The Fed's "Shit or Get Off the Pot" Moment

"Mark to market is an accounting practice that involves adjusting the value of an asset to reflect its value as determined by current market conditions. The market value is determined based on what a company would get for the asset if it was sold at that point in time."

Rising present day yields on bonds and treasury paper means that the value of a bond purchased one, two or three years ago is diminished.  It is underwater and would need to be redeemed at a loss should the holder need to cash in that bond in today's market.

Through Q.T. and raising the overnight rate, the Fed is "turning the screw".  Q.E. was the heroin - Q.T. is the withdrawal. 

If you are ever having trouble sleeping, go over to Treasury's website and look at the historical yields on government paper (Uncle Sam's I.O.U.'s).

Here's a link.

On April 21, 2020, if you had decided to buy a 30 year Treasury, you would have a yield of 1.17% - pretty fucking shabby, right?

If you had to sell that security in today's market to raise necessary cash, you would be fucked. You are a "hold until maturity" guy.  Anything that pops up and that necessitates the need for immediate cash (*cough* bank run *cough*) will cook your goose.  I remember seeing those yields and thinking, "Who in their right mind would lend this government/country money on a 30 year security and agree to that kind of yield?"

Shorter durations were the order of the day and I think that a mix of short to medium term durations are the way to go.  Short so that you can take advantage of the current rates available on money needed "TODAY" and medium term so that you can lock in some decent returns in the near term (7 year or less) future.

The job market is turning over.  There are still plenty of jobs available but not all jobs are created equal.  Translation: "Goodbye Meta job with six figure income, plenty of perks, nice bonuses and private parking space - Hello Marriott Hotel job with an income half of that paid by Meta and few if any benefits".

Oil prices are back to a level more in line with long term trends (and declining).  The "Everything Bubble" (which few people believed existed as recently as two or three years ago) is now acknowledged and bursting.  These are all deflationary pressures in the very long term.  If a war does break out, all bets are off.

Fed takes the safe route and jacks the overnight 0.25%.  That's probably the most prudent route.  Now they should focus upon standards - start auditing and making insured depositories get their shit together.  Still got "a long row to hoe".

Almost Everyone Has Had Quite Enough

The teenagers and young adults with the purple hair, multiple tattoos, circus like piercings and insistence that the country turn itself inside out to facilitate the  pet peeves and peccadillos of the Sodomites, race hustlers, open borders crowd have finally jumped the shark.

"Iowa has veered so far to the right in recent years that its political landscape is virtually unrecognizable from the centrist place that chose Barack Obama in 2008 and 2012 and was one of the earliest states in the country to affirm same-sex marriage. A joke among statehouse reporters is that Iowa is becoming the “Florida of the North” — without the beaches."

The endless screeching Harpy bullshit about the insistence that regular people do handstands at the command of the very far left has finally, mercifully, thankfully met its end.  Regular people who are generally accommodating and more than willing to live and let live have finally had enough of the seemingly never ending kneeling and public histrionics and demands for reparations and general bullshit that comes from a very small but very vocal sliver of the overall population.

Blowback to the woke in Iowa

Clown World Federal Reserve President

Behold the poster child for what passes for competency in Fed World - I give you Mary Daly from the San Francisco Federal Reserve.

"Wokeness has replaced competence and merit across the banking sector, and San Francisco Fed Chief Mary Daly is the poster child of this pernicious trend."

When meritocracy dies at the Fed

I saw this trend in Credit Union Land as well - total imbeciles given control of entire departments.  EDI departments with over paid ass clowns.  "Supervisors" who didn't know their asses from a hole in the ground, "underwriters' who had no clue on what a breach of contract lawsuit was, etc.

Predictable Response From Clown World Central Command

Secretary Yellen, Chair Powell, POTUS and company, etc. will throw you a lifeline if your failing bank is deemed to be systemically critical and its depositors are deemed to be essential to the well being of the overall economy.  

If your bank is not and your depositors are not "systemically critical", well, that's a horse of a different color.

During the "pandemic", you could be thrown out of work if your job was deemed to be "non-essential" but then Clown World Central Command would throw some Monopoly funny money your way to soothe your butthurt and allow you to funnel that money to Wal-Mart and Amazon.  The fun never stops in Clown World.

And a large part of the country - "Great Americans" as I call them - sees no problem with this - nothing to see.  I saw a bumper sticker recently that read "Fuck Joe Biden and Fuck You for Voting for Him".

In Mississippi we had a name for this type of "voter".  "Bootlicker"  Bootlickers ultimately get what they deserve.

Get It While It Is Hot

 

As we all know, most Latinas do not age well so my advice to AOC's boyfriend is enjoy that ass now.

When you enjoy the Congressional spotlight, salary, perks and benefits, you can't just block out the opinions of the electorate because they hurt your feelings.

Mr. Stein Wants Access

To clarify, Mr. Stein wants access to the Congresswoman's Twitter Exchange.  OK, yeah, he would probably like access to that fine ass as well but that is not what his lawsuit is about.

No Bailout No Capitalism

 Everyone is against a bailout until their self-made problem requires that they themselves be bailed out.  :)  These same kids likely voted for Joe Biden in the hopes that their student loans would be forgiven and thus they would experience the Nirvana of bailout.

To be clear - true capitalism equals zero bailouts.  You may buy insurance for the unplanned catastrophe but that does not equal "bailout".  We have what has been labeled as "crony capitalism".  It's about "who you know and who you blow" that dictates whether or not you will be bailed out or not.

Silicon Valley Bank is in the news for all of the wrong reasons these days.  It has not had nearly as much press but the good old Federal Reserve has been losing its ass on mortgage backed securities and treasuries it bought during the Great Covid 19 BoogeyMan Pandemic Scourge of 2020-20222.  Who will bail out the Federal Reserve when they need a hand?  I dunno.  The Federalist Society article below takes a guess.

When The Fed Gets Its Dick Caught in a Clothes Wringer

That's the way it works dear taxpayer - when the "leadership of the country" and the boobs at the Federal Reserve make a policy error, you pay for it with higher prices (for everything), asset bubbles, low return and high risk investment options, mania and skullduggery.  When the Federal Reserve figures out that it has painted itself into a corner with the combination of artificially low interest rates and Quantitative Easing, you get to pay to bail them out.  Wash, rinse, repeat.  But this one is no typical wash cycle.  This one is far bigger.  QE was done on a far more massive scale this time to "fight the spread of a Chi-Comm engineered cold virus that was parented by Dr. Fauci and company" and that occurred during a hotly contested Presidential election (what a coinky-dink, huh?).