Sorry for the tardiness of today’s column. I was waiting for Commisar Powell to pass down his edict and to see what the markets would do in response.
No surprise anywhere as far as I am concerned. Market whipsawed a touch before finding a direction and that just indicates that investors played it rightly or wrongly and they are trying to make up for their inherent stupidity.
I am know I am being a little harsh but playing the news to me is a fools game. As individuals in fast moving markets, we are always a minimum of 30 seconds behind any real movement. Computers programs and sophisticated algos take over and you ride the end of any wave and hope to Hell you are fast enough to get off before the inevitable change in direction.
Day traders love this? Sorry. I don’t buy that BS and never have. Day in and day out, day traders insist they do well in volatile markets but the fact is if you take a steady solid portfolio of any group of selected stocks that have an average year, lets say up 8%, it will beat most day traders returns. The tax implications from day trading alone has to eat into their savvy and I don’t know this from experience but I do believe most day traders are full of it.
Anyway, I saw what I expected to see and markets did not thrill me in either direction, so now what?
Parsing through the statement Chairman Powell gave was fairly easy. The Fed is going to remain aggressive in dealing with inflation and believes it will have to get to the so called “Terminal Rate” of 4.6%. Which, by the way is higher than I expected and looking back, I was probably not getting the gist of the Fed’s ultimate move. Granted, they expect to hit that target sometime in 2023, I thought 3.5% would be their “Terminal Rate”.
As we all know, the Fed has few options as far as fighting inflation and the bigger issue is the Federal Government. The administration has had a major hand in this inflationary cycle and its willingness to spend, spend, spend remains unabated. Their is a Mid Term election coming up and their hold on power is in question. So what does an administration (democrats are notorious but Republicans are not shy either) do to keep people happy and in their corner? Spend. Spend on programs that impact the unions. Spend on programs that impact the lower middle class. Spend until the CBO says stop.
Oh, and let two million undocumented aliens into the country and ship them off. Surprisingly, a lot of these illegal people will vote. How does that happen? It does. Who are these people going to vote for? The people that gave them sanctuary and free cellphones and medical help. Yes, the Democrats found a new voting source. Even if it totally illegal.
See, this is all supposition on my part but I think there probably is a lot of truth to this. Why else would the Liberals and Democrats overall be so inclined to allow this to happen? Oh wait. The impact is not being felt in Blue states. It is being felt in Red States. Texas, Arizona and Florida mainly but this is trickling down to Oklahoma, New Mexico and Nevada as well. No wonder the governors of those states are sending them to the bluest of blue states and cities. They can’t alter elections that Democrats have a lock on so let them figure out what to do with them.
Before the 8 liberals that read my column jump down my throat, let me remind you all that I do believe in legal immigration. I think this country needs immigrants more now than it ever has and the Federal government should have had the systems in place years ago to create a workable framework for immigrants. I am no expert but it doesn’t seem that hard. Someone wants to move to this country, there should be complete, unimpeachable processes to allow that to happen. Now, it’s slapdash, haphazard and mind boggling.
Most of these people are hardworking, family oriented. They want to work and build a life for their family in this country. I am sure the vast majority would love to be part of this growing, dynamic nation and while it wouldn’t be easy, prosperity is possible. Now, it’s run for the border, get some illegal work and hide when “immigre’” shows up. The are a lot of business owners that prefer it that way. They take advantage of the situation and don’t allow for success. Those people like it the way it is. Sorry. I like it where everyone is legal, paying taxes, adding to society in some fashion.
I feel a tinge of liberalism coming out.
Maybe I am the real dreamer here.
You were worth the wait;)