Fallout From the Fed Not North Korea Shocked the Markets – Ep. 129

Fallout From the Fed Not North Korea Shocked the Markets – Ep. 129


* Well the Dow Jones got clobbered again today, down 252 points at the close
* The NASDAQ down about 55
* The transports continue to get clobbered down another 146 points, decisively in bear market territory
* CNBC blamed the entire decline on jitters over North Korea's hydrogen bomb test
* I admit that this prospect is not good, but I don't believe that announcement was the reason for the decline
* The real problem is the Fed removing the monetary herion from the addicts on Wall Street and this is the withdrawal
* Former President and CEO of the Federal Reserve Bank of Dallas, spoke on CNBC yesterday and he admitted that the Fed "engineered a stock market rally"
* They wanted all this phony wealth to cause us to make irrational decisions
* That's what happened during the dot com bubble and to a greater extent during the housing bubble
* Here you have it from the words of a former Fed president, a voting member who voted for QE 1 & 2 who is saying that the Fed did this to create a "wealth effect"
* He even said, don't be surprised if the market goes down 20% - it's still overvalued - he admits the Fed was propping it up
* Obviously if the Fed removes the props the market will go down
* After Simon Hobbs asked Fisher if he is going to apologize, he said," Don't blame me, I voted against QE3!"
* He is throwing his colleagues, including Janet Yellen, under the bus
* Now that he is no longer at the Fed, he refers to it as a "giant weapon that is out of ammunition"
* The Fed still has ammo: cut rates (in this case, even to negative) and QE4, their big bazooka
* There's plenty of ammo left and it will be fired a lot sooner than people think
* Korea is an excuse, but Richard Fisher is letting the cat out of the bag, but no one in the media is picking up on this
* Also in the markets today, while stocks were going down, gold was going up - gold hit a 2-month high today
* As fast as it is going up in dollars, it is going up even faster in other currencies, like the Canadian dollar, which hit a 9-year low, the Australian dollar
* The yen was up - the dollar/yen is breaking down - to me that is a very scary proposition for the markets to see this strength in the Japanese yen
* Oil prices continued to drop, down another $2 today - we're trading below $34
* Gold stocks were up - you'd think they would be up a lot more because mining costs are plunging and revenue is going up, but Wall Street is oblivious to the bargains that exist in the mining stocks
* We got a lot of economic news today and most of it was, as is typically the case, bad
* Yesterday vehicle sales were at a 6-month low
* Last year was a record for auto sales, but December was a 6-month low despite all the Christmas giveaways
* Meanwhile the inventory to sales ratio continues to rise - a new high since the 2008-2009 great recession
* Also GM got clobbered today, down about 4% - already down 9% for the year and down more than 20% from its 52-wk high - that is a bear market
* This is telling me that the auto bubble has popped
* There are going to be a lot of layoffs in the auto sector - good, high-paying jobs
* I have said that starting in January 2016 we would start to see layoffs because the numbers have been horrible
* Sure enough, Macy's today announced a restructuring, laying off thousands of workers because of disappointing sales throughout the year
* We will see a huge blow-up in the securitized market for auto loans
* They layoffs are coming - the low unemployment number is the rear view mirror
* Looking at the actual economy in the windshield is a disaster for jobs
* This is deja vu - in 2008 the subprime market had already exploded - the housing market problems should have bee... Our Sponsors: * Check out FRE and use my code LISTEN20 for a great deal: https://frepouch.com * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

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SchiffRadio Podcast Episode 11

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SchiffRadio Podcast Episode 7

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SchiffRadio Podcast Episode 6

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