Investors have been slower than a tank of turtles swimming in molasses when it comes to grasping reality, but they may be getting the message on inflation and the Fed’s fight ahead at last. That said, one should never underestimate the resolve of people to enshrine their wishes as unholy doctrines in order to continue chasing the phantasms of their greed….
Yes, this is for real –the existence of the story, that is, not the cause of events it describes. It was published in America’s newspaper of popular choice — USA Today — and carried in various forms by other publishers. The story is alarmingly titled, “‘Never-ending drought emergency’: Italy’s iconic Venice canals have dried up.“
The Wall Street prophets of profits have moved to a higher level of highs as the opiate smoke circles their brains. They have shifted their dialectic from the US economy making a “soft landing†to a new “no-landing†prediction. By this they are claiming, in all their flash-and-shine prose, that the Fed may be a miracle worker, able to keep on fighting inflation while also levitating the economy. In other words, news of higher inflation made everything a little bit better.
This was one of those days where every news headline that went into The Daily Doom this morning made me say, “Of course it did!†— not in the approving kind of way, but in the way you say it as you roll your eyes because you see that, yes, the bread did land jelly-side-down […]
The big news carried in The Daily Doom today was recession after recession and inflation after inflation. They’re both back (or “back to back”), and boy are they mad! This year’s big predictions on The Great Recession Blog appear to be lining up to start tearing things up this week as a nice little gooey Valentine’s surprise that ain’t yo’ mama’s box o’ chocolates!
Of course, Biden’s State of the Union Speech will include all kinds of bragging about the economy, as every president’s SOTU speech does. So, we’ll ignore all of that and look at the direction the economy is actually headed, using recent metrics in a rapid-fire revelation that looks like this:
Stock investors don’t believe Powell because the Fed lost most of its credibility in recent years by promising it could do quantitative tightening on autopilot in its long-awaited and feared balance-sheet unwind, which crashed stocks back in 2018. Next it slammed the brakes on QT in a Fed faceplant because it had also crushed bank reserves, which the Fed, more than any entity on the earth, is supposed to understand and manage.
Does anyone remember way back to when new jobs came in so bad the report shocked everyone by being far below expectations? Stretch your memory because it was all of three days ago that only 106,000 new jobs were created, well below the 190,000 Dow Jones estimate, and even further below the previous month’s upwardly revised 253,000. Yet, now, they’ve exploded to half a million!
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