Markets got it all wrong

Discussion in 'Economics' started by M.W., Jul 28, 2022.

  1. M.W.


    murray t turtle likes this.
  2. Robert Morse

    Robert Morse Sponsor

    I'm happy to be able to purchase 26 week T-bills and get about 3%.
    Rams Fan likes this.
  3. %%
    AMEN/ its a common pattern overshoot on upside/LOL
    I considered a buy on SPY or spxl,UPRO before noon, Fed day/ but saw nothing i wanted long.
    Good up move on spy /SPXL ,SSO, UPRO today................................ on 4 hour charTs
  4. comagnum


    The Fed funds need to be at about twice the amount of inflation ( about 22%) to knock it out & revert prices back to their long term averages. The Fed Powell & is clueless - his printing to infinity caused this.
    Last edited: Jul 28, 2022
  5. wmwmw


    Clueless Fed Watchers never understand how market works.
    comagnum and murray t turtle like this.
  6. M.W.


    Yeah, I would do the same if I was USD based. Unfortunately my broker in Canada does not offer Canadian tbills, only US tbills but that would expose me to significant cross currency risk as Canadian resident.

    I am just not sure how your post relates to the article and post. It was about the market interpreting Powell wrongly.

    @robertbrown, BTW, does your brokerage offer trading in tbills and accept tbills as collateral minus haircut? Or do tbills need to be manually transferred into the account? What do you offer in that regard?

    Last edited: Jul 28, 2022
    murray t turtle likes this.
  7. murray t turtle and M.W. like this.
  8. M.W.


    They have not even begun to shrink the balance sheet which gives me the impression they are still worshipping markets and elites and only notch the Fed funds rate a little to come across as being compliant with the general public's inflation challenges.

    But then I bet setting policy rates and making balance sheet decisions for the economically strongest country in the world with over 330 million consumers is not easy, either.
  9. M.W.


    Lol, how do markets work according to you? Markets are not always rational, does not mean I would catch a falling knife but it means I position and prepare to trade when the market recognizes it got it all wrong. Watch EURUSD overnight, it corrected almost the entire (imo originally wrong) move. The remaining cross currencies corrected the post Fed move between 20 and 50 percent.

    murray t turtle likes this.
  10. M.W.


    It's normal. The ECB did so, too. It makes no sense to signal to markets, and being potentially wrong footed or locking itself into a corner, in rising benchmark rate environments. Signaling works very well, historically, when central banks ease.

    #10     Jul 28, 2022
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