In The News
The news is mostly “Gloom and Doom”, if you listen to the folks who were instrumental in blowing up all the bubbles in the economy. Sure, the FED was the main player, but the countless other players happily went along for the ride.
Traders Who ‘Just Want to Survive’ Sit on $5 Trillion Cash Pile
From stocks to bonds, credit to crypto, money managers looking for somewhere to hide from the Federal Reserve induced storm battering virtually every asset class are finding solace in a long reviled corner of the market: cash.
Investors have $4.6 trillion stashed in US money-market mutual funds, while ultra-short bond funds currently hold about $150 billion. And the pile is growing. Cash saw inflows of $30 billion in the week through Sept. 21, according to figures from EPFR Global.
Sound familiar, of course it does. I have been preaching safety for some time.
“I don’t think it’s time to be a hero,” said Barbara Ann Bernard, founder of hedge fund Wincrest Capital. “The reason I have as much cash as I do is because I just want to survive and end the year up. This is going to be a tricky environment for a while.”
Stock Market Gloom ‘Worse Than Ever’ As Fed Signals It May Keep Tightening Until Recession
Fed officials on Thursday reiterated calls for aggressive policy to combat stubbornly high inflation—fueling expectations for bigger rate hikes amid a stock-market selloff that’s seen major indexes hit new lows for the year—and some analysts project that the losses could only deepen. - Forbes
In a speech on Thursday, St. Louis Fed president James Bullard issued a similarly hawkish call, saying it “does look like” the Fed is expecting a “fair amount of additional moves this year” to put “meaningful” downward pressure on inflation.
In a note, Morgan Stanley analyst Michael Wilson said the firm remains “convinced” that the S&P will hit an eventual low of between 3,000 to 3,400 points later this year or early next, suggesting it could still plunge another 7% to 18%.
(I think it could plunge 20% to 30%, easily)
Amazon to Close 4 of its 5 US Call Centers, Shifts to Work-from-Home, after Closing 44 Warehouses, Halting Construction on 7 Office Towers
Amazon, which booked net losses in Q1 and Q2 totaling nearly $6 billion and whose shares are down 38% from their high in July last year, is undertaking large-scale efforts to cut costs – including commercial real estate costs. It is closing or cancelling 44 warehouses across the US; it’s halting construction on six office towers, and won’t start construction on a seventh. And now it emerges that it plans to close four of its five call centers in the US and switch those customer service representatives to working from home.
Safety, Safety, and More Safety!
It is not wise to drive a car until it runs out of fuel, when all one has to do is take the needed steps to complete your journey.
