This recent series of waves can be counted either as a-b-c or 1-2-3 (likely W3). So a small pullback and a move to $20.40 - $20.70 will likely occur if this is indeed a new motive wave up OR it will collapse back below $18.30 which is where everyone should have their stops set. In fact, below $18.60 the odds of this being a motive count tail off rapidly.
Open note to Janet Yellen:
Dear Janet,
May I call you Janet? Or shall I just stick with "bat faced fed con woman". Either way I guess. Anyway, when are you going to announce that you are raising interest rates? I mean, clearly you are making them go up, right? You have everyone on the planet except us Austrian schoolers believing that fed control of rates is not only possible, but actually the norm. So with interest rates taking a marked turn up I really want to know, when are you going to tell the world that this was your handiwork.
What's that? Say it louder please? HUH?? You say you only really control the fed funds rate which is basically of no meaning to the real economy? You mean you never made any such announcement about raising rates and in fact everyone on the planet thinks that you must not raise them, including buffoon Buffett? Then Janet, what are you going to do if TNX continues to rise per my wave model? Will you just sit there and watch? I think not. You will make up excuses to raise the rates despite many calls not to do it. You will know that you are doing it to save face but you will fool many people into thinking you are doing it for the country and for what is right. In truth, you would keep them down forever if you could. BUT YOU CAN'T, can you?
You are so busted.
Sincerely,
The Captain.
Speaking of Warren Buffett, WAKE UP! The fed does not control these rates! The market does. And the market is raising the rates despite what the bat faced fed chairwoman says, thinks or does! The fed FOLLOWS the rate moves handed to it by the market and then takes credit for doing it.
Of course I can already read future headlines: Yellen raises rates too early, huge mistake causes recession/depression/market crash. But Yellen isn't raising anything right now folks, and please don't forget that going forward because this is going to be a wake up call for many. There is no potent director in charge of the economy; Prechter got it right and has had it right for a long time. So did L. Frank Baum when he wrote "The Wizard of Oz". The federal reserve is just a bunch of con men wearing nice suits and sitting in granite buildings with everything paid for by you and me. It just sits there intimidating us with our own money and using our own human nature against us like a blunt weapon.
The fed doesn't control jack shit. Prechter has presented the data on this many times for those who care to listen to facts and not just rely on the hearsay and gut intuition that pass for "economic understanding" these days. The mood of the herd moves in cycles just like the sun and the moon and everything else in our universe. Yellen can distort but she cannot change the eventual outcome. Yellen tries to convince the herd to do what she wants and if the herd thinks it is in its best interest, it follows. If not, it tramples the cowboys who are trying to drive the herd to the meat processing plant. Yellen is very likely about to get her ugly ass trampled by the bond market.
4 comments:
Captain,
Do you think Yellen will raise the Fed Funds rate prior to the possible telegraphed month of June?
Muy Interesante!
Cheers,
Chance
I think my post was clear: if TNX prints 5 waves up, and that is something that should happen next week if the model is correct, then yes, her hand will be forced. Many people do not understand all the statisticians and modelers that the federal reserve employs! They have data and resources up the wazoo, some of which is shared with the public via things like the FRED website that I have mentioned here from time to time. The fed knows human herding nature and the fed knows how to manipulate things. What I think the fed does not understand is that when you do not allow the market to self correct it is like stopping an earthquake from happening today. You have not changed the underlying fundamentals associated with tectonic plate movements, you simply allow the stress to build up far higher than it ever could have done without you and then you get a much larger earthquake down the road anyway because nature is bigger and stronger than man will ever be. That includes economic nature or the natural way of economics. Push an artificial economic agenda too far in an unarmed state like Argentina and you end up with social collapse. Do it in a fully armed nation state like the US and you eventually get civil war. There really is no such thing as unrepaid economic sins. They always come back to haunt one way or the other.
Captain,
Appreciate the response!
If the Fed raises the Fed funds rate unexpectedly prior to their telegraphed "possible" date of June 2015, then that would push me significantly further into your camp of thinking (ie. that the Fed doesn't control the Fed funds rate ultimately and that the market controls it, and the Fed just gets out in front of it.) I think one of the main reasons that people like me have our view is because history has borne it out. Unless the argument is that the interest rate market moves countercyclically (but I've never heard that argument articulated). For example we'll take a month that was prior to the GFC shit hitting the fan (June 2006) the interest rate on a 10 year treasury was around 5.11%. The GFC crisis hits, paper wealth and huge sums of US currency units evaporate. GDP goes off a cliff, employment goes off a cliff, US currency units are now way more scarce and harder to obtain than they were previously. With all of this going on, the 10 year treasury rate never exceeds the 5.11% that was posted in June 2006? The rate even drops from that 5.11% figure by at least 100 basis points at any given time in 2008 and 2009. You can see that convincing me that the market is in control of that interest rate behavior is a tough pill to swallow, right? Instead of interest rates ramping up considerably in a time of great upheaval and distress, they instead ramp down? It smells more like central planning than market forces...
Always a pleasure,
Chance
I have to write an entire post about this.
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