{"id":1091315,"date":"2018-12-20T19:47:31","date_gmt":"2018-12-20T19:47:31","guid":{"rendered":"https:\/\/dailyreckoning.com\/?p=106386"},"modified":"2018-12-20T19:47:31","modified_gmt":"2018-12-20T19:47:31","slug":"who-will-be-left-to-buy","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1091315","title":{"rendered":"Who Will Be Left to Buy?"},"content":{"rendered":"

This post Who Will Be Left to Buy?<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

The Dow Jones was up some 300 points yesterday when the sirens wailed at 2 o\u2019clock sharp… and Jerome Powell pickled the bomb switch.<\/p>\n

When the all-clear sounded at 4 p.m., the index was down 352 points. In all, the Dow swung 900 hair-raising points yesterday.<\/p>\n

Markets emerged from their shelter this morning to take a look around \u2014 and survey the damage.<\/p>\n

Still shaken, still rattled\u2026 they broke under the strain of it all.<\/p>\n

The Dow Jones hemorrhaged another 464 points today, to 22,859.<\/p>\n

The S&P fell 39, while the Nasdaq tumbled another 108.<\/p>\n

85% of S&P stocks have now suffered a correction of 10% or more. 60% are in bear markets \u2014 down at least 20%.<\/p>\n

And the Nasdaq is now within 2% of a bear market.<\/p>\n

In all, Wall Street is sunk in its worst December since 1931.<\/p>\n

\u201cNow the entire bull market trend is looking to fall apart with a devastating bear market to come,\u201d panics analyst Sven Henrich.<\/p>\n

\u201cThe ghosts of 2007 are all around us,\u201d he warns.<\/p>\n

But we ignore the menacing spectral omens for the moment\u2026 and return to yesterday.<\/p>\n

We explained yesterday<\/a><\/strong> that the rate hike may have pushed the Fed\u2019s benchmark rate above the \u201cneutral\u201d rate of interest.<\/p>\n

That is, rates may now depress rather than stimulate.<\/p>\n

But it was not the rate hike itself that filled the bomb shelters yesterday afternoon.<\/p>\n

The market had largely anticipated the hike.<\/p>\n

It was rather Mr. Powell\u2019s post-announcement statement about the Fed\u2019s balance sheet:<\/p>\n

\n

We thought carefully about how to normalize policy and came to the view that we would effectively have the balance sheet runoff on automatic pilot\u2026 I think that the runoff of the balance sheet has been smooth and has served its purpose… I don\u2019t see us changing that.<\/em><\/p>\n<\/blockquote>\n

The Dow Jones plummeted over 500 points as Mr. Powell spoke.<\/p>\n

Former colleague David Stockman explains why:<\/p>\n

\n

The clear-and-present danger to the greatest financial bubble in modern history is the fact that Powell affirmed without hesitation that the Fed will proceed \u2014 on automatic pilot no less \u2014 to drain [its balance sheet].<\/em><\/p>\n<\/blockquote>\n

Since October last, the Federal Reserve has run some $365 billion off its balance sheet.<\/p>\n

It expects to carry on the business at a $50 billion monthly clip through 2020.<\/p>\n

Thus it appears that David is correct.<\/p>\n

The Federal Reserve has abandoned its nearly decade-long defense of the stock market.<\/p>\n

It was up on the rooftops year upon year, manning the flak guns, filling the sky with metal at the first sight of marauders.<\/p>\n

Now markets feel abandoned \u2014 or worse.<\/p>\n

It\u2019s as if the Fed has thrown aside its guns, turned its coat\u2026 and went over to the other side.<\/p>\n

Now it\u2019s the one dropping the bombs on Wall Street.<\/p>\n

Wonders Michael Snyder of The Economic Collapse blog:<\/p>\n

\u201cIs the Federal Reserve actually TRYING to cause a stock market crash?\u201d<\/p>\n

More:<\/p>\n

\n

It is insanity to raise interest rates when stocks are already crashing, but the Federal Reserve did it anyway\u2026 All of the economic numbers tell us that the economy is slowing down, and on Wednesday Fed Chair Jerome Powell even admitted that economic conditions are \u201csoftening\u201d… They know that higher rates will slow down the economy even more, but it isn\u2019t as if the Fed were divided on this move. In fact, it was a unanimous vote to raise rates. \u00a0<\/em><\/p>\n<\/blockquote>\n

In conclusion:<\/p>\n

\n

They clearly have an agenda, and that agenda is definitely not about helping the American people.<\/em><\/p>\n<\/blockquote>\n

An agenda? But what?<\/p>\n

Whispers circulate that the unanimous vote was calculated to deliver a political message…<\/p>\n

Trump raged and thundered against a possible rate hike, blackening Jerome Powell\u2019s good name in the process.<\/p>\n

So they intended to read the president a severe lesson in \u201cFed independence\u201d \u2014 to show him who\u2019s boss.<\/p>\n

We\u2019ve issued our agents urgent instructions to investigate the rumors\u2026 and report back immediately.<\/p>\n

Meantime, the bombers are closing in on Wall Street again\u2026<\/p>\n

Fourth-quarter earnings season is underway.<\/p>\n

Corporations are generally not allowed to conduct stock buybacks ahead of earnings season \u2014 lest they be accused of acting on inside information.<\/p>\n

Buybacks provided much of the helium that has lifted markets to such dizzied heights.<\/p>\n

Corporate buybacks, in fact, represent the largest source of demand for U.S. stocks.<\/p>\n

But we are told that 75% of the S&P will be \u201cunder blackout\u201d by Dec. 26.<\/p>\n

That is, 75% of S&P components will be unable to buy back their own stocks for a good month or so.<\/p>\n

In conclusion…<\/p>\n

The Fed has abandoned Wall Street, investors are fleeing for their lives\u2026 and 75% of the S&P will soon be unable to buy back their stocks.<\/p>\n

Who will be left to buy?<\/p>\n

Regards,<\/p>\n

Brian Maher
\nfor The Daily Reckoning<\/em><\/p>\n

The post Who Will Be Left to Buy?<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This post Who Will Be Left to Buy?<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

“The ghosts of 2007 are all around us”…  Is the Fed deliberately trying to sabotage Trump?…<\/p>\n

The post Who Will Be Left to Buy?<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[484,366,716,467],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1091315"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1091315"}],"version-history":[{"count":1,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1091315\/revisions"}],"predecessor-version":[{"id":1091316,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1091315\/revisions\/1091316"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1091315"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1091315"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1091315"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}