Loading ...Friday afternoon from Bloomberg: “Dip-Buyers Report to Duty to Save Stocks From Worst Week of 2021.” While the late-week rally had traders feeling pretty good about things, the bottom line is Monday through Wednesday market action was ugly. It looked about as one would expect from faltering Bubbles – from tech stocks to crypto to ARK.
Unsettled by mounting inflationary pressures, the Treasury market finds peace in global Bubble fragilities. And I actually believe the Fed is on the same page. Officials will resolutely dismiss inflation risk – because they’re scared to death of collapsing Bubbles. At this point, they must believe it’s best to just let the Bubbles and manias run their course.
The Fed and market pundits stick blindly to the assertion “inflation expectations will remain well anchored” – assuring the bond market, dovish Fed policies and the great bull market are all equally well anchored. Yet this is not an environment where anything is securely anchored.
We live in a period of acute disorder – monetary and otherwise. Society has been rocked off its foundation. The insecurity that comes with a once-in-a-century pandemic – our health, our economy, our institutions and our social cohesion. Hurricanes, floods, drought, devastating fires – the frightening uncertainties associated with global climate change. Power outages. Water shortages. Shootings. A ransomware hack that takes down a major U.S. pipeline and leaves millions fearing they won’t be able to fill their tanks. Who and what next? The Fed “printing” Trillions – seemingly blind to inflation and Bubble risks. Multi-Trillion dollar deficits. Wealth redistribution. Traditions and political institutions in disarray.
It was an unnerving week. Things seem particularly Un-Anchored.