Friday, November 6, 2015

MarketWatch: ‘Off the charts’ data push odds of rate hike ‘way up’; Weekly Payrolls Best in 33 Years

Compiled by Robert Schroder at Market Watch:

And an EPJ compilation:



  1. I'm still with Peter Schiff with this one:

  2. We're entering into the "credibility crescendo" here. The Fed knows that its credibility vis-a-vis jawboning is losing effect and it is getting pilloried for that by its detractors and, thus, it needs those that benefit from its evil machinations to bray louder and louder that they are in fact, "wearing clothes." The problem is that the more certainty there is in calls that the Fed will hike rates, the greater the loss in its credibility (and the credibility of those who propagandize on its behalf) when they do not. If the Fed acts to "save face" above all other considerations, the results could be unpredictable, to say the least.

    1. Or the more simple explanation, the Fed has planned all along to hike rates when employment improved.

      Remember, the sky is falling crowd doesn't think the economy in improving, To them it is always going down. That is the only way you can get the idea that the Fed is never going to raise rates, except for "credibility" reasons.

    2. Let's see, the Fed hasn't hiked rates for NINE years. How many times within those NINE years have you heard employment is improving? A bunch. Recovery summers came and went. Remember when the Fed said they would hike at 6% unemployment? I do. They didn't hike though. They move the goalposts all the time. But this time is different... Sure.

      Regarding the real economy, which I believe is totally distinct from the casino financial markets(including real estate), where you stand is where you sit. There were stock jobber guys during the fiat money inflation in France in the late 1700s who did real well for themselves. To them, the French economy was booming! Not to say today's situation is exactly the same as then, but the point is I understand that these Fed policies do create a very small group of "winners." If you live in SF or NYC or any other area awash in Fed money (let's say 10-15% of the country), whether it's via financial services, real estate speculation or the Big Gov't/MIC/NatSecurity/warmonger complex, you would probably think the economy is booming. Funny enough though, these areas are the ones that are most sensitive to rate hikes. If you live in any other area (85-90% of the country), you probably don't think the economy is booming or busting, but just barely hanging on. The sky isn't falling and rate hikes won't necessarily cause an immediate bust, but the daisy chain effect (higher debt service costs and bankruptcies personally and for govt's) will have seriously negative impact. The Fed will be blamed.

      In the past, the Fed was opaque and could avoid blame. Very few people were paying attention. Today, many more are, including the politicians hoping to place and avoid blame. The Fed has also become very obviously political and is currently between a few rocks and hard places, thus all the talk and no action. It's the safest course.