I could be wrong of course but, I think this is it; this is when the Federal Reserve finally pulls the plug on the life support it's been feeding the economy now for quite some time.
There are plenty of explanations about the timing but it really doesn't matter which theories are right or wrong, the results will be the same: Bad.
Still, there are those who claim the Fed would never withdraw support in a way that would harm the overall economy but that is false. They have done it before several times and each time more wealth and power was conferred to the establishment so, why not do it again?
“We are now at that stage again where price inflation tied to money printing is clashing with the stock market’s complete reliance on stimulus to stay afloat. There are some that continue to claim the Fed will never sacrifice the markets by tapering. I say the Fed does not actually care, it is only waiting for the right time to pull the plug on the US economy.”
Speaking for myself I've been expecting this for some time and many who read my blog know that; however, the timing is up to the wise guys who run the show and very few of them are talking. When they do speak they say things that are just plain untrue:
"The FOMC publishes economic forecasts each quarter, which usually are worthless. Consider the successive last four quarterly (Dec 2021, Jan, Mar and Sep 2022) FOMC Meeting forecasts as to where the year-to-year Fourth-Quarter 2022 GDP growth would end-up: December 2021 FOMC forecast was 4.0%, March 2022 FOMC dropped it to 3.4%, June 2022 FOMC dropped it to 2.8% and today’s September 2022 dropped to 0.2%."
The Federal reserve claims they need to raise rates to "fight inflation", the same inflation they claimed had "peaked" in June lol! Now they claim we have inflation because of how great the economy is and they need to "cool it down" - I call BS!
"Today’s FOMC rate hike of 75 basis points was as expected, with more rate hikes promised, all designed to intensify an already ongoing but not yet formally recognized “Recession,” in hopes of killing extraordinary inflation pressures.Yet, those inflation pressures are driven by explosive Money Supply growth and various Pandemic issues, not by the Fed’s “overheating” economy scapegoat, where the economy already is in recession"
So the Fed is "fighting" inflation caused by their OWN money printing, not an overheating economy which is rolling over. Walmart, Target, Kohls, JC Penny and many other big stores are cancelling Billions in orders right before Christmas season, why??
"Walmart, Target, Macy’s and Kohl’s are among retailers that have recently said they are canceling some orders to better balance inventory levels, a replay of a strategy used at the start of the pandemic."
These events weren't hard to see coming and what happens next is pretty clear as well: Pullback across the board until the dust settles and the Fed stops hiking.
Now what?
Call me if capital solves your immediate needs. Many owners are actively seeking short term capital and well they should, the cost is cheap compared to the advantages gained by having critical capital when you need it on call!