Fed kept raising rates until sumpin broke

Fraser921
Posts: 2954
Joined: Mon Mar 22, 2021 11:48 am

Fed kept raising rates until sumpin broke

Post by Fraser921 »

SIVB was $ 240 on Monday, worthless today.
Their sin, holding long term treasuries that fell as rates went up.

Other bank names are getting whacked. i suggest you dont have more than 250 with any bank. You think Biden will bail you rich guys out?

Market down again and this will fan fears of recession which is not good for the market or energy stocks

I sold APA,SBOW and a little OXY. I hold no other energy names, NONE

We have a demented moron in charge with left wing radicals as his aides. Perversion is the order of the day.

Sooner or later you know this will be a disaster. The politicians will be looking for someone to blame

That is all. Have a nice weekend
ChuckGeb
Posts: 945
Joined: Thu Nov 21, 2013 2:46 pm

Re: Fed kept raising rates until sumpin broke

Post by ChuckGeb »

Financial earthquake in California! Uncertain times. Will the Fed blink and back off or continue to raise interest rates. Will Congress bail out the left coast elite? There are a lot of companies that were intoxicated and funding growth at near zero interest rates that are going to implode at 7.5% plus base (Prime rate) interest rates. Let's face it, there is blood in the streets coming in the economy.

Is it time to sell, hold, or buy with fear running rampant. Something we all must decide or remain paralyzed like a deer in the head lights.

Warren Buffet says buy when there is mounting fear and sell when their is overwhelming joy in the markets, or something like that. For now I am staying pat with modest positions in AR, CRK, and SBOW and will look to add when markets react irrationally to the downside. But of course will keep watching for further erosion of the economy.

Its time to keep informed but not react irrationally.

Good luck to all EPG members.
ChuckGeb
Posts: 945
Joined: Thu Nov 21, 2013 2:46 pm

Re: Fed kept raising rates until sumpin broke

Post by ChuckGeb »

China brokers deal with Iran and Saudi for oil supply to settle in Yuan. China talking to the the guy in the sweatshirt to backstop Ukraine, get the deal settled and likely rebuild the country while Biden licks his wounds and tries to figure out how he will finances is 6 trillion plus budget. We haven't seen anything yet when the US dollar is no longer the world's reserve currency and we can't print dollars to fund massive deficits of Biden posing as Santa Claus. As Eric Clapton says " No one knows you when you are down and out!"
aja57
Posts: 336
Joined: Sun May 29, 2022 10:35 pm

Re: Fed kept raising rates until sumpin broke

Post by aja57 »

Looks like VC companies decided to take down SVB to send a message to the Fed.
Shameful to see Jamie Dimon actively slumming for business while a competitor falls especially when the Fed came to JPM rescue a couple years ago.
We could have a very Black Monday in the markets in 48 hours.

https://www.zerohedge.com/markets/record-bank-run-drained-quarter-or-42-billion-svbs-deposits-hours-leaving-it-negative-1bn
aja57
Posts: 336
Joined: Sun May 29, 2022 10:35 pm

Re: Fed kept raising rates until sumpin broke

Post by aja57 »

Chuck, what do you think happens to oil prices when your thoughts come to fruition?
ChuckGeb
Posts: 945
Joined: Thu Nov 21, 2013 2:46 pm

Re: Fed kept raising rates until sumpin broke

Post by ChuckGeb »

That's a very good question. Its a very uncertain world but I think we are still going to need a lot of it which will continue to be capped by declining world reserves and underinvestment. I am hoping we can hold things at bay until we can regain some fiscal responsibility and return to the world stage with some credible and strong leadership. Not going to happen behind Joe Biden, Anthony Blinken, Janet Yellen. sad but true.
ChuckGeb
Posts: 945
Joined: Thu Nov 21, 2013 2:46 pm

Re: Fed kept raising rates until sumpin broke

Post by ChuckGeb »

WSJ:

RIYADH, Saudi Arabia—Iran and Saudi Arabia agreed to re-establish diplomatic relations Friday in a deal mediated by China, ending seven years of estrangement and jolting the geopolitics of the Middle East.

The deal signals a sharp increase in Beijing’s influence in a region where the U.S. has long been the dominant power broker, and could complicate efforts by the U.S. and Israel to strengthen a regional alliance to confront Tehran as it expands its nuclear program. It comes as the U.S. has been trying to broker a peace deal between Saudi Arabia and Israel, an effort now clouded with uncertainty.

China in recent years has built closer economic ties with Iran and Saudi Arabia, both of which are important suppliers of oil to the world’s second-largest economy. But this bridge-building effort is the first time Beijing has intervened so directly in the Mideast’s political rivalries.
ChuckGeb
Posts: 945
Joined: Thu Nov 21, 2013 2:46 pm

Re: Fed kept raising rates until sumpin broke

Post by ChuckGeb »

Fed is responsible for at least 10,000 points in the Dow index via their quantitative easing and zero interest policies. They are now reversing course supposedly taking $95 billion a month of liquidity from the market while raising interest rates. The Fed created a lot of wealth for the wealthy and I presume members of EPG by injecting massive liquidity into the market. Money managers watched their fees skyrocket while they worked less. Over the last 20 years it has been hard to miss with diversified stock investments (oil stocks are probably the exception).

We are in uncharted territory. Anyone interested in learning the power and danger of the Fed’s monetary policy should read Lords of Easy Money available on Amazon. Yes the Fed can induce recession which could get worse. Uncharted choppy waters…who’s at the helm?

I can’t say that anyone knows how all this is going to turn out but if you are watching the same people in control I am watching it does have to concern you. You have to wonder “when will I know if I’m woke?”
tlengoc
Posts: 69
Joined: Thu Feb 23, 2023 1:38 pm

Re: Fed kept raising rates until sumpin broke

Post by tlengoc »

Maybe Powell will pause and raise 25 bips in May, June and July. Do you think QT will end and QE is back on.
ChuckGeb
Posts: 945
Joined: Thu Nov 21, 2013 2:46 pm

Re: Fed kept raising rates until sumpin broke

Post by ChuckGeb »

My guess is Powell is going to hold off on rate increases until smoke clears and better view on damage done to economy from rates rising so quickly. This is going to be a great year for bankruptcy attorneys!

While inflation needs to be brought under control I believe there is a time lag to previous actions that are just now showing up. Tough spot for Powell to be in but he created this mess!

With regards to QE, my belief is I don't think he will voluntarily reinstitute it but I don't see a lot of buyers out there for the US Biden Bonds necessary to fund the Biden spending spree so they may have no choice. What do you think?

Don't take it from me, I have no economic training. I just see what I see.
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