Or as many industry analysts fear does the FED know what they are doing?
What is the FED doing?
For years there have been many that feel that the FED has made a real mess out of a lot of things including the economy and the banking system…
If you feel that statement is not right then think about the huge mortgage debacle of just a few years ago where Billions of Tax dollars were spent to “buy out” what they called troubled assets.
But when it come to doing something about these so called trouble assets the tax payers never realised any return on all that money that was put into the banking system….
If you know of an instance where the money paid out was returned to tax payers Ill be happy to take a look because to date there is nothing to indicate that any of that money did anything but disappear or at least went down a very dark hole in the ground or in the pockets of some members of banking organisations.
The real problem is not just that the FED has made some troubling decisions about many different things but they have basically continued to raise interest rates even after “most of the world” could clearly see that the higher interest rates were not having any effect on high prices or inflation and in fact it is hurting millions of people all over the world who are now paying higher prices for car payments…
Home mortgages are getting difficult if not impossible to secure due to the higher costs of writing loans many banks and companies are refusing to write loans that they were happy to write just three years ago.
But not now…
If you want to buy a house you have to pay more and more and more.
People are basically just giving up on the dream of being able to buy a house because the cost keeps going up and the FED is sitting there basically saying that hey we know what were doing is not working but were going to keep on doing it…
Could it be that the FED just does not know what its doing …
The ideal that doing the same thing over and over again will suddenly bring a different result is as the saying goes the definition of Insanity…
INSANITY folks.
That is what is going on at the FED and they are dead set on continuing to do it but this is not hurting big corporations.
They have the cash they don’t need loans…
They are making plenty of money…
But the FED continuing to “Act Stupidly” is hurting small to midsize business entities and also upper and middle class wage earners.
The longer the FED continue to raise interest rates the more economical issues are going to continue to get worse, many are afraid of a recession…
What makes it even worse is that this is preventable.
A recession does not have to happen if only the FED would listen ….
But as outlined by a professional analyst, this is probably not going to happen.
Market Watch…
This Fed-manufactured morass will deliver another blow to U.S. stocks in 2023, McCullough predicts — particularly market darlings that until last year could do no wrong. Says McCullough: “The Nasdaq COMP is our favorite short.” As an example, McCullough singles out Tesla stock, which he says will disappoint and demoralize shareholders on the way down just as it rallied true believers on the way up.
So we are looking at a problem that is a direct result of “the Fed Acting Stupidly” they cannot admit that they have behaved stupidly so they will continue to do the wrong thing over and over again….
Bankruptcy will increase and many businesses will fail.
Repossessions will increase and the automotive industry will lay off hundreds of thousands of employees.
This is bad but the FED cannot understand and they cannot figure out anything else to do because in reality they are in the wrong position to be attempting to change the economy by raising interest rates.
Raising interest rates will not fix this problem!
Market Watch…
In this recent interview, which has been edited for length and clarity, McCullough discusses where he thinks investors should put their money now, what would turn him more bullish on bonds, and why Tesla and CEO Elon Musk were at the epicenter of the “Mother of All Bubbles” — which the Fed created and now is attempting to crush.
In housing, for example, luxury home sales are down. We’re seeing a huge decline in mortgage demand. It doesn’t matter if the 30-year mortgage rate oscillates between 6% and 8%, it chokes demand. That’s one of the reasons why Blackstone’s BREIT is under duress. It’s the largest nonpublic REIT and therefore the most widely held. It’s clearly a game of promising “x” return and annual liquidity, and now they’ve achieved peak returns and are going to have to take their marks.
We have a serious problem that is being made worse because the FED have nothing in their quiver…
They have no plan except to continue to do what has proven to NOT WORK!
What is even worse is that once they realize what they have done wrong they will try to start backing up…
That will not work either. . .
When the stock market starts to go way down they will then come out and start aggressively slashing interest rates trying to fix the mess they have created.
That will not work either because it will be too little too late!
At first there were only a few people that were sounding the alarm about the FED now there are many many more…
But the FED is not listening…
When they come out and raise the interest rates again …
You are going to see the market react and it is going to be really bad. . .
There is a solution to this problem but the FED does not have any idea how to find that solution because they have shown that they either do not care or they really are as stupid as they appear to be!
Fasten your lap strap folks until Powell resigns nothing is going to change and that is what the real problem actually is here we have an old white man in charge of doing nothing to help the banking and economy troubles.
As long as the FED continue to act like this economy is the same as it was 40 years ago they will continue to believe that raising interest rates is the way to go but I would encourage you to look at the interest rates from the 1970s to early 1980s once you see that you will understand all the mistakes that the FED is making and how they will likely continue to make the same mistakes that caused so many problems back in the 1970s…
If you can’t learn from past mistakes which the FED made back then how can you expect to see something different because the FED is making the same bad mistakes they made back then…