The Fed's Bond Bubble Doomsday Machine

[Natural Citizen]

If these items don't convince you we are in an historic bubble, nothing will:

This is the biggest bubble in the history of mankind. Really. There's no contesting it.

End of the day we have a currency crisis. This is the root cause.

But yeah. It's historic. And it will affect everyone this time. Not just the poor.

 

[EdwardBaiamonte]

If these items don't convince you we are in an historic bubble, nothing will:

This is the biggest bubble in the history of mankind. Really. There's no contesting it.

End of the day we have a currency crisis. This is the root cause.

But yeah. It's historic. And it will affect everyone this time. Not just the poor.

no worries the Fed now understands monetary policy very well and knows how to stop problems on Wall Street from spreading to main street. Do you understand?

 

[kyzr]

Here begins the attempt to unwind: Federal Reserve likely to begin cutting back $4.5 trillion balance sheet this year

Time to light a candle, cross your fingers (and toes), fondle your rabbit's foot, etc.

Unwinding Of Fed Balance Sheet Catalyst For Higher Yields, Lower Stock Prices
"The Fed balance sheet was approximately $4.5 trillion before the unwinding began a year ago. The process began at just $10 billion per month in fourth quarter 2017. In first quarter 2018 it jumped to $20 billion per month. In the second quarter it jumped to $30 billion per month. In third quarter 2018 the pace was $40 billion per month. Starting this month, the pace accelerated to $50 per month and could last through the year 2020. As of the end of September the balance sheet stood at $4.193 trillion, a drain of $307 billion."

I hope that they slow down the $50b a month to something lower. Or, say that there are no rate hikes for 2019. Powell's comment that volatility "doesn't leave a mark on the economy" appears to be wrong.

 

[EdwardBaiamonte]

Here begins the attempt to unwind: Federal Reserve likely to begin cutting back $4.5 trillion balance sheet this year

Time to light a candle, cross your fingers (and toes), fondle your rabbit's foot, etc.

Unwinding Of Fed Balance Sheet Catalyst For Higher Yields, Lower Stock Prices
"The Fed balance sheet was approximately $4.5 trillion before the unwinding began a year ago. The process began at just $10 billion per month in fourth quarter 2017. In first quarter 2018 it jumped to $20 billion per month. In the second quarter it jumped to $30 billion per month. In third quarter 2018 the pace was $40 billion per month. Starting this month, the pace accelerated to $50 per month and could last through the year 2020. As of the end of September the balance sheet stood at $4.193 trillion, a drain of $307 billion."

I hope that they slow down the $50b a month to something lower. Or, say that there are no rate hikes for 2019. Powell's comment that volatility "doesn't leave a mark on the economy" appears to be wrong.

obviously what they do will depend on how things look as the year progresses.

 

[g5000]

The current Fed chairman is now bumping up against the downsides of their bond bubble doomsday machine: Powell faces early reckoning on Fed's $4-trillion question | Reuters

 

[EdwardBaiamonte]

The current Fed chairman is now bumping up against the downsides of their bond bubble doomsday machine: Powell faces early reckoning on Fed's $4-trillion question | Reuters

whats the downside?? Economy is stronger than ever. 1+1=2

 

[g5000]

The current Fed chairman is now bumping up against the downsides of their bond bubble doomsday machine: Powell faces early reckoning on Fed's $4-trillion question | Reuters

whats the downside?? Economy is stronger than ever. 1+1=2

What special propaganda channel told you the economy is stronger than ever?

Our economy is so fricking fragile right now that even a 25 basis point interest rate hike can send it reeling into a recession!

 

[EdwardBaiamonte]

Or, say that there are no rate hikes for 2019. .

why would they do that until they see how leading indicators look through the year????????

 

[EdwardBaiamonte]

What special propaganda channel told you the economy is stronger than ever?

97% employment sky high stocks 3.5 GDP are good indications economy is very strong. 1+1=2

 

[EdwardBaiamonte]

Our economy is so fricking fragile right now that even a 25 basis point interest rate hike can send it reeling into a recession!

you're confused. 25 basis point means nothing, but, there is always the fear that that fed will over tighten with too many 25 basis point increases and cause a recession. You see very clearly though that they are raising only to extend economy can handle it and of course can always lower too. Further, economy is not fragile, it is vast and international like a giant supertanker on the ocean.

 

[eagle1462010]

.

 

[g5000]

The Fed announced another "jumbo" interest rate hike yesterday. 75 basis points.

All the government and corporate bonds bought since I started this topic are now all underwater.

This will not end well.

The Fed announces 4th consecutive 'jumbo' interest rate hike of 75 basis pointsâhere are 4 things that will be more expensive

As the Fed fights inflation with another 0.75 percentage point hike, the debt costs for credit cards, loans, and auto financing will continue to rise.

www.cnbc.com

 

[CrusaderFrank]

The Fed announced another "jumbo" interest rate hike yesterday. 75 basis points.

All the government and corporate bonds bought since I started this topic are now all underwater.

This will not end well.

The Fed announces 4th consecutive 'jumbo' interest rate hike of 75 basis pointsâhere are 4 things that will be more expensive

As the Fed fights inflation with another 0.75 percentage point hike, the debt costs for credit cards, loans, and auto financing will continue to rise.

www.cnbc.com

It's wasn't supposed to end well for the USA, hence the Wuhan bioweapon, stolen election, massive influx of new dollars, Fed crushing the US economy, ending with US dollar losing its Reserve currency status - but only after the Republicans get control of Congress

 

[CrusaderFrank]

The Fed announced another "jumbo" interest rate hike yesterday. 75 basis points.

All the government and corporate bonds bought since I started this topic are now all underwater.

This will not end well.

The Fed announces 4th consecutive 'jumbo' interest rate hike of 75 basis pointsâhere are 4 things that will be more expensive

As the Fed fights inflation with another 0.75 percentage point hike, the debt costs for credit cards, loans, and auto financing will continue to rise.

www.cnbc.com

But the Inflation Reduction Act will set things right!

 

[g5000]

Silicon Valley Bank has gone under for the reasons I outlined in my first few posts in this topic.

Interest rates have climbed, and everyone who holds an older bond is deeply underwater.

I doubt SVB will be the last bank to go under. Especially since the Fed is looking at raising interest rates another 50 basis points in few days.

I expect a lot of investors who bought corporate debt during the glory days of ZIRP are shaking in their boots right now.

 

[g5000]

Joint Statement by Treasury, Federal Reserve, and FDIC

Washington, DC -- The following statement was released by Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Cha

www.federalreserve.gov

We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.

Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.

 

[CrusaderFrank]

It's wasn't supposed to end well for the USA, hence the Wuhan bioweapon, stolen election, massive influx of new dollars, Fed crushing the US economy, ending with US dollar losing its Reserve currency status - but only after the Republicans get control of Congress

Called it!

 

[g5000]

Called it!

You called what?