The Fed to the rescue! Injecting $100 Billion into the overnight markets and cutting interest rates by 50bps – an “emergency cut” – and stocks still fell nearly 3% across the board and the US 10-year note fell below 1.00% for the first time in history!
Are markets finally waking up to the fact that diminishing marginal returns have more than kicked in and monetary and fiscal stimulus is not a panacea? COVID19 is being used as the cover to justify such an emergency cut by the Fed and other central banks and despite the large sell-off today – the futures markets are expecting the Fed to cut further during their upcoming March meeting. Expectations are for another cut of at least 25bps, but some say they may even take the Fed Funds Rate all the way down to zero! And don’t forget folks, this is the greatest economy of all-time and COVID19 is completely under control here in the USA and there’s nothing to see. Huge eyeroll!
There is no leadership. There is no accountability. There is no credibility. And the hits just keep on coming. Monetary policy cannot remedy the kind of supply and demand shock(s) we are witnessing. Nor can such policies always pack the same punch that markets have grown accustomed to over the last decade. Add to all of this the structural issues that plague country after country and you have yourself a nice recipe for disaster. Disaster on multiple fronts – political, societal, economic, financial, and even public health. A little leadership and truth telling would go a long way, but don’t hold your breath. No one knows the future, but the stage is set for some very rough waters ahead. Are your ready? Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Recession #COVID19 #Coronavirus #Gold #Silver #Bonds #Oil #Politics #Truth #EndTheFed
The short answer is yes! Free money is coming. But of course there is no such thing as a free lunch, so the effects of any such stimulus will be short-lived. Central banks and federal governments the world over are planning to coordinate massive rounds of fiscal and monetary stimulus. They intend to throw everything and the kitchen sink at these markets to keep them inflated – even more so than what they have been doing. Problem with this of course is multi-pronged, but one of the biggest is diminishing marginal returns. There will come a day when these stimulus efforts completely fail to work and the more attempts at stimulus we witness – the closer we get to this massive day of reckoning. What occurred last week in the global market sell-off is likely just a precursor of things to come. You cannot build an economy on a foundation of sand and expect everything to work out perfectly. All of the gains that have been experienced over the melt-up of the last several months were completely wiped out in a matter of only several trading sessions. So can free money work? Perhaps in the short-term. We did witness stock market “growth” through 2019 and early 2020 from it – so it is possible it will “work” again. But for how long? Especially since we know it really didn’t work – otherwise that massive sell-off would likely not have occurred.
Other news pertains to the continued spread of COVID19, especially in the USA and Europe. Even President Trump who only stated a few days ago that everything is fine, now admits that cases are very likely going to grow. Ah, alas, finally some truth. There are now over 100 confirmed cases in the USA and testing is expected to take place on a large scale over the next few weeks, so we imagine that the number of confirmed cases will rise drastically. We also discuss briefly the continuation of the locusts swarms that are ravaging much of Africa, the Middle East, and India. And lastly, we mention the state of the 2020 Presidential race. It’s Super Tuesday tomorrow so a lot will be learned and the number of candidates will be greatly diminished. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Recession #COVID19 #Coronovirus #Politics #USA #EndTheFed #Gold #Silver #Oil #Bonds
So the 3rd Democratic debate took place this evening in Houston, Texas. As we make our way further into the 2020 Presidential campaign, we are starting to see the Democratic field dwindle. It was only a few weeks ago that there were over two dozen candidates – now we’re down to about a dozen. While there were only 10 candidates on the stage this evening given the guidelines as established by the DNC, there are still a couple other candidates on the sidelines. During the 3-hour debate there was much discussion centered around healthcare policy. Jabs and uppercuts were thrown at the frontrunners – Joe Biden, Bernie Sanders, and Elizabeth Warren. All held their own and continue to drive policies that resonate with a sizeable portion of the electorate. We anticipate the attacks will increase in volume and will become rhetorically sharper as we make our way through the process. Other topics discussed were focused on gun control, climate change, and immigration. It’s pretty much the same old talking points and ideas from the Democratic party, which will not solve the issues facing this nation. Unfortunately, the policies from the Republican side are not solving them either. In other news, the US deficit has officially hit $1 trillion. The first time since 2012 when the nation was still making its way out of the Great recession. And there’s still another month to go in the current government fiscal year, which ends at the end of September. In addition, we have inflation figures at an 11-year high. Don’t forget that the Federal Reserve meets next week to determine interest rates. We have 50-year low unemployment at 3.7% and inflation around goal, and stock market indexes about to hit all-time highs – so why should the Federal Reserve cut rates? Perhaps they just want to follow the ECB, which did cut rates further into negative territory. Also, the central bank has agreed to another round of QE, with 20 billion Euros a month of bond-buying starting 1 November. It was only nine months ago that the ECB ended their last QE program. Clearly, it is not working and the central bank lowered both their forecasts for inflation and growth. Perhaps an admission of sorts that their “stimulus” measures have not worked – so why will they work this time? Stay diversified, stay vigilant, and stay with The Kapital News. #DemsDebate #Recession #Politics #Economics #EndTheFed #WakeUpAmerica #Peace #2020
In a refreshing display of civil conversation, Senator and Presidential candidate Bernie Sanders, recently sat down with Joe Rogan for a podcast interview. The talk lasted about an hour and several topics were addressed at length. This is of course a different setting than the debate stage, where currently we have 20 candidates on stage all fighting for attention. So it becomes a game of sound bites and quick-witted responses, as opposed to substantive analysis and commentary. The Kapital News highly suggests taking the time to listen or watch the podcast, especially if you are not a fan/supporter of Bernie Sanders. This setting allows for a calm and lengthy discussion of the many structural issues that are facing this country and that personally affect millions of Americans. Maybe, just maybe, with this type of conversation, in this setting, the public can be made more aware of a candidate’s ideas and vision for this country. As opposed to the reality TV show debates that are much too common. Stay diversified, stay vigilant, and stay with The Kapital News. #BernieSanders #JoeRogan #DemDebates #WakeUpAmerica #Politics #Economy #2020
The Democratic candidates take the stage yet again in a two-day event in Detroit, hosted by CNN. This evening, ten of the contenders took to the stage to inform the American people of what ails this nation, and how their policies will serve as the remedy. A few topics that we discuss during this episode relates to healthcare, student debt, and the USA serving as the “policeman” of the word. All topics that will remain front and center throughout the entirety of the 2020 Presidential campaign. In other news, the US markets were relatively flat for the day as all eyes and ears are anxiously awaiting the verdict from the Federal Reserve, which will be aired on Wednesday. Across the pond in Europe, the major indices were down big, some in the red as much as two percent. Tomorrow is sure to be filled with lots of questions and volatility. Stay diversified, stay vigilant, and stay with The Kapital News. #EndTheFed #DemsDebate #WakeUpAmerica
It was round II this evening for the 2020 Democratic contenders. Pretty much the same song and dance as yesterday’s debate. This is to be expected as there are twenty candidates and still very early on in the campaign. Over time, the field will get smaller and the debates will be sharper and hopefully more about specifics than just talking points. One of the main takeaways from tonight’s debate was the discussion on automation and artificial intelligence. This was brought up by former tech executive, Andrew Yang. While there was not an in-depth discussion, it was nevertheless addressed. The Kapital News believes there needs to be a national conversation on this topic because while it may be easy to blame illegal immigrants and the Chinese for “taking” away jobs – we have to ask ourselves, what about technological advancements? If robots, computers, and 3-D printers displace millions of workers – how will those jobs “come back?” Serious questions and they deserve serious answers.
Where do we even begin? Iran? The G-20 meeting? The Democratic Party two-day debates? It’s almost to much to bear. Nevertheless, we’re going to muddle through the insanity and give it to you straight. What transpires this week will make headlines over the next month if not beyond. This is the crossroads of politics and economics and The Kapital News has you covered!
