Odds and Ends: September 2024

 - Let us not look back in anger, nor forward in fear, but around us in awareness.

- JamesThurber

Fed Fake

With all the fanfare of the Fed meeting last week and the big half-point interest rate drop, the overlooked other announcement was the real one with impact. In both cases the magic was performed for the public, but the misdirection of the trick was for the banking industry. The rate drop helped banks with their losing position (underwater) of government bonds purchased at 2% and 3%. It lowered costs for large corporations issuing their own bonds. 

The quietly held second meeting gave banks what they wanted. The Basel III accord sought higher capital requirements for banks. The proposed level was 19%. The Fed always has their greedy back. They put all of us in danger because the banks are borderline insolvent. The Fed lowered the reserve level to 9%. 

Banks Know...

that they are in trouble. They have been playing manipulation by increasing mergers (54) that allow tax loopholes to make balance sheets appear better. They also have been closing branch banks (2400 last year) to cut costs along with layoffs. So, the Fed rate cut was an appetizer to the main course of lower capial requirements. Like we always say, End the Fed!

Meanwhile...

Bankruptcies continue. This one will bring tears to my mother's eyes. Tupperware filed last week. 

Middle East

The Israeli PM, Netanyahu never misses an opportunity to prove that he is an arrogant, warmonger. He keeps provocating the Arab opposition and has the gall to declare that he is justified. He knows that no matter what damage he creates, the US has his back. He is no different that the North Korean dictator who causes damage all the time because he believes that he can count on his Communist brother, China. 

Market

The rate cut gave a huge rally in the market. The Dow, S&P 500 hit new all-time highs on strong volume. It gave us here at Evolution, pause. Then, we checked with the Transports. They rallied hard, but gave up all their gains. In addition, it never came close to its last high. This is a dangerous market, but gold did hit a new all-time closing high. Yay!   Peace.