 2010 at what many of us refer to as “Ben Bernanke’s infamous Jackson Hole speech.” The then Chair announced that quantitative easing in one form or another (something I call the “QE4eva” signal) was at the ready should they desire employing it. Hint: They have been employing it ever since, now entering a decade.
The funniest aspect (actually tragic) to all of this has been the contortions many of the above mentioned crowd have done in having to acknowledge what was once berated as “conspiracy theory” has now come to represent “prudent monetary policy” along with “protecting market volatility.”
“Monetizing the debt” is now simply: QE. And the “plunge protection team” is a now such an open secret that it makes front page news to ensure every one knows if and when it may be needed. Hint: “The Call from Cabo.”
What Wall Street, our overall economy, 401K, pension funds and more have morphed into is nothing more than a groveling cohort of willing participants begging (some demanding) for Central Banker largess. For without it – it all falls apart. Period.
The more “easing” of anything that the Fed embarks on doesn’t really “help” the economy as they would like to argue. In actuality, what it does is feed the ever-growing sclerosis of anti-competitive practices employed by those with a favorable ticker symbol. Rewarding its own choice of winners and losers. For front-running central bank largess algorithmic parasitical trading is now the norm.
Another is judgements and fines in the $BILLIONS for unfair, if not illegal business practices are shrugged off with a cavalier attitude as just a cost of doing business mindset.
After-all, if the Fed is going to keep printing, funds are going to keep buying, as the company itself can just borrow even more at nearly zero cost to entice ever-the-more.
It appears “fining” has now become a signal to buy, probably rewarding their own C-suites with even more compensation. Hint: Facebook™, Google™. Who’da thunk it.
So now we have, in many respects, a crucial meeting of the Fed coming this Tuesday and Wednesday. All eyes are on not if, but by how much. For if the Fed dares to think it can get away with any form of not cutting in a “wait and see” type position, it won’t end well.
The “market” has all but priced in not just a cut of rates but rather, at the least, needing a signal that this is not some “one and done” event. The Fed through its myriad of speakers has signaled that they are back on the rate cutting bandwagon. Anything less and the “market” is going to employ its well known two-year-old game into full swing. e.g., It’s going to throw a hissy-fit and start dumping everything – everywhere. So much so it’ll make real diapers search for cover.
This is where we are today. There is nothing else that is driving these markets or anything else. Either the central banks (and The Fed its exemplar) continue doling out its largess in one form or another – or – this entire Potemkin Village, House of Cards, Hall of Mirrors, ________(fill in your own) mirage of what is now called a “market” crumbles.
If there is one aspect to all this unfolding possible turmoil that we now sit at the precipice for resolution one way or another, it is this:
Mr. Powell, with his many renditions since being appointed of his “too cute by half” approach as to demonstrate how he views the President – is now the one sitting smack-dab in the middle of any forthcoming “blame game.”
All by his own hands and words.
© 2019 Mark St.Cyr