Howdy Fed : Stock Bubble got bigger

 Blame It On The Bot Traders 

Yesterday US Federal Reserve increased Interest Rates to combat hyperinflation, as they were expected to do. But markets are driven by Bots which trade in accordance with market expectations.  So stock market trading bots started buying risky shares and assets with borrowed money.

Actually when interest rates go up, banks have to pay more for such trades, human traders with natural intelligence know that. But the bots have AI, the abnormal pretence of intelligence, their parameters for "Market Expectations" on Interest rates matched , so they bought and are still buying "a hell of a lot" shares.

Let's look at the Fundamentals, shall we, has anything changed?

1. Ukraine War - still Ongoing. 

2. Russian Oil Embargo & Market sanctions- still exist. 

3. Pandemic- still raging in places where stringent testing is ongoing. 

4. China- still under Covid Lockdown and without a trade deal with US or its European proxies. 

5. Crude Oil Price- still over $100.

6. Media - still dumb, under all those layers of makeup . 

No, nothing has changed. Cost of borrowing dollar has increased and Federal Reserve wants you to exercise caution,  that's what "Interest Rate Hike" means. 

If you go with the flow, your hands will be burned , if you are a human that is. Bots have no hands and can't even be burnt. 

So take care humans, this exuberant trade has no legs and don't sit on Bubbles mistaking it for a couch. Corrections will be coming in 24 hours or in 24 days. 

US is heading for recession and perhaps towards end of "Dollar Standard".

US recession coming?

 Deutsche Bank 

Deutsche Bank finally admitted "Global Bubble Building Industry" also known as "US Economy" will fall into recession in 2023, if US Federal Reserve goes with interest rate hikes this year.

Another way to put it forward is, the Recession of 2008 which has been brushed under the carpet with the ponzi scheme of unreal degrees of Low interest rates worldwide (Led by US Fed of course) will resurface and vulnerable yet giant banks like Deutsche Bank will end belly up.  Yet this interpretation of their forecast will not appear In news magazine,  but it is the truth.  US recession would mean severe stress in Global and specially European banks and in current Geopolitical scenario, I don't think China will be too eager to buy Western debt . So Eurozone will fall into recession and all Western economy will be busy in bailing out their Billionaire and Bankers.

 How about Japan, India and Australia? They always make huge "Foreign Policy Statements" .. Will they not buy Western papers and save them from recession.. Well, Firstly their own debt situation are as worse as USA ... after all, they are satellite Economy of US and their central banks blindly follow US Fed, whatever US based "Thinktanks" telegraph to them, their central Banks follow that.

Add to that, current war in Ukraine,  sanctions on USSR , oops , I meant Russia and lack of trade deal with China.. this means Inflation is going to remain high in throughout 2022-23. Forget what deaf and dumb Economists of IMF and World Bank, Global economy will have Stagflation this year. 

Only Tool left with "Central Bankers" is to raise "Interest Rates" to combat "Inflation" , but that will make "Too Big to fail" banks FAIL . That's what Deutsche Bank is pleading to US Fed, in a subtle way.

I'm thinking a "Global Depression" is more likely. So careful there.. out in the Market place.

Recovery is on, but only for the SUPER-RICH

Most Wall Street Banks will be reporting in green for last quarter only because speculation and insider trading has lifted the stock markets to artificial highs. If you calculated the stocks and derivatives at an average price of last 3 quarters, they will end up in red.

Why the recovery isn't actually as impressive as finance experts says, Lets investigate:

1. The manufacturing sectors came out from their previous loss making time, only by slashing workforce and reducing prices. The retail segment is doing the same. This means consumer has less amount to spend (rather the theory of Americans have started saving huge amount in their socks or under their pillow).

2. So the so called "Recovered Economy" has a far less consumer base to start with. With job losses continuing and people who are without a job for 12 months no longer counted on neither as Jobless nor as Employed, there is no immediate chance of major expansion in that base. The consumer confidence data and retail sales figure shows that.

3. Banks have become smarter since Enron, they don't cook up their books directly, instead they influence market to inflate their asset class. In old days, doing this in stock market could have landed one jail for Insider Trading.

Be careful and take Analysts upgrade news with a pinch of salt. Recovery is on, but only for the super-rich ( The too big to fail category), too bad if you are not in it.

Read roubini's warning on Next Bubble at http://www.rgemonitor.com/roubini-monitor/257791/

Are we doing well or not?:The lie of the Recovery

Are we doing well or not? These are merely matters in human perception. We indulge in statistical studies, check econometric indices and ultimately depend on third party opinions about our economy, our society and our lives.

Most often or not, Media and Government plays a crucial part. Take the example of the current recovery which started with leaking of Citibank and BoA CEO's optimistic internal memo about operational profits.

Since then, Gamblers has taken the center-stage in the financial world. All stock markets rebounded to new highs as if a new energy source has been invented or a mineral-rich highly fertile continent has been discovered. What boasted the market is that the rich has found ways and means to corrupt each and every-one of G-20 governments.

The rich may be from Manhattan, Monaco or Mumbai, they were pleasantly surprised to find that all politicians worldwide want to power and wealth, not for their country, not for the society they promised to serve; but for themselves.

So US,Western Europe, Russia, India & China reels under severe unemployment. Brazil is the only exception, because its president is a rare exception.

While US and Western Europe gives a technically correct (not morally correct or real) data on unemployment, India & China gives none what to ever. Money keeps floating to and fro between Tax heavens and Stock or commodity markets. Nobel Laureate Paul Krugman call for Simplified products and services went to deaf ears. Derivatives is still the king and this time around the complexity of the lie is much more. This time the governments are hand in glove with these economic terrorists (who run these too big to fail organizations).

From October 2009, a bunch of godforsaken analysts will start jumping up and down (or they will lose their jobs) singing joy in YoY figures, please remember that the base on which these matrices/ parameters are calculated were plummeting same time last year. The First case in Indian IIP (Index of industrial production) figures of August 2009. Every analyst conveniently forgot that IIP blipped August, last year. And the stock market soared.

Economic Recovery means improvement of life of all, by all and for all. And that my dear friend is not the case now.