Financial thread

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The Fed changed their repo policy today and ...........

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The Fed just announced that they are surprised about how high the current level of inflation is. Go figure. It is, of course, understandable that they didn't expect it, given the tremendous rise in commodity prices over the last year. When you cut the value of your fiat currency, prices in the shops are bound to rise.

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The Fed are clueless.

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In the Money section of today’s Sunday Times, they featured Dale Vince (Forest Green & Ecotricity owner) in the Fame & Fortune slot where they ask a famous person about their finances...interesting sort of fella, they reckon his firm is worth £100m

But on the facing page was a piece about investment platforms and how they each offer different things to different types investors...and within the article was a picture of a 67 year old Andy Ford (Stones manager 2010/11) speaking of how he’s switched from HL to Interactive Investor in order to cut the cost of standing charges (‘I saved thousands by switching platforms’) - think he lives locally still, Bearsted possibly

[porkystone]

Sept 12, 2021 22:13:12 GMT pwe said:

But on the facing page was a piece about investment platforms and how they each offer different things to different types investors...and within the article was a picture of a 67 year old Andy Ford (Stones manager 2010/11) speaking of how he’s switched from HL to Interactive Investor in order to cut the cost of standing charges (‘I saved thousands by switching platforms’) - think he lives locally still, Bearsted possibly

Shame he wasn't more adept at switching formations & motivating players ?

[Deleted]

😂😂👏

[porkystone]

Sept 13, 2021 8:41:56 GMT pwe said:

😂😂👏

In the excellent ' Exodus ' book by Fred there is an extremely funny anecdote on the Ford era relating to his first half time team talk as manager of 'stone. Won't repeat it here 'cause it involves extremely poor language, but it is worth digging out.

[Deleted]

CGR where have you been ?

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BTC on a bit of a tear, nearly 62k just now, will it make a new this weekend (>65) ?

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Is BTC on a tear because of inflation? Seems to be more of a hedge than gold or silver.

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As much as it pains me, and fwit, I reckon that those who say bitcoin is a wholly speculative bubble, have probably got it about right;
there again, what’s the definition of a bubble if not an asset, increasing in value, in which one had no stake?;

not to say it can’t be a store of some value, and as you point out, short term at least, it’s had a lot more upside than gold

[Deleted]

I am worried about the Chinese economy and the world economy.

We are in the everything bubble and the tear that BTC is on is a flashing red light showning it is another bubble "asset".

[Deleted]

Oh well, looks like inflation is not going to be transitory after all. Who would have seen that coming. On the surface it seems to have been a surprise to the Fed, and other lesser central banks.

But the Fed has once again pulled the wool over the majority as, on one big side of the equation, inflation would go a long way to reduce the debt. In addition, despite the markets fear of rising interest rates, there is still excessive derivative exposure in the global markets (they never learn, or maybe just don't care), so any risk to the housing or financial markets, perceived or otherwise, would be a no no for the Fed. They are treading delicately with tapering announcements, so their approach to interest rate rises will be even more tentative.

The gap between the rock and a hard place seems to be diminishing drastically. Historically the Fed's solution is quantitative easing as the go to, and I see no other solution to avoid hitting the big brick wall in front of them. They tried to raise interest rates in the past, admittedly in an increasingly low inflation environment, and they had to back down, and reduce interest rates fast. This time inflation is rising (due to unprecedented QE), the pandemic is threatening the fragile global recovery, and don't forget the Fed have to look after the banking cartel. Maybe this time we will finally see a little yield curve control if bond yields continue to rise. Who knows?

Despite precious metals being totally out of favour over the past year or so, the environment for their attraction seems to continue to increase. Now I am not talking about investment in OEIC or ETF funds that are related to precious metals, as they are part of a fiat monetary system that is not entirely safe. As an insurance policy, should the brown stuff hit the fan, holding some physical metals could be a prudent move. Sure there is a premium to pay over the spot market price for owning them, however that would be irrelevant should the fiat monetary system collapse, as physical Gold and Silver would hold their value. Although I am not entirely confident of it, I can also see some cryptos holding their value, particularly if more countries like El Salvador escape the manacles of the US dollar. Somehow though, I can still see big central banks interfering in some way.

As for the stock markets it is interesting to see Utility ETFs (XLU etc. on investing.com) are on the rise, never a good sign for stock markets, however the transportation index (DJT on investing.com) is holding up well, and 20+ year Treasury bonds (TLT on investing.com), although rising overall, are not exploding to the upside yet. All three are useful to keep an eye on to help to see where the market is going. If Utilities and Treasury bonds rise fast, while the Transportation index drops sharply, look out below.

I've had my rant.

Caveat Emptor.

[Deleted]

Where have you been?

Thanks I don't think the Fed can raise interest rates above 2% without the markets going into meltdown.

Central banks have a narrow landing strip to try and save the Global economy.

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I've got to admire the way in which the Fed releases information in order to manipulate stock market movement. Early last week, just as the US, UK and European markets were about to rally, news came out that the Fed would probably have to raise interest rates, and reduce it's asset holdings earlier then expected, due to a tight labour market and persistant high inflation.

The resulting stock market reaction to this news was to sell off strongly over the next few days, particularly Tech stocks, however the inverse effect of this was to see a strong rise in bond yields and the associated strong spike in financial stocks. Nice little earner there.

The S&P 500 went down to bounce around it's long term rising trend support level, and it looked like the support was not going to hold, that is until J Powell's rhetoric yesterday, which, almost predictably, calmed the markets down, and the US markets duly rallied in the US. This bullish sentiment has continued in Asia and Europe today.

We should be ever so grateful, as once again the Fed has saved the day for us all.

Talking of manipulation, and taking advantage of a situation, I have heard on the animated cartoon grapevine, that Peppa Pig has taken out a huge loan, amounting to several million pounds, by way of a few tranches, from her pig shelter development business, at, may I say, a very low nominal interest rate (under 1%). Apparently this loan was used in order to buy and redevelop her own, very desireable abode. All in order I suppose.

Well done Peppa, and good luck in all your dealings. However, I think you have missed a trick there. Wouldn't it have been better to have taken advantage of brexit, and the elimination of any EU restrictions attatched to tax efficient offshore investments, and the glorious investment opportunity that the pandemic has offered, by investing the loaned money into offshore investments. You could have been quids in, and at least doubled your investment, and paid back the loan along with the paltry interest back to your pig shelter business. Come on, you know it would have made sense Peppa.

Now, going of on a completely wild tangent, I would like to congratulate Jacob Rees Mogg for speaking out against Rishi Sunak’s intended rise in National Insurance. What a guy.