Market Commentary

Another Big Fed Rate Hike

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As “expected” the Federal Reserve raised the fed funds rate by another 75 basis points (.75%) today.  We put “expected” in quotation marks because when we started writing about inflation ten months ago, the big Wall Street firms thought we’d get a total of 75 basis points of rate hikes for all of 2022.  We … Read more

Inflation Comes in Hot Again – and Still Understated – 8.3%

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The August Consumer Price Index (CPI) just came in at 8.3% (prices up .1% from last month).  Market watchers were expecting a CPI of 8.1% and prices down .1% from July.  Whether the report showed 8.1% or 8.3%, it’s a huge number.  To give you a sense of how bad 8% inflation is, at that … Read more

A Market Run By Press Conferences

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Introduction: We’ve noted two related market trends over the past few months.  The first is bad economic news is good for the market.  That’s because the Fed is more likely to slow rate hikes into a weaker economy.  Click the link for a more detailed description.  The second is the market has been trading based … Read more

Who’s Going to Pay for the Losses at the Fed?

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We’ve pointed out more times than we can count that the Federal Reserve currently has around $9 trillion dollars of securities on its balance sheet.  This includes trillions of dollars of mortgage securities its not allowed to own.  The main reason that inflation has been so high this year has been the Fed’s increase of … Read more

Guest Post – Idiots and Inflation

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We’ve featured the work of Laks Ganapathi previously.  She’s smart, interesting, and subversive.  You enter a conversation with her expecting one outcome, and ten minutes later, realize she’s taken a completely different approach to the subject and has detailed reasons for her unexpected conclusion. I was about to write a piece on the connection between … Read more

I Know That You Know That I Know That You Don’t Know What You’re Doing

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The title is intentionally confusing. Introduction: One of the most challenging parts of trying to evaluate the stock market is the second-order game of figuring out what everyone else is expecting.  I’ve seen uncertain situations where we got the “bad” outcome and the stock went up on resolution of the uncertainty (even if it was … Read more

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