Is free money ever a good thing?
Free money for all even those that don’t really need it. Even people that never lost their jobs or loss in income get stimulus checks not only for themselves but for their children as well at a time when household wealth has never been higher.
GDP estimates for 2021 keep being raised as we are witnessing the biggest recovery free money can buy. Yet not even the largest GDP growth figures in 55 years will stop central bankers from injecting more liquidity. They know they can’t stop, they can’t even hint at stopping. Hence Christine Lagarde felt compelled to accelerate ECB bond purchases this week in response to rising yields, which she called a threat to the economic recovery.Irony is dead. Yes, the bond market is sending a signal of rebellion raising the prospect that the long presumed dead consequences of all these interventions could be making their presence felt. It’s been said that too much of a good thing can be a bad thing. I submit there has been no scientific process by which central bankers and politicians globally have decided what the right amount of liquidity is to support the recovery. Rather I submit it’s been and continues to be way too much and it’s distorting everything and a sudden velocity driven bond market in the form of accelerated rising yields is indeed a clear and present danger to the enormous debt and valuation construct that has been unfolding.the pressure to intervene continues and the Fed is on the hook this coming week. The latest interventions this week enough for markets to ignore the latest spike to new highs in yields for now. Yet the bond beast remains angry and demands appeasing.And so the Fed and other central banks are boxed in the trap of their own making. Markets are approaching this week with not only the highest valuations and equity allocations in history but also with dramatic chart extensions the extent of which we have never seen before in some cases. The problem with all this should be self apparent: We are rapidly approaching the point of peak liquidity. We are unlikely to see such a forceful combination of both monetary and fiscal stimulus again. On the political front the ability to push a 4th stimulus package through is running against a key reality clock: The next Congressional election in less than 2 years. It may give Democrats enough time to push through a new stimulus package and/or infrastructure plan but given the composition of its own caucus the party may find the next package much harder to push through compared to this week’s stimulus package, especially since the deficit this year is now on pace for a record $4 trillion following last year $3.1 trillion during Republican control. That’s $7.1 trillion in new debt in 2 years.This coming week then will come at an interesting time: Can new highs be sustained with the help of an again accommodative Fed, or will these new highs fail, perhaps driven by a disappointed bond market sending yields even higher setting up for a potential double top in the most one way oriented market in sentiment, valuation technical disconnects and equity allocations in history?Lest not forget that the last time we saw tech suddenly correcting and seeing a weaker bounce for lower highs was precisely during that infamous March 21 years ago.
GDP estimates for 2021 keep being raised as we are witnessing the biggest recovery free money can buy. Yet not even the largest GDP growth figures in 55 years will stop central bankers from injecting more liquidity. They know they can’t stop, they can’t even hint at stopping. Hence Christine Lagarde felt compelled to accelerate ECB bond purchases this week in response to rising yields, which she called a threat to the economic recovery.Irony is dead. Yes, the bond market is sending a signal of rebellion raising the prospect that the long presumed dead consequences of all these interventions could be making their presence felt. It’s been said that too much of a good thing can be a bad thing. I submit there has been no scientific process by which central bankers and politicians globally have decided what the right amount of liquidity is to support the recovery. Rather I submit it’s been and continues to be way too much and it’s distorting everything and a sudden velocity driven bond market in the form of accelerated rising yields is indeed a clear and present danger to the enormous debt and valuation construct that has been unfolding.the pressure to intervene continues and the Fed is on the hook this coming week. The latest interventions this week enough for markets to ignore the latest spike to new highs in yields for now. Yet the bond beast remains angry and demands appeasing.And so the Fed and other central banks are boxed in the trap of their own making. Markets are approaching this week with not only the highest valuations and equity allocations in history but also with dramatic chart extensions the extent of which we have never seen before in some cases. The problem with all this should be self apparent: We are rapidly approaching the point of peak liquidity. We are unlikely to see such a forceful combination of both monetary and fiscal stimulus again. On the political front the ability to push a 4th stimulus package through is running against a key reality clock: The next Congressional election in less than 2 years. It may give Democrats enough time to push through a new stimulus package and/or infrastructure plan but given the composition of its own caucus the party may find the next package much harder to push through compared to this week’s stimulus package, especially since the deficit this year is now on pace for a record $4 trillion following last year $3.1 trillion during Republican control. That’s $7.1 trillion in new debt in 2 years.This coming week then will come at an interesting time: Can new highs be sustained with the help of an again accommodative Fed, or will these new highs fail, perhaps driven by a disappointed bond market sending yields even higher setting up for a potential double top in the most one way oriented market in sentiment, valuation technical disconnects and equity allocations in history?Lest not forget that the last time we saw tech suddenly correcting and seeing a weaker bounce for lower highs was precisely during that infamous March 21 years ago.
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pennypincher : nobody needs it. people who havent lost there job like me are still struggling the same as always and the people that did are making more on unemployment then they were employed. this was nothing more then the payoff for the dems after Georgia and payoff and bailout for pet projects and there fucked up states. if that's not enough the repercussions are going to force people to accept government control a move towards socialism. prices going up and they are not coming down when your 1400 is gone. your kids and your kids kids will never understand why we sold them out.
DEADSEED1111 : "Don't ever trust a handout because then they think you owe something"
My grandfather... RIP
DEADSEED1111 Mcsnacks H Tupack OP :
..... enough said
Phyrevixen DEADSEED1111 : Don’t ever trust me when I say I will only be 5 minutes to run into Sephora to grab 1 thing.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
DEADSEED1111 pennypincher : As a business owner of An electrical contracting company who was refused a ppp loan and the eidl grant and was forced by Colorado DORA to lay off all my 5 apprentices and half 2 of my licensed guys and does only Heavy commercial industrial jobs all I can say is that..... ME AND MY WIFE NEVER CASHED THE STIMULUS CHECKS WE'RE FRAMING THEM ... I also payed my guys mortgages and bills for 2 months each with my own cash and never disputed their unemployment requests and now I'm a two man shop with my guys helping pay my mortgage from their unemployment because I wouldn't even take the forbearance and they are happy to help.... circling back, not getting or taking government help relieves me of any interest on the loans offered and gives me major tax breaks... did all this crush my company, yes, did it eat my money, yes, will I be able to recover, yes, with a little hard work.... I hold my head high as an American not taking or getting any financial aid... hence my page phrase... DIRTY HANDS AND EMPTY POCKETS .... good to you and all working people out there that didn't want it and don't need it... keep the nose on the grindstone buddy...
STD0313 DEADSEED1111 : really not trying to come out the side of my neck....I here every one of your concerns.....and they are all ones any guy who care for someone else would feel....and please this is really none of my business but under the guidelines for the stimulus that I know of (maybe different for a business) but it seems to my the possibility of your taking home as a couple less then 175k a year just doesn't feel right anyway.....and please man kinda just asking how can you blame a system for helping people who can't even afford to eat that somehow end up sending payments to people in financial situations that absolutely don't need them.....one final question also......I very very much appreciate you and your wife not chasing those checks but it would also once again seem to me that anyone running a business or even someone who auto files or files through an Accountant would even receive a paper check to not cash......if I am wrong I accept an assumptions I have made as such and apologize in advance....
STD0313 DEADSEED1111 : I final thought....once again I should proof read and not do this while I am so stoned....again sorry
Mcsnacks H Tupack OP STD0313 : Maybe they have 10 kids. Having a business wouldn’t stop them from receiving a stimulus then.
pennypincher STD0313 : unemployment was given to everyone that lost there job plus a extra 400 a week on top of that. how do they make more money per month but can't afford to eat. nobody but the business owners got screwed over from the pandemic. and of all those that did loose their jobs if they really wanted to work there was work out there but why would they if the government was going to pay them more to stay home
DEADSEED1111 DEADSEED1111 : furthermore I want to say I am for helping out the little guy, for a brief six months I wasn't the little guy no more so to speak but when I got disqualified for any help at all to pay my guys and legit business expenses when everyone with a brain knew that some of this free money was gonna be pissed away or squandered by big corporations and people that didn't need it I made damn sure that my guys were taken care of regardless of what it cost me, they were the ones that made it for me for those six months... so in short I am proud I am still surviving with only tax breaks on less money made now, I have respect for the ones that are on the grind everyday, I hate that they have basically created an unemployment monster that the ones grinding gotta pay for from now on, and I feel bad for everyone that this has crushed financially, I will always have un cashed stimulus checks for my kids to know mom and dad didn't want or take the handout .... and FYI I still smoke weed friend ... I hope that this post will ease any tension my previous post may have caused
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