A very uncertain market
If the banks are wobbly...
I guess I was bored and wanted to see what the Elliottwave and Market Thinker, Robert Prechter had to say and saw he raised his price to $37 a month with a three month commitment I think. So I guess people are worried and willing to pay for his insight. In the scheme of things, $37 is not that much and I encourage you to read his thoughts. But for me, I guess I get entertainment in hearing diverse opinions so I need to watch my budget a bit more than other people.
Yes, market watching and investing is a hobby. And you know what, it shouldn’t be. The investment part should be there just to make money and get on with your day. And I think I’m doing better at that, but the thinking part is the real hobby to battle my mental capacity against others. As such, I wasted a few hours thinking about Carl Icahn, banks, interest rates, and what part of the cycle are we in. Is it like the past 50 years? Or is something more devious about to awaken?
That’s the hobby part. What does it matter? It’s beyond my pay grade. Yet! that type of thinking gets you trapped into doing the same thing over and over again even if it will dig a deeper hole for yourself that you just don’t know about. I guess the hobby part is defining or being alerted to what is known as a high standard deviation event, or black swan.
I read a lot of Twitter and news reports and nowhere do people act from a viewpoint that the Fed has insight and is actually making the right decisions. What if higher rates are being stubbornly pushed through for a non-standard event even if banking suffers? Like a war…
The US has printed and shipped out a lot of money to Ukraine. There is a lot of war talk and painting the enemy in shades and colors that only a war can overcome. And if a true war does occur, the Western governments will print a lot of money as a result. So maybe the Fed is preparing for that? Adam Smith in his great masterpiece on economics discusses how currencies were always debased in times of war
Adam Smith observes that the true costs of war remain hidden from the taxpayers because they are sheltered in the metropole far from the fighting and instead of increasing taxes the government pays for the war by increasing the national debt
read the excerpt here
In the excerpt is another pointed commentary “most people put up with slightly higher taxes in wartime in exchange for the "amusement" of reading about imperial exploits, little realizing that the true cost of war has been added to the national debt.” This is where we are now on Twitter and new sources. The Fed may seem not to be amused. The Treasury department, FDIC, and the administration also need to handle and manage the banking crises. Yet, they are applying principles of engagement that appear to be foreign to bank crises in the past and give the impression of anti-capitalist policies that is not positive for the way the economy has been run and managed.
Everything is seems to be aligned for a deflationary event, something opposite to last year because if banks are collapsing and tightening up, it will take awhile until the credit market finds a new dynamic for lending. Furthermore, since bank investors and bank lenders, are going to require more income and more of a discount and probably more clarity on business practices before investing in them. No one enjoys seeing their investment go to 0; especially when you thought you invested in something conservative and it’s not a ponzi scheme!
Currently, it does seem the most boring investments may be suitable currently
US Dollar and Bonds
When people sell, they need Dollars. And interest rates are paying something now.
I always believe you need some stocks stuffed away, and there are always a good trade daily to participate in. But I think knowing you have Dollars and some Treasuries will make you calm. And calm = bliss.
