Postponing the pain only makes the pain worse sometime down the road. There could be tremendous human suffering and social cost.
I guess that they are probably prepared for the eventuality. Are you?
Many FOMC board member have advanced degrees in economics, which is, in my view, the fusion of the science of statistics and the art of hypnosis. ;--))
Fed knew that this current "recovery" is not normal one, and is largely driven by the asset appreciation, such that once the asset appreciation stops or reverses, the whole scheme will collapse.
While Fed keeps promising the market participants that they will maintain the $4+ trillion balancesheet, they tried to give the market an impression of withdrawing monetary stimulus by tapering the bond buying programs. Why?
Because Federal Reserve tried to convince the market that this "recovery" is a real one and will eventually lead to 3-4% sustainable GDP growth. Such psychological manipulation is necessary because if most of the market participants had expected the growth to falter once the asset appreciation stops, then they will act in way to fulfill that rational expectation. In essence, Fed tried to make you think about reality in a way which is not true so that it would hopefully reduce the chance for the unwanted reality to be true. ;-))))))
The multiplier effect works. We can argue about the size of the multiplier effect, but not on its validity.
It is the result of higher financialized and highly leveraged economic system.
Some people have probably loaded up massive short position during the past year. Now they demand the harvest.
I am for the reform because I believe that everybody already living here should be treated equally, at least according to the law.
Economically, it is a good thing in the near term.
In 2008 crisis, some people made hundreds of billions of profit. They might have already loaded up on their massive short positions once again.
Expect 10+% daily drop in stock indices.
The -2.9% is largely due to ultra-cold weather in US. Maybe it is a way for God to remind us that we are still the primitive prime-mate despite tens thousands of years of evolution.
If you ask me whether US economy is set up to a big drop, then the answer is yes. The timing is uncertain, but the outcome is rest assured.
because the US economy needs more growth driver, such as extra spending brought out by legalization of undocumented immigrants.
There are estimated 16-20 million undocumented immigrant in US. Legalizing their status will enable them to apply for Federal and State benefits -- such as social security, food stamp, healthcare subsidy, housing subsidy, and educational assistance, etc. They will have huge boost to the GDP growth in the short-term no matter of whether they work or not.
For example, let us say none of the16 million people work and hence receive on average $10,000 through various assistance/welfare programs. That would amount to $160 billion annual cost to the budget, and the debt load.
However, due to the multiplier effect, assuming all the $160 billion were spent in US, then the total boost could be $160 x multiplier = $160 x 5 = $800 billion. That would be solid 5% addition to the growth.
This scheme can last as long as people all over the world would still accept US Dollar as the valid global reserve currency.
If and when the market indeed crashes, expect a 10+% day and 20+% plus over a week.
It will be ugly, because deflation is a very contagious disease.
I used to be a computer specialist -- the emails cannot just disappear because they have been backed up on other live server and also on tapes. They will be there even if the recipients have deleted all.
Anything you put into the Internet will be there forever.
It is funny to see that the Wall Street interpret Fed's policy decision in any way they want. The fact is that once the stock market stop ascending, the GDP growth will approach zero or negative.
So for now, Wall Street takes whatever Fed says and spin it to be the signal of longing stocks. ;-))))) Monkey business? Indeed!
It is funny to see that Fed cut another $10 billion asset purchase while still hinting to continue to maintain $4+ trillion balancesheet. So is this a joke? Even a clown can do better.
If the stock market keep jumping 20% per year forever, then we should see average 3-4% growth. But empirical experience has shown that the market goes up and goes down.
When it comes down, we could easily see zero or negative growth. And do not forget millions of workers who have lost full-term position and now have to settle with part-term positions with low pay and no benefit. How they will react if the GDP growth slides?
Bill Gross is right: the income inequality will become a big issue in a recession or even depression.
The background has been set up. Once it penetrates 20-day MA line at the opening tomorrow, the algorithmic trading programs will kick in and crash it down to below $90. That is my guess.
I wonder how many smart watches have been sold globally in 2014?
A few hundred thousands??
I think that many people probably share the same sentiment.
Playing the "make-believe" game is part of mission of the Federal Reserve.
Currently, Federal Reserve wants to distract you from the rational expectation of deflationary pressure. That ys why it performed the fake act of tapering -- withdrawing monetary stimulus from the economy.
Well, I have already had the compass, barometer, altimeter, and many other meters on my Casio watch. So I did not see anything new.
But my watch was powered by solar and it has been running for more than five years with no problem. Can iPhone 9 runs on solar? ;-))