Stock Picks September Continued 〽️
With some basic Macro Analysis and "some pain" ahead.
Hey Guys,
Last week “quantitative tightening,” or QT began.
The Fed’s game of fiscal and monetary manipulation included adding about $6 trillion of fake money into the economy. M3 is a measure of the money supply that includes M2 as well as large time deposits, institutional money market funds, short-term repurchase agreements (repo), and larger liquid assets.
The NASAQ is down for the six days in a row (this was originally written last week).
The Fed, remember, had done three rounds of quantitative easing, or QE, from the financial crisis all the way through the anemic post-crisis recovery years until finally ending their bond purchases in late 2014.
This brought their balance sheet up from around $900 billion pre-crisis to $4.5 trillion by October of that year.
Today the U.S. has 11.3 million job openings as of July, 2022.
How is the Fed supposed to engineer an increase in unemployment that could meaningfully reduce inflation?
Core CPI is also being influenced by a housing demand supply-chain breakage leading to higher rents.
The Fed being “behind the curve” leads to much worse than this.
The Bull market of 2009 was more or less fake. A decade of basically manipulated stimulus for which many people actually never recovered from “the great recession”.
It’s my thesis that 2023 could be worse than 2008 in its impact on the decade ahead for for the generations. The outlook of equities could be grim.
The central bank should discuss a 50-basis-point or a 75-basis-point rate hike in September given exceptionally high inflation. Probably the latter.
The energy crisis in Europe and real-estate debt crisis in China will get worse in the next six months.
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