Federal Reserve

“Hope,” “Change,” the Donald, and the Fed

By David Stockman  |  October 30, 2018

“If the Fed backs off and starts talking a little more Dovish, I think we’re going to be right back to our 2,800 to 2,900 target range that we’ve had for the S&P 500.”

That’s the bubble-blown wisdom of Scott Wren, a guy from Wells Fargo (NYSE: WFC).

Wells Fargo, of course, is the bankster’s bankster, an emblem of just about every flawed – dare I say felonious? – practice sprung by monetary central planning.

But he’s social-media-famous today, courtesy of our Tweeter-in-Chief.

So, the Donald hopes the Federal Reserve changes course…

We haven’t even gotten back to “neutral” yet. It’s still “accommodative.”

That’s according to Fed Chair Jerome Powell, the guy our self-proclaimed Low-Interest-Man-in-Chief appointed to succeed the easy-money acolyte he hurried out the Eccles Building ASAP post-inauguration.

But – justlikethat – “hope” and “change” are doing all the work again.

But – justlikethat – markets are back in the green. Market yields are softer.

Fear is off its highs.

Probability markets that track the likelihood of future rate hikes by the Federal Reserve are showing some signs, however slight they may be…

But – MAGAirony of MAGAironies – the Donald’s “great disruption” may turn out to be the “reabnormalization” of monetary policy, reflation, and Bubble Finance Forever.

In other words, the Donald is Obama is Bush Jr. is Clinton is Bush Sr.…

Wall Street’s home to the dumbest of the mules…

Yesterday, the Dow Jones Industrial Average “swung” a total of 918 points – at the intraday high it was up 352 points, at the intraday low it was down 566 points. It closed 245 points below where it opened.

Today, the Dow ran up 274 points. It’s backed up 181 points but is actually off the afternoon lows…

It’s about 9% from the all-time high it hit on October 3. “Selloff”… “correction”… call it what you will. Sure, inquire as to Bubblevision’s views…

It’s crazy.

There is now no stopping the Mother of All Yield Shocks. It will lay waste to bubbles strewn throughout the Acela Corridor’s system.

That includes Imperial Washington.

November 2016 was about unintended consequences. So is November 2018.

Both campaigns exposed real-world, Main Street reactions to dangerous, unstable excesses the Fed and other central banks have fostered during decades of money-pumping.

We’re in the octogenarian phase of the most concentrated economic “recoveries” on record. That means, in addition to being historically soft and weak, it’s now historically old and decrepit, too.

We’re standing on the cusp of the abyss, a Fiscal Debauch at a time of “quantitative tightening” while interest rates rise as winds of Trade War swirl…

A market this confused is no place to be right now.

Former White House Budget Director: 50% Crash Coming!

The horrible start to October has investors on high alert. This market bubble – inflated by the Fed’s low interest rates and Republican tax cuts – may have finally run its course.… Read More
David Stockman

David Stockman is the ultimate Washington insider turned iconoclast. He began his career in Washington as a young man and quickly rose through the ranks of the Republican Party to become the Director of the Office of Management and Budget under President Ronald Reagan. After leaving the White House, Stockman had a 20-year career on Wall Street.MORE FROM AUTHOR