For the week, fear dissipated with the VXO declining 16% as stocks rose nearly 2%. That’s to be expected I suppose as the FOMC meets next week. After all, we’ve seen nothing but can kicks for the last seven years or so from the Fed. Why should we expect anything different next week?
At this point, the game has nothing to do with the economy. This is all about philosophy, saving face, or perpetuating the lie. Clearly, this zero interest rate and money printing game have done nothing to foster growth or bring true prosperity.
Now the world economy is in decline. Commodity prices are dropping as demand for real goods and services is drying up. China, a key supplier of manufactured goods to the world, is resorting to extreme measures to keep its markets from crashing any further.
Some point to the coming Year of Jubilee starting mid September and note that world finance is controlled in large measure by people of Jewish faith or heritage — including Janet Yellen. Then there’s the political angle. The Fed would prefer to avoid being too active during the upcoming U.S. presidential cycle for fear that they be accused of influencing the election.
Others note that the lying statistics are about as rosy as they’re going to get, and if the Fed doesn’t raise rates now, they will have even less statistical justification in the future (even with the lies) as the wheels continue falling off of the real economy. And the credibility of the Fed itself is danger as time goes on as seven years after the last crash they still must resort to extreme, unnatural, and harmful life-support measures to prop up the economy.
Of course there are other measures the Fed could take. They could move rates higher by 0.125% instead of the expected 0.25%. Or they could raise 0.25% to tighten while taking some other measure to loosen credit. They could move rates negative for that matter. The possibilities are endless — as is this can-kicking nightmare.
Monday, stocks in Asia lost 0.8% but in Europe gained 0.5%. Markets were closed in the U.S. for Labor Day. Tuesday, stocks rallied around the world. They rose 0.6%, 1.2%, and 2.4% in Asia, Europe and the U.S. respectively on moderate volume. This pushed the NYSE Index back above 10,000. The VXO fell 12% to close at 24.69 while the 10-Year U.S Treasury Bond yield moved 3% higher to close at 2.19%.
Wednesday, the Nikkei Index exploded 7.7% upward catapulting stocks in Asia 4.5% higher. The excitement was perhaps from helicopter Abe’s victory the day before. Whatever the reason, it couldn’t overcome reality in the U.S. as employment numbers gave further weight to a September rate hike. Stocks in Europe closed up 1.4%, but they fell 1.2% in the U.S. on moderate volume. This pushed the NYSE Index just below the 10,000 level again. The VXO rose 7% to close at 26.40 and crude oil dropped 4% to end the day at $44.27 per barrel. As the time ticks down, the chorus of profiteers from this phony bull market grows ever larger and ever louder.
Thursday, stocks corrected in Asia giving back 2.4%. In Europe they retraced the gain of the day before and falling 1.4%. In the U.S., they gained 0.3% on moderate volume. This pushed the NYSE Index just above the 10,000 level again. Precious metals miners gained 2% and crude oil shot up 4% to close at 45.71 per barrel. The 10-Year U.S Treasury Bond yield moved 2% higher to close at 2.22%. Friday, stocks fell just slightly in Asia, fell 1% in Europe, and in the U.S. fell slightly on low moderate volume. The VXO dropped 8% to close at 23.79. The 10-Year U.S Treasury Bond yield fell 2% to close at 2.18% while crude oil slid 2% to close at 44.79.