What's the U.S. stock market going to do on Monday?

Anyone who's paying attention? Janet Yellen was the one who spent the first 9 months of this year hinting at a rate rise. And of course it didn't happen. If you paid attention to her 5 months ago, the overnight rate was definitely being raised! She simply managed to confuse the hell out of everyone with her silliness -- will she, won't she. All this nonsense over 25 freaking basis points.

I was paying attention. While markets -- and pundits -- were first predicting an increase in March, then June, then September, etc. ... based on what she (and the other FOMC governors) were saying. ... anyone who was ACTUALLY paying attention to what they have done over the last 9 years, knew that it is way more likely we will see QE4 from her than her ever willingly letting the overnight rate increase even one basis point. It's a one-way street with them. It's been 9 years since they have raised the overnight rate! Not to mention their asset buying when they ran out of room to suppress rates. They exist simply to distort our markets and prop up risk assets. Encourage borrowing, and punish savers.

Now, they've been reduced to trying to keep the trillions upon trillions of public and private debt they have single-handedly created from crashing down. This is what happens when a soviet-style central planner subverts all price discovery in a market. In this case, taking the risk out of the lending equation, and making it so people can borrow for nothing and gamble away with the money, or buy homes they could never afford or get subprime auto loans, and on and on.

What a joke. We were talking about 25 basis points -- after 9 years of manipulation. 1/4 of 1 percent. THAT is a danger? Never mind letting buyers and sellers of debt deciding the actual rate (which would be much higher and trigger mass defaults without this form of Soviet control over our money supply). She essentially admitted today that they have fucked things up so bad that we can't even handle a 25-basis point increase. ... When at the same time she is telling us we are at full employment -- using Bernanke's criteria, they should have lifted off more than a year ago.

If not now, then when? Answer: Never. They backed themselves into a corner, and it won't end well. The market is going to take control from them before they willingly let it happen. Either way, when borrowing rates go up-- whether it is months from now or a year from now -- the defaults on the trillions of dollars of debt she has foisted on us (and the world) are going to be catastrophic. And it's going to make 2008 look quaint.

 

Yeah. I have seen a lot about that the last few days. Controlling the overnight rate is complicated because of all of the regulation combined with the mess they have created with their balance sheet.

Another interesting thing from the statement they put out. Not only did they push lower the forecasts for the funds rate as they go out. One of them actually predicted a NEGATIVE overnight rate in 2016.

This is the United States! What a clown show.