An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
People who live or die by the stock markets seem blind to the underlying problems that are caused by inequality, which has risen dramatically due to control of the economy by small oligarchy of corporations and wealthy capitalists for which speculation is their livelihood. As long as stock markets dominate the economy it will continue to be unstable. Greed is not good!
This is not 2008, like Mike said. For the most part we've had an orderly selloff, which in part has panic written over it, but most likely has been catalyzed by liquidity narrowing (thanks to the Fed) coupled with margin calls writ large.
IMHO this is a predictable correction given the Fed's actions in removing what was left of the punch bowl along with, IMO, nonsensical tightening. The risk off trade makes sense and the subsequent selling isn't as irrational as some might think. This bleeding will hopefully stop when Yellen most certainly refuses to raise another 25 basis points at the next Fed meeting. At that point you're likely to get a rip your face off rally. And hopefully that rally won't be sold in to like we've seen during every bounce this calendar year.
And just as an aside maybe price discovery absent the Fed inspired animal spirit infusion should rationally bring us down 20-30 percent from the highs. Maybe.
Is what happened 8 years ago - A stock market plunge that cost the incumbent party the White House - being replicated by hedge funds financed by deep-pocketed conservatives?
People who live or die by the stock markets seem blind to the underlying problems that are caused by inequality, which has risen dramatically due to control of the economy by small oligarchy of corporations and wealthy capitalists for which speculation is their livelihood. As long as stock markets dominate the economy it will continue to be unstable. Greed is not good!
ReplyDeleteThis is not 2008, like Mike said. For the most part we've had an orderly selloff, which in part has panic written over it, but most likely has been catalyzed by liquidity narrowing (thanks to the Fed) coupled with margin calls writ large.
ReplyDeleteIMHO this is a predictable correction given the Fed's actions in removing what was left of the punch bowl along with, IMO, nonsensical tightening. The risk off trade makes sense and the subsequent selling isn't as irrational as some might think. This bleeding will hopefully stop when Yellen most certainly refuses to raise another 25 basis points at the next Fed meeting. At that point you're likely to get a rip your face off rally. And hopefully that rally won't be sold in to like we've seen during every bounce this calendar year.
And just as an aside maybe price discovery absent the Fed inspired animal spirit infusion should rationally bring us down 20-30 percent from the highs. Maybe.
Is what happened 8 years ago - A stock market plunge that cost the incumbent party the White House - being replicated by hedge funds financed by deep-pocketed conservatives?
ReplyDelete(How’s that for a Movie of The Week)