LIVE! EXPECT INCREASING VOLATILITY! Eyes On RISK And "THE ILLUSION" Of Liquidity. Mannarino
From Greg M
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The rhetoric is counter intuitive on this channel. The data suggested that the fall in equity's all of 2022 was because the market was pricing in a recession. Roughly after the markets bottomed in October of 2022, the Federal Reserve halted a recession even though there were two consecutive quarters of negative GDP. From there the markets started rising. First of all, the markets rising since October was because the markets believed that the Federal Reserve did not care about the data...and therefore, the Federal Reserve also helped fuel the bull cycle all of this year by buying it up. The counter intuitive rhetoric is that a rate cut will be bullish for this market. It won't. Because the Federal Reserve did not cut rates last year, after pricing in a recession that was put off. The market has not been pricing in anything based on actual data or anything related to reality. When the Federal Reserve cuts rates, the market will look at the data and get hit with a dose of reality, and see that this won't be a soft landing or even hard landing. This will be a crash landing. The distortions from the truth do keep growing, but the market breathes in and out of cycles. It's been inhaling for too long, ignoring data. I expect a drop in the Nasdaq (in terms of percentage), at least twice the size of the 2007-2008 recession , and in the S&P 500 (in terms of percentage), at least twice the size of the Dot Com Bust...collectively side by side. The data says this is coming, and the data says it will come back to reality when the Federal Reserve cuts rates. There will be a lot of suckers who fell for this, buying here or even a 5% drop. There is no doubt the market will eventually hit new high's, but IMO we are about to witness the largest drop (in percentage) ever...because the fat cats who have made billions always live on the rules that they can make money on the way up. That's not true. When markets fall, they take your money, and then play with their own on the next bull cycle. In my opinion, this time they really want it all.
Take a break Greg and listen to some Roy clark. Awesome guitar player. https://www.youtube.com/watch?v=mH9hy7di3cw