The most important people in your life aren't the politicians screwing everyone. It's the unelected bureaucrats running the central bank... and, boy, are they bad at their jobs. Buckle up...
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[Republic Risk: How Many Fed-Driven Crises Come Next?]( The most important people in your life aren't the politicians screwing everyone. It's the unelected bureaucrats running the central bank... and, boy, are they bad at their jobs. Buckle up... [Garrett {NAME}]( Mar 19 ∙
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Equity Storm Watch Is GREEN on the S&P 500 and YELLOW on the Russell 2000 The Nasdaq 100 (QQQ) had a great start to Monday, but saw a “so what” reaction to NVIDIA’s conference. Now, NVDA is leading the equity markets lower as it continues to conference and says the word “AI” a few dozen times. Small-cap selling and the undercurrent of the market (non-big mega cap tech) is experiencing a lot of selling - which is usually a sign of something a bit more negative to come. The S&P 500 is holding, and cyclicals are squeezing a bit. As I’ll explain, the focus is still on the Federal Reserve, which kicks off its two-day policy meeting. There’s a lot to cover there, so let’s dive in. ------------------ Tamiami Tips - Proxy giant Glass Lewis endorsed Disney's (DIS) board against Trian and Blackwells Capital's push for change, citing strategic progress under CEO Bob Iger, including streaming improvements and a $60 billion parks investment. Despite criticism, Glass Lewis recommends backing the current directors, noting Disney's recent advancements. The shareholder vote is set for April 3. Knowing Glass Lewis, they are probably also backing Disney’s ESG and DEI initiatives. - A deal to fund the U.S. government through September 30, allocating $1.1 trillion to various departments, aims to prevent a shutdown by Friday. Resolving border security funding disputes, the agreement now faces a race against procedural deadlines to ensure continuity of government services, reflecting a compromise to avoid election year fallout. There’s opportunity in the border, as I’ll explain today at Postcards from the Florida Republic. - The Bank of Japan lifted its key interest rate by 10 basis points from 0%-0.1%, shifting its stance from negative interest rates due to rising consumer prices and significant wage hikes. Exiting its 2016 yield curve control policy, it signals no further increases soon. This shift, the first rate hike in 17 years, aims to encourage spending and stabilize inflation. This could have a rather profound impact on the global bond market later this year - as investors eye the possibility of less buying from Japanese institutions. Meanwhile, Warren Buffett has reaped a small fortune from buying into trading houses and financial institutions in Japan. - The jitters around the Fed remain in the housing market - where prices continue to rise in the face of higher rates. It’s a simple fix to housing - and it involves liberalizing supply-side laws. As I’ve noted, 25,000 different agencies at the municipal to Federal level affect housing supply. This Byzantine system is why we still have a supply shortage - and why builders are really only catering to higher end buyers. It’s very hard to get multi-family units built with a NIMBY focus around current buyers and regulators. The Fed can’t cut rates to help housing because they’d just increase demand. And if they do keep rates elevated, supply will likely remain offline. These people are really bad at their jobs. ... Continue reading this post for free, courtesy of Garrett {NAME}.
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