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people thought they had a breakout going this AM, the


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#1 slupert

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Posted 28 June 2022 - 05:09 PM

data did not support a breakout, so with abearish divergence on the 4hr chart they slammed it. Maybe a little too much but could lead to a better setup for Thursday. We probably need anothe month to get a decent PCE number. So, Thursday, the question is will the muber be good enough to quell fears and allow the previous bottom to hold? I want to see what they do between 3:30 and 4 tomorrow, (JMHO)



#2 Rogerdodger

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Posted 28 June 2022 - 06:16 PM

Someone once said that in a bear market "buys" are actually "sells".



#3 slupert

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Posted 29 June 2022 - 07:00 AM

Someone once said that in a bear market "buys" are actually "sells".

I hear ya, not aggresive enough to push price higher, moe like sellers seizing the opportunity. Mester pulled the carpet out from Jay, giving a statement that was not consistent with last meeting, I bet Jay is tickled pink about that.



#4 pdx5

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Posted 29 June 2022 - 05:03 PM

Forget Mester. He is just 1 person in FOMC.

 

The real pressure on Powell is coming from elected politicians who are scared of losing their lifetime jobs

with mega benefits due to millions of voters feeling pissed off from the effect of 8.6% inflation (after paying taxes)

and 5.5% raises (fully taxable). 

 

Powell is between a rock and a hard place. If he does nothing, inflation continues.

If he does what is necessary to quell inflation, we get a recession.

There are no really good choices for Powell.

He looked bad in recent questioning by congress.

I saw many more wrinkles and bags under his eyes.


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#5 12SPX

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Posted 30 June 2022 - 08:35 AM

Inflation will just come down on its own even if they didn't raise.  In my view it's done, commodity prices are falling hard already...



#6 pdx5

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Posted 30 June 2022 - 06:05 PM

Inflation will just come down on its own even if they didn't raise.  In my view it's done, commodity prices are falling hard already...

What's the last time inflation came down on it's own?

The entire 4 years of president Carter had high inflation and it continued into Regan's 1st term.

Inflation is a vicious circle, it starts with price of oil and that gets built into transportation cost, 

and almost everything we buy has to be transported to stores or your residence. 

And workers have to drive to work. 

So long as oil remains in $100+/barrel territory, who will reduce price FIRST and take a loss?

And....there are 11+ million job openings and only 5.5 million unemployed workers available.

That will keep wages keep going higher. 

And finally I just heard on CNBC that corporations and people have record high cash right now!

Which is why airline passengers are at record high number and there is still shortage of new cars.

 

Even if Powell finds the courage to raise to 5% FED funds rate, it won't be enough to kill inflation.


Edited by pdx5, 30 June 2022 - 06:08 PM.

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#7 12SPX

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Posted 01 July 2022 - 08:17 AM

The problem with today's economics is that because of technology we moved to demand cycle inventories instead of building or lessening them as time went on.  For example it used to be if you bought a toaster off the shelf they would go to the back and grab a new one to put out and there would still be a few more to add.  In today's world as soon as that one sells, its reported to head office and a new one is shipped to the store the next day.  They don't keep large inventories anymore and because of all the shortage problems we've been having its not working.  We need to get back to having larger inventories once again.  Remember back in the day when we all anticipated inventory numbers to see if the economy was looking like it was going into a recession or an expansion.  If we get back to that , things will become normal again.  On inflation itself, although Senator Warren is an idiot in my view she did say something smart to Powell in his testimony.  She asked him will raising interest rates lower the price of oil or gas, he said no.  Will it lower the price of food, he said no.  He said we are raising rates to slow down overall demand and but because of record debt and mortgages in the end I don't think he can go crazy, especially with already falling stock market and cyptos, the slowdown will happen all on its own as this everything bubble slowly deflates.  Demand is already going down on its own.  Fed funds are already getting close to seeing a lowering of rates this winter instead of next year.  This inflation isn't due to rising prices its because of supply and as that gets under control in time, prices will come down on their own. 



#8 redfoliage2

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Posted 03 July 2022 - 02:01 AM

The best cure for high prices is high prices, the mechanism is working. The Fed should relax .

Edited by redfoliage2, 03 July 2022 - 02:08 AM.