The Money Printing Pump is in gear. But it’s being driven by the lower dollar, not CB printing. It’s still getting the job done for now.
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Commentary in today’s video discussion.
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Pump Watch
Will the FED pump a la 2016? I doubt it. It's going to be very interesting to see how quickly the market loses momentum at the next tidal turn.
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Weekly Update
I’m watching to see what the half-life of the FED’s remarks and the Chinese RRR cut are. The tides give some short-term room for upside here.
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Divergence soon?
Just What Did Yellen Do in January 2016?
I’ve been showing my ‘Money Printing Pump” chart for years now. I have always contended that the market would have continued to crash in 2016 had not the FED and related central banks put the pedal to the medal with a full-on acceleration in January of that month.
In recent weeks I’ve reprinted the chart, here and on twitter, saying to watch for another similar move from the FED as this latest ‘crash’ was in it early stages. I believe such a monetary pump is all that will pull the market out of its recent slide.
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On Friday, FED chairman Jerome Powell discussed the January 2016 events as an example of what the FED can do. Here are his remarks on that topic. The markets remember what the FED did, and they went wild Friday on prospects of another January 2016 scenario.
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But is what Yellen did in 2016 feasible now? My version of the “pump” jumped by 5% in less than three weeks! Yes it worked, stocks took a u-turn out of their earlier steep dive.
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I suspect the market will quickly sour on Powell’s remarks if another mega-printing-pump a la 2016 is not forthcoming.
What Tide Is It?
That toxic 'red tide' has returned. Equity weakness expected.
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Weekly Update
The tides continue to call the short-term tune. Liquidity dominates the long-term. It will take a surge, similar to January 2016, in the 'money printing pump' to prevent further asset price implosion.
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Who’s Your Daddy?
Father Time - that's who!
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Weekly Update
The most radical idea on Wall. St. When financial market behavior becomes more irrational, financial markets become more predictable.
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click chart to enlarge