President Trump: The NEW one and only politics thread

It's not last year's news, though. That interview with Kaplan was like an interview wiht Mr. Magoo. Although I actually think he's smarter than that. ... just full of shit or intentionally dishonest.

Their "not QE" repo operations have taken their sophistry to a new level. The amount of liquidity they have injected into the casino since September has been staggering -- and it correlates directly with their bubble reflating. They undid more than a year's worth of shrinking the balance sheet in about 3 months. The banks relying on those repo operations are now completely hooked, like heroin addicts. The money isn't for short-term funding, they borrow for nothing and they gamble with it, creating a euphoria feedback loop.

You can actually correlate the stock market moves (and bond yields dropping) to their buying overnight each day. Same as when they made an attempt to shrink the balance sheet in 2018, their bubbles all started to deflate at once -- and that was with them gingerly dipping their toe into the shallow end; what they have done now is dive headfirst into the deep end. They panicked and now are now all in and will take it as far as they can until they lose control. They know how it ends, and they know they are trapped, so they are making no bones about it anymore.

What they have done is criminal. About the only upsides are, fewer people than ever hold risk assets, so 1) when a lot of paper wealth evaporates in the blink of an eye and there are massive debt defaults, it won't hit as many everyday people hopefully, and 2) Trump has tied himself to their mess, idiotically taking credit for the DJIA 20 times a day, so if the crash happens before November, he hopefully won't be able to BS his way out of the blame (even though he has nothing to do with any of it, except to the extent that tax cuts were a sugar high, but which was offset by tariffs and trade wars which have hurt businesses) by blaming the Fed, which he has also been setting himself up for.

No matter how you measure it, we are in an absurd time -- we really have been for at least the last 7 years. I can roll off a lot of things about how earnings have gone nowhere in the aggregate in real terms since 2014, yet prices have blown up, multiples are at ridiculous levels on the amount of liquidity central banks are pumping into the casino. ... but consider this. ... 40 percent of listed US companies lose money. They are zombies reliant on borrowing more and more money. Look at what Tesla's stock has done since they began their "NOT QE."

This is what the Fed has created. That misallocation of capital itself -- survival of the unfittest -- is having economic effects that is costing us severely and will well into the future, because what they have done has been to pull at least a decade of growth forward -- rather than to let a nasty correction that they were responsible for in the first place happen.