LIVE! Dollar Falls AGAIN! Crude Tries For A Rebound. The Fed. Is Playing DANGEROUS GAMES. Mannarino
From Greg M
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Mannarino, while I respect your thought process to remain net-long the market...in the short term, the market is due for a swift crash. Yield curves are still inverted and a rate cut would create a "hard landing". The Federal Reserve obviously isn't going to raise rates with risk this high because they would lose control of bond yields. The Federal Reserve has no choice but to keep rates paused for a very long time, until a crisis unfolds. It's not the Federal Reserve that is playing a dangerous game, it's the market that's playing a dangerous game thinking they will cut rates in an instant because the MSM thinks Powell is bluffing. The FED knows that by doing nothing, a crisis will unfold eventually but they won't lose their credibility by intentionally changing monetary policy that will send the economy further downwards. When the crisis manifests by doing nothing, they can prove that it just happened by "accident". The market is reading this completely wrong, and will pay a massive price.
On the grand scale of things, you are absolutely correct, Central Banks are not done inflating. But have people forgotten how much debt was created from the DotCom Bubble, 2008 GFC, and the Pandemic Crisis. Those three instances in the 21st Century expanded the Federal Reserve Balance sheet ten fold, and the market took a massive nose-dive, before coming out even more bullish than the previous time. With the Banking Crisis looming, this gives reason for the Federal Reserve to keep rates paused until the banks start burning down to the ground, and then flip to a rate cut narrative. After this happens, there will be bail-ins, bail-outs, and a tremendous amount of cash to keep the system functioning. As of right now, this bull market holds no support or structure.
I am telling you this because...yes, three to four years down the road, you can tell everyone "look, I told you so". But in the next twelve months-twenty four months, there will be a lot more bagholders who will get suckered into this who can't hold through the heat. Lots of people can't see the larger picture, they are focused on the smaller picture when fear comes around. The smaller picture shows that this market is going through this next phase, before the bigger picture paints a real bull market.
Money is made both ways....most people don't have enough capital to keep adding to the dip.
Dead meat still moving compilation:
https://youtu.be/hjslGKlqCdk?si=qDB3m3cVCjPkBe6K