The Bubble Creators
It would appear that the Bubble Creators may not have been that smart. They were financed by the FED, and propelled by a financialization process based around globalization and monetization. Real growth never entered the picture. Now they have no real ideas except for following the FED into a short selling black hole.
Powell stopped transitory inflation talk on Nov 30, 2020. If he had really wanted to fix the problem quickly he should have had an emergency meeting and punished all the bubble creators with a quick 2.5 % rate hike that same day. Then we could have cleaned out the problem players over a couple of weeks and got the markets to a level playing field.
Instead we had to wait a couple of months, give all the bubble creators an opportunity to create a negative vacuums bubble by shorting and thereby continue moving money to the black hole that is FED cozy.
So none of this is about maintaining a stable investment environment that can create strong growth. There was little growth in the Bubble and little now as the game continues.
Congress has a responsibility to shake up the FED at its core, maybe set a rate set point of 3.0 % with rigid set of requirements outlying under what conditions the FED can deviate.
Back from vacation..
So,I am back from a must needed vacation, left my laptop at home, promised my wife I would only look at the markets briefly on my iphone once a day. I will be be producing some analysis of what is working and point out my first comment today, the Wall Street hotshots are fighting in the forest, of the 25 market themes I track, virtually all went up in what I term the bubble creation period, August 7, 2020 to August 30, 2021. Since May 11, 2022, the start of the 2022 market bottom period, only three of these themes are positive, Solar, EV, and Botech. These are three of the themes we have been focusing, only one theme our model has highlighted, Computer chips is lower since May 11. More later this week.