EVERYTHING IS AWESOME

Fed Liquidity Is Bullish Until It’s Not

Both Geoffrey (Classical Economist, with whom I work in support of EDGE clients) & I respect TheFedGuy, Joseph Wang.

But on this recent market call Joseph made, we are more than skeptical.

“The shock in equity markets last week is more likely a correction than a trend change as the trajectory of monetary and fiscal policy is turning increasingly accommodative.

The Fed looks to cut rates this December as well as resume its balance sheet expansion to dampen repo rate volatility. Trump has been moderating his policy stances in response to poor poll numbers, and looks to exercise all executive influence to stimulate the economy…”

Joseph is an expert on the Fed. Geoffrey is an expert on credit markets. And it is exactly this fight - Fed Liquidity & Easing vs Credit Quality & Inflation - that needs a proper debate.

Let me cut to the chase: Geoffrey fully expects the falling disposable income and consumer lending slowdown to translate harshly for stocks next year - regardless of Fed actions. Let’s dig into why…