Author: Mark St.Cyr

Mark is a globally recognized expert in entrepreneurship, motivation, business, sales and financial markets. He writes from a first hand perspective. His insights can be both cutting edge, or just a cutting through the clutter. Either way they come from first hand knowledge, and experience that is classic Mark. Visit www.MarkStCyr.com "Pragmatic Insights For Today's Business World™"

Big Tech’s Latest IPO Shows It To Be The Pump & Dump Scheme It’s Always Been.

Did you hear the one about the “cabdriver and the rich tourist?” If not, it goes something like this…

A very wealthy looking business person arrives fresh off the airplane and hops in the first available taxi and asks the driver to take them to the financial center of the city. The driver says nothing, hits the button to start the meter, hits the gas and off they go.

They drive around busy city streets for an exorbitant amount of time, dodging and weaving through traffic. The passenger asks “Are you sure this is the way?” multiple times and with each one comes the same response “Absolutely, trust me, I know what I’m doing.” He continues on, undeterred.

Finally the driver pulls up to what appears to be a nondescript building and states, “Here we are, that’ll be (fill in any amount that would make you furious.) The passenger pays the fee and exits when all of the sudden realizes they can see the airport and could probably walk back to it faster than the time it took to get there in this cab.

Furious the passenger screams at the driver behind the rolled up window in a profanity laced tirade and finishes with “…and there isn’t even a name on this building, where the he## am I?!”

The driver rolls down his window about an inch and with a cold straight face says “You said to take you to the ‘financial center of the city,’ which I did just that. For you see, I am the financial center and you were just shown precisely how I make my money. As far as the building is concerned, let me assure you, it is the finest and most well maintained building in this city. I should know, I own it and paid for it via the model you just experienced. If you want to go to another ‘financial center,’ such as those containing banks and more? That’ll cost you another fare. Besides, where did you think I or anyone else would take you if you didn’t give me a specific location? Are you not a professional traveler?”

And so is the current story of IPO’s and the so-called “professional investment community.” i.e., If you’re dumb enough to buy in to “We’ll maybe make money, someday,” well your “professional” status allows for them to take your money, legally. Even if the entire thing is basically nothing more than what appears to be a legal scam.

And yes: legal scam. Sure, it’s only my opinion, but I’ve stated such from the beginning, and with every iteration, I’ve been proved more right than wrong. Hint: see Snapchat™ for clues.)

I invented the above scenario to coincide with Friday’s latest IPO debut concerning the ride/cab hailing service known as Lyft™. The demand for this latest “tech wonder” was supposedly “oversubscribed.” It appears (for remember this is all my own conjecture) that the oversubscribed part was just how many could dump-out to the highest bag-holder bidder.

But speed was of the essence, because as the day went on – the bidders were fewer and fewer.

The only thing that appears to have allowed the final bid to be as high as it was – was – the trading ended almost as fast as it started.

Between the hours of 12:00ish ET and the markets close just four hours later, all the hyped up “21% pop” those initial “getting in first!” buyers morphed into 10% bag-holding losses, again, from the first trade and for nearly the entire four hours it seemed as if Lyft couldn’t lift itself off the selling floor. For it went in nearly a straight line down until the mercy of the closing bell was sounded.

“If every picture tells a story…” as crooned by Rod Stewart, let’s use one as they say in Silicon Valley to show the story of this latest IPO darling. To wit:

(Chart Source)

The above is a chart of Lyft from its opening trade to the close of the day represented by one hour bars/candles. (it shows five because of the few minute start right before Noon)

The real takeaway with the above is, as I said prior “…it went in nearly a straight line down until the mercy of the closing bell was sounded.” For as you can clearly see, there was no “off the lows” respite into the end.

Could it surge into oblivion on Monday? Sure, but the above does not sport a very promising start for what has been deemed the “IPO to show that IPO’s are back!” As a matter of fact, it may show that they are as dead-and-buried as their business model will become once any remaining investor cash is burned through.

This farce of stating a company is worth $Billions upon $Billions when it couldn’t even purchase a ride across the street using its own service via its net profits (for there are none and maybe never will, think about that) is an abomination to everything once considered business, never-mind business ethics.

This is not capitalism. This is pump-and-dump chicanery wrapped around a legal business construct that only the most naive and stupid of “professionals” could ever endorse. This is what central bank interventionism has wrought. i.e., the legal ability for V.C. snake-oil-producers to sell their scheme to an unsuspecting public via their “professional investment managers.” You know, as to make sure one has some “growth” companies in their portfolios.

It’s disgusting. Period, full stop. And it’s going to end, but probably not before it’s true tale of devastation gets revealed.

You see the issue with all of the above is that reference I continue to make as “professional” is precisely the term used in court as to show the people “buying in” were of the sophisticated type. e.g., they have their “shingles” as the saying goes.

This way when it all goes “poof” they can say to the judge and jury, “These people claiming losses from their investment are professionals by trade and understand inherently any and all of the underlying risks. And may I remind them, those risks, as in ‘we openly stated we may never make any money’ were posted in all of our paperwork, so we can hardly be of any blame for them losing their investment.”

And there is where it will be shown that that is entirely correct. The problem?

Those “professionals” more often than not are only professional at one thing: Investing your money, Or worse, for your pension fund, you know…

Because you have to have exposure to “growth.” Regardless if it’ll be around at all in said future – or not.

© 2019 Mark St.Cyr

Just Sayin’

On the show the other day I received a few notes on if I may have been a little harsh on the latest Apple™ rollout and presentation earlier this week. For those that might have thought the same, I was just sent the following from a colleague that pretty much puts any “over criticism” speculation to rest. Below is a side by side from a 2011 presentation to today.

Clicking on the image will bring you to YouTube for viewing. To wit:

(Image Source: screen capture YouTube™

And as they like to say during these presentations, “Oh, just one more thing…”

Is it me? Or did anyone else seem perplexed that in what should be one of the greatest stages for both Apple innovation and more. e.g., “The Steve Jobs Theater” that the presenters were all curiously tethered via their cables?

I mean: nothing displays product presentation “brilliance” more than showing your devices are superior in both wireless technology and battery life in every way – as to then display every presenter tethered via a cable and restricted for movement within the very building, which for all intents and purposes, should be the very place where everything should work flawlessly!!

I think the latest tremors in California don’t have anything to do with Mother Nature, and everything to do with that theater’s namesake spinning in his you know what.

Then again, maybe it’s just me.

© 2019 Mark St.Cyr

Why This Time – It’s Different

The real problem with most tropes is they contain their future warnings without changing a single word. The problem lies within where most never consider the flip-side, as in: what made you believe in the magic of “it’s different this time” rationale – the exact opposite is what will tear that once coveted narrative apart for explaining the former irrational.

In other words: once the magic of “it’s different this time” is no longer believed? That’s precisely what you’ll hear used to explain why the former is no longer relevant. And on Friday of last week the “markets” seemed to make very clear that it now is using the trope in it’s flipped position.

And that has the potential for some very troubling manifestations.

The Federal Reserve’s complete and utter capitulation of not only ending the balance sheet run-off (QT) as soon as September, along with signalling no further rate hikes in 2019 and the possibility for only one in all of 2020, was more than just absolutely stunning. It also proved to be a complete, self-inflicted repudiation of their entire credibility for both gauging the economy, as well as their adulteration of it.

To be clear: The Fed admitted via dint of their policy actions that – they are trapped – and can not get out. And now everyone, repeat, everyone now knows it.

I have been stating ad nauseam that once the process of QT came to light and the “markets” had to deal with the reality of less and less “free money” that they would falter. And: they have done precisely that with near Swiss-watch precision, as well as the size and scope of the accompanying sell-offs.

The term “autopilot” has now been jettisoned for a new, different reality, which is: hard brake, full stop and mothball. I’ll just add that belief in the Fed’s credibility has now joined a similar sequence. Talk about, “it’s different this time.”

As stunning as the reversal for both the Fed’s prior stance and reading of the economy was. What was different was the reaction to it. i.e., the “markets” propensity seems to be sell rather, than buy.

That is very, very, very (did I say very?) different reaction than past episodes.

Sure there’s been the rally since Christmas Eve when a phone call from Cabo was needed to assure the world that the banks were “well funded and liquid” via a vacationing Treasury Secretary. But that rally has been for all intents and purposes best described as “unloved.” The reason?

The accompanying volume has been pathetic. The Fed’s new stance should have been the wind beneath the “markets” wings to soar ever higher, proving all the BTFD (buy the F’n dip) genius correct. However, that has not materialized. At least not yet, to be fair.

Although, to prove just how “unloved” the term fits: when the Fed announced it’s plans to go from “Hawks-R-U.S.” into “Super-Doves” the “markets” typical reaction was not only absent, but rather, it actually closed lower.

Yet, on the following day, the “markets” surged. But why? Easy…

The massive buy-back programs led by Apple™ and others to buy before the blackout period of earnings allowed for the HFT (high frequency trading) front-running parasites to gorge, and gorge some-more, pulling the indexes up.

But a funny thing happened the very next day: They sold off just as hard, and just as fast, as they went up. Can you say, “It’s different this time?”

Apple had a near 4% gain the prior day – to watch it give back over half the very next. In other words (conjecture, of course) as long as Apple was buying, so too were the machines, and more than likely, other central banks. Or said differently: If Apple isn’t fueling the buying opportunity? It appears others are taking that same opportunity – to sell.

Cook-and-crew had better take that signalling to heart, because if there’s even the slightest “glitch” in the upcoming earnings release? Don’t say the “market” didn’t warn you. i.e., “It’s different this time” also applies to cause-celeb CEO’s, as well as sales numbers the “markets” deem appropriate.

“But wait, there’s more!” as they say on late-night TV. For “it’s different this time” has a myriad of ancillary side-effects that now must also be taken into consideration.

Again as I warned as far back as August of 2017, Mr. Cook’s decision for involving both Apple the company, its employees, as well as its customers into supporting his own preferred political entities, both publicly and vociferously, that it would come back to bite.

I believe that “bite” has now arrived.

It is now unfolding in a very public and disturbing manner that the Southern Poverty Law Center™ is imploding with disgraced leaders resigning and more – and – is being shown to be one giant scam of an charitable entity.

So much for Mr. Cook’s sense of judgement when it comes to the holier-than-thou CEO attitude, yes?

Here’s what I said back in August of 2017. To wit:

The reason why I say this comes from none other than the latest actions for political optics via Tim Cook, CEO of Apple™.

It was one thing to resign from the council, but Mr. Cook took it to 11 on the political scale when he announced not only his reasoning, but his declaration that not only was he donating via Apple $1million a piece to two civil rights organizations, but also – will match 2-for-1 any additional donations made via employees as an incentive to also donate.

The issue here is two-fold. 1) He’s doing this via company coffers. 2) What happens to those who don’t feel the same as Mr. Cook and don’t donate, for whatever their reasoning? Is there now implied peer pressure on the job? Will there be lists as to who did, and who didn’t? Do share holders agree or feel the same way about this political decree?

The list goes on, and on. And they’re fair questions because Mr. Cook is arbitrarily applying Apple’s stamp to his political views. That’s not business in my book. That’s pure politics and does not belong.

From my article: “Did CEO Grandstanding Further Seal The Market’s Fate”

By the looks of what took place in the price action last week for Apple-the-stock? Let’s just say – Mr. Cook had better be showing a far more focused view to Apple than any other cause-celeb inklings. If not? Stock holders just may vote to give all the time he wants or needs in the not so distant future.

Remember: it’s different this time.

How different? Well, let’s just say the anticipated Lyft™ IPO is getting ready to hit these “markets.”

All I’ll say is: Good luck with that. Remember?

It’s different this time.

© 2019 Mark St.Cyr

F.T.W.S.I.J.D.G.I.G.T.

(For those who say I just don’t get it…get this)

Well… that didn’t take long. As I said in my article yesterday morning. To wit:

The problem? It looks like the Fed just proved the President correct.

Can you say “Uh Oh?”

The real issue now facing the Federal Reserve is not only may they have just crushed any remaining credibility with their complete and utter reversal of monetary policy going forward. But, they may have done it leaving one of the most unpleasant aftertaste they’ve ever considered.

From my article: “The Fed’s Real Unintended Consequence Problem”

The result? Here’s two screen shots. The first is on Drudge™ this morning to show it’s placement, and that placement is secondary only to being the front page headline. i.e., probably the most important spot to be on Drudge eclipsed only by being the center headline and story, I have it circled. To wit:


(Screenshot Drudge Report™)

Here’s the accompanying story via the Associated Press™. It is a screenshot and I have annotated the important, again, to wit:

(Screenshot AP™ article)

Can you say “Uh Oh?”

But then again, what do I know.

© 2019 Mark St.Cyr

Footnote: These “FTWSIJDGIGT” articles came into being when many of the topics I had opined on over the years were being openly criticized for “having no clue”. Yet, over the years these insights came back around showing maybe I knew a little bit more than some were giving me credit for. It was my way of tongue-in-cheek as to not use the old “I told you so” analogy. I’m saying this purely for the benefit of those who may be new or reading here for the first time (and there are a great many of you and thank you too all). I never wanted or want to seem like I’m doing the “Nah, nah, nah, nah, nah” type of response to my detractors. I’d rather let the chips fall – good or bad – and let readers decide the credibility of either side. Occasionally however, there are, and have been times they do need to be pointed out which is why these now have taken on a life of their own. (i.e., something of significance per se that may have a direct impact on one’s business etc., etc.) And readers, colleagues, and others have requested their continuance.

The Fed’s Real Unintended Consequence Problem

The problem? It looks like the Fed just proved the President correct.

Can you say “Uh Oh?”

The real issue now facing the Federal Reserve is not only may they have just crushed any remaining credibility with their complete and utter reversal of monetary policy going forward. But, they may have done it leaving one of the most unpleasant aftertaste they’ve ever considered.

Regardless of what side of the political aisle one stands, if the “markets” falter or the economy tanks – it will be they that will be blamed, with non-other than the President having the evidence to both point the finger and tweet the charge.

Why? Both the “markets” as well as GDP began falling at the same time as they pursued an aggressive schedule of both raising interest rates, as well as shrinking the balance sheet. Something the President railed against to the sheer publicly visible repudiation through non-answers and verbal queues via Mr. Powell during conferences and interviews.

Again, regardless of what side of the political aisle one sits, the complete reversal, and then some, of what the Fed delivered yesterday in comparison to what they were proposing and promoting just two meetings ago, along with their articulated defenses of how and why they were able to do it, is nothing less than astonishing. Period – full stop.

It now appears via their own actions that for as much as they were dissing the President – they proved by their own actions yesterday that it was he that was correct. i.e., “They’re hurting all my good work!”

Again, doesn’t matter what side of the political aisle one stands – those are the facts as they stand. Whether right or wrong that’s the way it can now be spun politically. And I’ll bet dollars-to-doughnuts that’s exactly what you’ll begin to see happen should these “markets” and economy begin faltering.

Think about it.

© 2019 Mark St.Cyr

The Doubt Has Been Removed

The Federal Reserve via its own actions has now laid to rest any allusion that it was “an independent body.”

It has now made manifest via its own dictates, as others have declared, to be nothing more than “the market’s b*tch.”

What an abomination.

The only thing now is that the Fed had better hope and pray it’s enough. For if the “magic” is questioned because of the psychological rationalization that will surely follow such as “Just how bad is everything for them to be so concerned?” Let me just remind you of the term I’ve been stating all week…

Buckle up!

© 2019 Mark St.Cyr

An Update To: What I’m Looking At…

A few weeks back I showed the following chart of what I was currently watching. Here it is again. To wit:

I’ve had a few inquiries concerning if my original thoughts had changed in light of the latest “market” machinations. My response was: no.

However, with that said, I thought it was only fitting to put up an updated version for those that may want to know why, as I had explained to them. Here is that updated version as of this morning before the U.S. markets open. Again, to wit:

(Chart Source)

Basically nothing has really changed in what I was watching from a technical perspective other than, the pattern has developed displaying a few more details such as time and what is now shown to be a “fake out” styled sell off.

So, now including that “fake out” dip, I’ve just moved a few lines to encompass what is now a larger pattern. But the implications to my eye appear the same as before.

Just to reiterate, that shaded box at the upper extreme is at the same levels as the prior observation weeks ago. Nothing has changed except for the fact that we are finally knocking on that door.

Can we go higher? Sure can. Actually, we can go much higher via a technical view such as to make new “never before seen in the history of mankind new highs.” Yes, the above certainly supports that appraisal. However…

It’s the failure of doing so that has the real implications for the “markets.” And that is the reason why I’m still watching how this all plays out this week. For this week – may be one for the history books.

Just which story as in, good, or bad, is now what needs to be shown.

As always, we shall see.

© 2019 Mark St.Cyr

“To Be, Or Not To Be…?” The Fed’s Upcoming Hamlet Moment

To be, or not to be, that is the question:
Whether ’tis nobler in the mind to suffer
the slings and arrows of outrageous fortune,
or to take arms against a sea of troubles,
and by opposing end them: to die, to sleep
no more; and by a sleep, to say we end
the heart-ache, and the thousand natural shocks…

Prince Hamlet in “Hamlet” Act 3, Scene 1

On Wednesday of this week the Federal Reserve will conclude its latest conclave and announce to a “market” with bated breath precisely what it is. i.e., Is it the market’s b*tch, or not? (Not my choice of moniker, that’s how much of Wall Street now openly defines it.)

This is the only question the “market” wants answered, and it wants it answered via deeds – not words.

The scene from Hamlet aptly fits what should be taking place during this upcoming FOMC (Federal Open Market Committee) meeting, for this is both the time and place where the usual mealy mouthed “Fed speak” just won’t cut it. In other words: all words and examples used to explain the current policy and signalling had better include a plethora of past tense verbs such as “paused” or “halted” and so forth. It must be one thing, or the other.

Anything approaching terms like “the future” as in “We will evaluate as we go along and come up with something at future meetings to possibly conclude ending something by end of year blah, blah, blah…” is not going to work this time. The Fed is now in that “to be, or not…” moment. There is no middle ground this time. Period.

The issue now confronting not only the entire Federal Reserve, but rather, its Chair Jerome Powell directly, is that it is they that have allowed (and also reinforced) the current delusion that the Fed has “paused” anything.

I must repeat for the billionth time: the Fed has not halted anything. Nothing as in zip, zero, nada.

January’s non-event for any interest rate move was baked into the “markets” long ago. A January raise was never anticipated or thought credible. The only reason why it needed to be adjusted for odds in possibility terms was because Mr. Powell back in 2018 announced there would be a presser after every meeting going forward in 2019. i.e., an adjustment into the calculation models for a Jan. hike went from, let’s say, .01% probability to maybe .5% That’s about it.

However, after the December debacle both the mainstream business/financial media, along with the willing chorus at the Fed, made it appear as if there was some implied 50 fold probability that there would be a hike in January. And when the Fed didn’t move? That now, in some way constituted some mythical verification that the Fed had indeed “paused.”

Again, January was never a serious consideration via Wall Street even as far back as early 2018.

But today (or should I say Wednesday) will be a far different matter for what the definition of “pause” truly means. For there has been one thing that has not been paused. And it’s the only thing the “market” cares about. e.g., The Balance Sheet Roll Off Process (QT)

Not only has the QT process not been paused – it’s been running on “autopilot” -and- running at light-speed!

Since January every business/financial media outlet with their assortment next-in rotation fund managers, Ivy League Ph.D economists, think-tank aficionados, buzzer-bangers and more has built this canard that the Fed has “paused.” And because of this so-called “pause” the Fed has made it abundantly clear that it “has the market’s back” so buy, buy, buy! After-all, as the signalling goes, “Just look at these markets!”

I say: Sure, but, what happens when the “market” has to deal with the reality of the moment on Wednesday? Why? Hint: there has been no pause. Period.

To reiterate, I have been stating this warning since January when this idea of “pausing” or “capitulating” was first being presented as fact by all those mentioned earlier. As I said way back then, to wit:

As I’ve stated ad nauseam at every post meeting since the “autopilot” debacle there is, and will continue to be, $50Billion less per month for Wall Street to play with. Again: every – single – month.

Since there has been no declaration via the Chair that there has been any alteration to the process. And even reaffirmed that it was still going on as advertised, where the committee itself agreed and voted that it should continue on unabated means, that from now until March, almost $200Billion will be removed (generalization for example math, but you get the point) or allowed to be rolled-off until Wall Street has another glimpse into what happens next.

And “next” just might be another $100Billion (e.g., April) till the next meeting. Think about that, again very carefully.

“Did he or didn’t he?” Jan. 2019

Again, for this point can not be made forcefully enough, as I have warned ad nauseam: there has been no “pause” of the balance sheet.

As a matter of fact the “autopilot” sequence for the month of February was so that it actually exceeded the $50 Billion quota by some 25+$Billion! Meaning: the Fed needed to reinvest the overage as to stay true to the original plans of “autopilot.” The “markets” received this confirmation just 10 days ago.

Now the “markets” are entering the “black out” period for what shows to have been the only true other driver of recent “market” moves alongside of the Quad-witching expiry process. e.g., the corporate buy-back window.

Hint: there goes anything left of the already pathetic volume measurements, no?

So now you have February confirmed for $50Billion with March about to confirm another. If nothing is “paused” Wednesday, as I iterated prior, by April’s meeting one would need to conclude that another $100Billion would have been pulled. The “markets” are already running on fumes and I feel can’t wait another month to “see.” The Fed needs to deliver what the “markets” are anticipating in toto on Wednesday. No if’s, and’s, but’s or maybe’s will do. Again, period.

How important is what Mr. Powell declares during Wednesday’s presser truly? Well, sticking with the Shakespeare theme, let’s just say…

Anything inclining that there may be a “considering,” or “looking at doing,” and so-on and so-forth as in future tense, as opposed to past, will be seen as having the same superstitious curse or effect of saying the word “Macbeth” in a theater. i.e., will cause a disaster.

All I’ll say is: Buckle up!

© 2019 Mark St.Cyr


We Are At The Beginning Of The End For Super-Hero Central Banking Invincibility

When it comes to super-heroes there is only one thing that matters: either you have the ability to save the world and crush all comers via some extraordinary superpower. Or, everyone must believe you do and not challenge it.

Yet, as we all know, there comes a time when bluster just won’t cut it. As any good comic series has shown – there’s always some circumstance (or villain) ready and willing to put all claims to the test.

Today’s super-heroes are falling faster than their box-office ratings. Now it appears the once unchallenged superpowers of central bankers has now entered this same universe. And that’s a very real problem, for all of us.

Last week the once unquestioned power of Mario Draghi (aka “Super Mario”) president of the European Central Bank (ECB) with his unwavering declaration to supply “whatever it takes, and it will be enough” launched another barrage of shock-and-awe styled stimulus upon the European economy. The shock-and-awe description should have fit since this was a complete reversal from the track the ECB said it was following. The result?

It would probably be more befitting that the shock-and-awe reaction was not displayed via the European markets rather, it would probably better describe Super Mario’s reaction. In other words – nobody was buying it, literally. And the markets sold off, and kept selling.

This is the antithesis for the once knee jerk reaction (e.g., vaulting higher) the markets would display in times past. It appears releasing another round of “whatever it takes” of monetary easing, after just trimming said policy, makes others now question everything. i.e., Sounds great, but I’ll take my money now, thanks.

What’s happening in Europe is not an isolated event. It’s happening across the globe to central bakers everywhere.

The Bank of Japan’s governor Haruhiko Kuroda did similar in December where he signaled the banks readiness to ramp up stimulus if needed. The result? See above for clues.

In China the same. Over the past weeks the PBoC has released almost as many differing rounds of policy interjections (e.g., RRR cuts, record setting direct money interjections, etc., etc.) as they have spinning plates. This is all under the guise of “prudent and neutral.”

It sure appears to any observer this has been more akin to, “We’re willing to throw everything including the kitchen sink and then some!”

Again, the result? Once again, see above for clues.

The interesting thing, as always, is if you look at any chart they all follow what can only be described as the ultimate superhero of central banks headed by the seemingly mild mannered Chair of the Federal Reserve, Jerome Powell.

So far his super powers have been put to the test twice.

In February and December of 2018 the “markets” suffered from an all out assault to their once unquestioned cloak of invincibility provided by quantitative easing (QE) and zero bound interest rates, enabling those with no-clue to BTFD’s (buy the f’n dips) with pure, unadulterated impunity.

Then, suddenly (Feb and Dec) watching BTFD genius became akin to watching people doing stupid things with horrific consequences on YouTube™. i.e., “Watch me, I can fly!”

After each of these incidents Mr. Powell’s response (or maybe Super Jerome?) has been nothing more than inclinations that he will do something. I must repeat this, even if it is for the billionth time:

As of this writing the Federal Reserve has not paused anything. The balance sheet has continued to be allowed to run on full “autopilot” and the non-raising of interest rates at the January meeting was already a well considered probability going back as far as September, if not earlier.

Remember: it was Mr. Powell’s decision to have a press conference after every meeting beginning in 2019 that made the odds for a rate increase at January meeting, for it now had to be considered “live.” That’s how confident the Fed was in its projections just a few months ago. Don’t let that point just go by. Ponder it vigilantly for real perspective.

In other words, “the signal” was that rates could now be raised at any meeting. But in reality markets never priced in a January raise to begin with. The “December Debacle” only solidified the issue.

His response (Super Jerome), so far, has only been words. e.g., “pause” as in we will, may, might, can, etc., etc. There has not been anything said like “did”, “have”, or any other past tense descriptor.

I have a suspicious feeling that’s not going to do it for the third.

And when is the third? Hint March 19/20. And here’s where the balance of the financial universe can suddenly feel itself thrown into free-fall that’s more like being sucked into a black hole than just some form of dark days reference.

As I have warned ad nauseam there has been no “pause” of the balance sheet. As a matter of fact, the “autopilot” sequence for the month of February was so that it exceeded the $50 Billion quota and needed to reinvest the overage as to stay true to the original plans set forth by then Chair Janet Yellen in 2017. And the “markets” just received confirmation of what I’ve been warning about this past Thursday.

For those who believed the incessant prognostications via the mainstream financial/business media that the Fed had indeed capitulated and paused, I can only sum it up with the one word we used to say back in my home town: “Su-prize!”

So much for the truth in the power of “pause,” no? And that’s where the real issue now lies.

The “pause” induced rally since the “December Debacle” has been historical in may ways. First: It’s been the most powerful since 1987. The flip side? To remember the historical fact of 1987, let me use this one – “Black Monday.”

Will history repeat? Who knows? But more importantly is this – will there be any rhyming? For that can have just as bad, if not worse consequences because of where we currently stand.

“Where do we currently stand?” you ask. Great question, for this is where the sum for perspective matters, maybe more than the underlying issues when taken individually.

Everything that was suppose to be going right is suddenly going wrong.

GDP seems to be not as strong as first thought, interest rates are cramping the housing markets globally, the latest employment report was a mess, trade wars are heating up everywhere, not subsiding, U.S. trade deals are seen to be collapsing into inertia, nuclear powers are once again shooting across each others borders (e.g., India – Pakistan)

Is there more? Sure is…

Russia is sabre rattling, China is also. The EU and UK with Brexit seems to be in a slow motion car wreck of a situation. German banks are floundering. Italy, Spain, Greece and others are joining into the fray for political condemnation in solidarity with the “Yellow Vest” movement in France.

Ambassadors are being called back home in alarming rates globally. N. Korea seems to have both began underground testing, as well as reconstituting idled nuclear facilities. Did I forget anything? Oh, yeah, there’s Venezuela, but I’m sure that’s it, right? Hint: It ain’t. Need I say Taiwan? And yes, there’s even more but I’ll stop here for brevity’s sake.

So now here rests the balance of the financial world, global markets, national economies and Geo-political salvation as it awaits the arrival of the only person presumably endowed with the true superpowers to arrest the collapsing universe created via central banks everywhere. e.g., Chair Jerome Powell and his protégés constituting the FOMC League of Monetary Justice.

So now that the “markets” have been put on notice that anything resembling the term “pause” has not been implemented – and – that “autopilot” has not only continued unabated – it’s been running at peak velocity. All while the above has manifested itself within the last few weeks, “what could possibly go wrong,” is all I ask?

Hint: Rhymes with “too little – too late.”

After all, isn’t that what happened in the last superhero movie known as “Infinity Wars?” It seems that maybe the once unquestioned powers of central bankers in their “QE to infinity and beyond” powers could also meet the same fate. Why? Because one of the truly critical requisites that solidifies a superhero’s power is in power – that others believe in it.

Today it seems the once unquestionable power of the “Superheroes of the Central Banking Justice League” is meeting a force that may be far greater than one they ever considered, let alone planned for. And it is this…

No one unquestioningly believes in their once unquestioned powers anymore.

We’ll know how this all concludes in about 8 trading days.

“Buckle up” is all I can say.

© 2019 Mark St.Cyr

Just Doing The Jobs American Adults Won’t Do

I don’t do “politics” as most others. As I stress ad nauseam, I only entertain the topic when it directly effects business, as in, once laws are passed or proposed its what we now have to contend with, again, as in regulations, taxes and more. i.e., noncompliance is not an option.

Do I need to remind you of something called the IRS?

As of late there’s been a lot about the topic of socialism and more. Worse, there’s actually been socialistic ideas and principles looking for sponsorship and actual votes currently within congress. Again, need I remind you of “The Green New Deal” and its fervent new face for support known as “AOC?”

Here’s the real issue: businesses of all stripes (especially mom & pop styled) have been getting hit with one new regulation after another for taxes, property regulations and other compliance styled edicts that have been crushing the once backbone of most American down-towns, inner cities and yes, even in the suburbs. (Just look in SF at the oldest fortune cookie business now basically counting the days to oblivion.)

Just when you think it can’t get any worse – it seems to do just that. To wit:

“Democrats Vote To Give Illegal Immigrants The Right To Vote”

Here’s another, again, to wit:

“Rep. Ayanna Pressley proposes lowering voting age to 16, claims maturity not an issue”

So here we are with members of congress pushing for illegals to vote which for everyone that is allowed (should it ever pass) could by dint nullify an American citizen’s cast vote – and – if there’s one more “illegal” than actual citizen voting, that election result will go to whatever the illegal voter wanted or was in favor of, whether its good, bad or indifferent.

So here’s why businesses need to understand what’s happening a little more clearly than trying to evade the subject in a just “keeping my head down because I’m busy running a business” mentality.

Don’t like the idea (or better yet can’t afford it) of raising the minimum wage to $15.00? Don’t worry, if what’s being proposed goes through $15 will look cheap. You better hope you don’t see “raise the wage to $25, now!” legislation for these “new voters” to vote on come even sooner.

Don’t like your current sales tax being used as a device to pay for everything making you noncompetitive with other regions or locales? (Hello Pennsylvania?) You’ll be thanking your lucky stars if that’s all you have to worry about and not some newfangled version of said “soda tax” to pay for anything they may now deem “owed.”

Let’s see – just what would a 16 year old think they are owed? Can you name any? Or, is there enough digital ink to list them all may be a better question?

Think about this all very carefully. Why?

Because the sound you just heard was a great-big-ole-bullseye being stapled onto your business checkbook. After all, who else do you think is going to be told to pick up the tab?

Remember, I’m not implying anything. The above is now the political facts of the day. I implied (as in warned) a while ago that stuff like this may be forthcoming if businesses kept giving all of it a blind eye.

But now its here, just like I implied when no one would listen.

Do you hear me now?

© 2019 Mark St.Cyr