Did The Markets Just Throw A Temper Tantrum?

December 19, 2018

Chris Temple joins me to recap the Fed rate hike and the comments made by Jerome Powell in the press conference. The Fed raised rates but did adjust the expected hikes for next year down to 2, from 3. The markets across the board did not like the statement and press conference and sold off into the close. We discuss the balance sheet unwind, rate hike projections, and address what this now means heading int o 2019.

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The Yankees’ famed “Murderers Row” – destroyed opposing teams with their bats.

The Murderers Row at the Fed — they destroyed sound money and sound markets with their policies.

    Dec 19, 2018 19:57 PM

    America’s economy which is tied to their enormous debt is also tied to these ridiculous policies of the much vaunted Federal Reserve. The Board has a new policy, it’s called lets raise interest rates. Greenspan lowered rates until the liquidity spigot was gushing all over; now they want to try and reduce speculation by tightening the system. It’s too late boys and one girl, the debt monster has arrived and raising rates is going to make it all so much bigger. I can’t think of a better way to cause a Crash then to have Greenspan, followed by Bernanke, then Yellen, and now Powell. They should call it “Three Blind Mice and One Broken Clock”. DT

    Dec 19, 2018 19:07 PM

    Funny…DT…Your last sentance……LOL

    Dec 19, 2018 19:13 PM

    Great comment, ha ha! I need to figure out how to post a favorite dittie of mine on here

    Dec 19, 2018 19:26 PM

    GDX keep your eye on the prize. Price is going to stay sandwiched between the 200 dma and the 50 dma until early February, IMO.

    Dec 19, 2018 19:48 PM

    Lessons From A Tough Stock Market Year & What People Are Looking Forward To In 2019

    by @Goldfinger on December 19, 2018

    “The past is behind us and while there are many lessons to be taken from 2018 for me the biggest lesson is to not stick around in stories that simply aren’t working anymore. I’m not saying to sell all of your shares at the first sign of any trouble (a down day etc.), but when things aren’t playing out according to ones thesis there has to be a point where one says “enough is enough” and it’s time to move on. It’s better to sell sooner, rather than be sorry later.”

    “As we enter 2019 it feels a lot like December 2015 in the junior mining and resource sectors. Oil has been pummeled and equity valuations across the commodities space are arguably at historic lows. Simply stated, there’s not a whole lot of optimism out there as we enter the new year.”

    “While there are plenty of reasons to be cautious, I believe that 2019 just might be the year that precious metals investors have been waiting for since at least 2012. Valuations are cheap, pessimism is high, and many gold & silver producers have gotten leaner during the last several years, putting them in a position to finally deliver returns to their shareholders. Could 2019 be the year in which precious metals producers finally deliver leveraged returns to shareholders in a rising metals price environment? My bet is yes.”

      Dec 19, 2018 19:00 PM

      Yes indeed it is better to sell sooner, rather than be sorry later. One must be mindful of a possible market crash and everything going down at once. It is very slippery out there at this moment and like it or not the worst thing you can do is ignore the situation. It is better to take defensive action than wait for the knock on the door. DT

    Dec 19, 2018 19:00 PM

    Commentary: Hedge funds give up on indecisive “Doctor” copper

    Andy Home – December 18, 2018

    “The money men look set to close out 2018 neutral on copper, unsure what the metal with the honorary doctorate in economics has to say on the global manufacturing outlook.”

    “The price has flatlined over the last couple of months and investors have voted with their feet.”

    “COMEX open interest has slumped to two-year lows. So too has that on the Shanghai Futures Exchange (ShFE), where China’s speculators play the metal markets.”

    “The original bullish “Trump Trade” and the subsequent bearish “Trade War Trade” have played themselves out, leaving the market becalmed and investors scratching their heads.”

    Dec 20, 2018 20:54 AM

    The Next Bull Market Move Interview – Rick Rule, President and CEO of Sprott U.S. Holdings Inc

    by @bullmarketmove on December 19, 2018

    “For the very smallest of issuers, these are very trying markets. The investor perception with regards to mining, among generalist investors at least, is nonexistent. Which means that for the smallest companies, they’re literally facing survival issues, which tends to make them somewhat muted.”

    Dec 20, 2018 20:43 AM

    Unfortunately, Beelzebob RUBIN, THE Darth Vadar to our financial system, even up to now as vice chair of the CFR, should be in the center of the FED HEADS

    Dec 20, 2018 20:43 AM

    Open the spigot, inflate prices, close the spigot, buy everything cheap.

    Murderers row is right.

    One of the things that makes me doubt Jim Sinclair–his effusive praise for Volcker.

    I’m somewhat coming around to b’s point of view on gold. Yes, I do think that gold has unique characteristics that make it useful as money. Yet a gold-based system serves those who have the gold.

    One thing is perfectly clear — the power to create debt-money in private hands is our downfall, and nothing will get better until we get these god damned leeches off of us.

    It would seem we need to devise a system whereby units of exchange value (currency) are created at the point of creation of value by the producers of goods and services. Gold might well be useful in such a system as a key point of reference, as long as it can’t be the tail wagging the economy.

    Dec 20, 2018 20:57 AM

    Remember there were two very different manifestations of Volcker. One was the 1978-1982 version that squeezed inflation out of the system. He was the lead bond market vigilante. From 1982 on, however, he completely flipped, and was outdid even Arthur Burns in monetary inflation, etc. He enabled soaring deficits by abandoning the discipline of his first few years…all the subsequent Fed chairs amped all that up even more, until this one (so far.) BUT Powell, too, will eventually be forced into Volcker Part 2 mode.

      Dec 20, 2018 20:34 AM

      Interesting point, Chris. And I’m not trying to state anything too definitive here. But everything I’ve seen so far indicates to me that Volcker has always been a solid member of the World Order establishment. Doesn’t mean that his wringing inflation out of the economy was not a good thing, nor that he isn’t a better man than Greenspanke, but how do he and his actions fit into the bigger picture?

    Dec 20, 2018 20:17 AM

    The dollar does not look good at all relative to gold.
    UUP:GLD double top:

    Dec 20, 2018 20:18 AM

    One can focus on the Fed as the root of all ills, bu thee is always more to the story.
    During Volkers time then President Ron Raegen was in favor of returning to the Gold Standard.As we all know now that never happened. Instead then Treasury Secretary Jim Baker who apparently had been watching the Wizard of Oz movie one to many times set off on a Policy of Coordinated intervention with Japan and Germany with the blessing of Volker.This amounted to little more than chasing a chimera.The belief that the Fed is somehow seperate from the Executive branch is right up there with Richard Nixon calling up the Apollo Astronauts while they were on the Moon.

      Dec 20, 2018 20:29 AM

      Come on, snowbird, the owners of the Fed also own the executive branch. Appearances to the contrary are by design.

      “Appear weak when you are strong, and strong when you are weak.”
      ― Sun Tzu, The Art of War

        Dec 20, 2018 20:45 AM

        I feel so much better since Mnuchin came out on Bloomberg and said that Yield curve is an unreliable indicator for the Economy.
        Currency short term value not a concern of the Treasury
        President Trump and himself were not aware of the Huawei Executive’s arrest when it took place.This in itself is a pretty scary statement when you think about it.

        Dec 20, 2018 20:29 AM

        “the owners of the Fed also own the executive branch”

        Seems so obvious!!! But I guess it must be stated and re-stated.

        All anyone has to do is go back and dig into the reality of the Wilson administration, when this outrage was perpetrated.

          Dec 20, 2018 20:38 AM

          Stating it repeatedly only has value if it gets people to investigate objectively/honestly for themselves. In other words, it will only help those who deserve to be helped.

    Dec 20, 2018 20:25 AM

    Post Fed, the miners got stuffed below important fork resistance:
    I don’t think that will be a problem for long.