Creating a false market
This is the law in the USA: similar laws/rules apply in all developed marketes.
This is the tweet:
The Sec. Ex. Act 1934,Sec9 says its illegal “to induce the purchase or sale of any security” by claiming that the price of the security “is likely to rise or fall because of market operations..conducted for the purpose of raising / depressing the price of such security” #GME #WSB pic.twitter.com/giImuWMu5T
— Abishek Raju (@Abishekraju) January 30, 2021
This is where I got it from. Alex is angry, and has every right to be.
The question is, how much responsibility does the Fed have in all of this, and Powell answered that question at Wednesday’s press conference. “None.” When asked about financial stability, in a broad reply he referred to banking stress tests for the system as a whole. When Steve Liesman pressed and asked whether “super easy” monetary policy has created a bubble, Powell responded that what was primarily ‘driving asset prices’ was vaccine progress and fiscal policy, NOT monetary policy. Of course, the Fed has been vocal in urging more of a fiscal response, but never mind that. He said the Fed had not at all considered raising margin requirements, and that issues of financial stability could be handled with macroprudential tools (without specifically naming any of those tools). It could be construed as somewhat disingenuous for the Fed to take credit for reducing employment while shunning blame for asset price instability. In an interview on Friday, Mary Daly of the SF Fed took that issue head on: “I am not willing to pull that bridge [monetary accommodation] away and injure, in my judgment, the livelihoods of people – because they don’t have jobs, they don’t have income, they don’t have wage growth – simply to ensure that some people who already have stock market wealth don’t get more.”
Clearly Powell was miffed at Dudley’s assertion that a taper tantrum would be “inevitable”. It was during that part of the press conference that Powell went to great pains to say that the Fed is a long way from exit and would communicate such plans well in advance. He also gave some insight into the Fed’s thinking on present conditions. First, he echoed Brainard on upcoming strength in inflation measures due to base effects, as weak March and April data from last year fall out. The Fed will look past the data as there are significant pockets of unemployment and slack resource use. Regarding strength in housing, he mostly considers it a one-time shift with transitory effects. In short, he emphasized long-term disinflationary forces, including demographics, technology, and globalization.
Daily meme
Myth and Reality
I don’t post about Tesla much. There is nothing much more to say. It’s the marquee stock of the 2020 bull market, and until it suffers serious weakness the bull market will remain intact. Musk’s ability to make the stock price levitate in the face of any quantity of sober analysis demonstrating beyond any doubt that it is fundamentally worthless has inspired legions of followers including the ironically named @deepfuckingvalue. However, I am a great admirer of Montana Skeptic and I read with interest his most recent post on Seeking Alpha. Clearly, for the moment, he is on the back foot, and Cathie Wood is on the front, but he who laughs last laughs loudest and Skeptic and the rest of the $TESLAQ crowd are not going away.
Daily Tweet
Best reactions to this news pic.twitter.com/SNnLOO2uRV
— Liberty (@LibertyRPF) February 2, 2021
Wrap
Basically, 100% risk on. The Fed is a steamroller. Every risk asset under the sun is up.
News
- Elizabeth Warren appointed to Senate Finance Committee.
- Stimulus announcement again,
- Twitter going mad that Citadel owns RobinHood,
- Meme stonks tank. Dave Portnoy fingered for hypocrisy as he closes his positions after promising his followers he’d “die” before he did this,
- AOC has weepy protracted announcement about suffering sexual abuse earlier in her life,
- Gold, silver hammered, as WSB crowd fold their hands,
- RobinHood seems just to have understood that settlement in the US for equities is T+2, as it has been for decades.
- Bezos announces he’s stepping down from being CEO,
- Draghi fingered as next Italian PM.
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">*WARREN SAYS WILL INTRODUCE WEALTH TAX AS A FINANCE CMTE MEMBER</p>— Breaking Market News (@breakingmkts) <a href="https://twitter.com/breakingmkts/status/1356709423486533638?ref_src=twsrc%5Etfw">February 2, 2021</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>*WARREN SAYS WILL INTRODUCE WEALTH TAX AS A FINANCE CMTE MEMBER
— Breaking Market News (@breakingmkts) February 2, 2021
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