So, as I wrote 24h ago, it was clear to anyone paying attention that the Bank Of Japan put itself in a very dangerous spot (TwitterX). Back in 1992, when the Bank Of England was in danger, the Bundesbank cut rates 25bp even if it didn’t make any sense for the German economy. Of course, it ultimately didn’t help because the fate of $GBP was sealed.
An emergency 25bp FF rate cut is an option that the #FED doesn’t have today. With all those PhDs working in the Eccles building, they surely figured out BLS CPI numbers (and pretty much any statistic they publish) are “seasonally politically adjusted” and now completely detached from reality. Cutting rates now will flare up inflation so much that all those immigrants crossing the border will feel so much at home after the $USD will be rebranded $USP or “United States Peso”!
Imagine what would happen to Joe Biden’s approval rating if the #stocks bubble he inflated to the stratosphere implodes right now. With Jerome out of the game, Joe needed his Janet Tinker Bell to spread some magic dust and make sure the #BOJ didn’t implode and bring down the whole house of cards.
Janet Yellen “Magic” created 2 worlds:
THE REAL WORLD:
- Credit Card debt at ATH and rising
- Bankruptcy filings going through the roof
- The CRE market in free fall
- The #DTCC warning about the MBS market and increasing the margin requirements
- The #DTCC that sends warning notices about market disruptions and shortly after we get Mr.Cooper $COOP “hack,” the Federal Reserve ACH system “human error,” and then the ICBC “hack” all in a few days.
- Japan monetary and fiscal policies completely out of control with #BOJ close to losing control over the $JPY
- Geopolitical risks mounting with Israel now preparing to attack Hezbollah in Lebanon after having secured the Gaza Strip
- An astonishingly high number of people now living paycheck to paycheck
…. OK I THINK IT’S ENOUGH….
JANET NEVERLAND:
- Mag7 #Stocks accounting for 89% of the total gains in US #stocks YTD
- Nasdaq vs #Russell2k ratio beyond the nosebleed levels reached during the DotCom bubble
- Asset Managers’ use of options and derivatives to “enhance” their performances out of control (TwitterX)
- Algorithms running “Dumb and Iterative” systematic strategies that are nothing different than a computerized ponzi scheme (TwitterX)
- Companies that keep going up thanks to weaponized gamma squeezes (Archegos style ??) that don’t raise any warning at the SEC unless they implode (TwitterX)
- Leverage in the US Treasuries “Basis Trade” bringing the total shorts to unthinkable levels (BY THE WAY, HOW ARE THOSE DOING TODAY AFTER SUCH A MASSIVE CRUSH IN YIELDS?)
- US Federal Debt totally out of control and becoming a serious global threat (TwitterX)
- The #OOTT market that is now a derivatives bazaar rather than a commodity one (TwitterX)
…. OK I THINK IT’S ENOUGH….
Janet Yellen preaching a “soft-landing,” which has now been upgraded to a “no-landing” by many brokers, isn’t anything different than a “SELF-PERSUASION” marketing technique.
The goal of inducing self-persuasion is to address “Cognitive Dissonance,” which means a person holding opposite thoughts (like “the economy is crap, but #stocks are so #bullish”). Cognitive dissonance creates discomfort, and this is then eliminated finding a “story” that makes the person feel better (like #stocks go up because Janet confirmed the “soft landing”).
The brainwashing of the masses works well until it suddenly doesn’t.
What happened yesterday with the US CPI is a clear sign of panic behind closed doors. Why? Because if you go to the extent to risk tarnishing your reputation to trigger a #stockmarket move that clashes hard with reality, then it means avoiding something very dangerous might have justified such an extreme action.
Read on TwitterX