Stupid is as stupid does... it's not consumer demand that is driving food and energy prices higher, but rather the misguided approach taken by the Biden Administration to restrict supplies as well as the interest rate and monetary policies implemented by the Fed themselves.
-NW

Stock Crash Warning: Do This ASAP
Investment Watch Blog
September 24, 2022

[snip]

We already know from last week that Powell’s Fed pledged to keep raising interest rates to combat inflation.

That’s a problem for the stock market. Stocks and corporate bonds have been supported for the last 14 years by near-zero interest rates and endless quantitative easing (QE). The entire financial market has adapted to this “new normal” which supports otherwise-unthinkable valuations of stocks paired with shockingly high levels of both corporate and sovereign debt.

If Powell’s plan works like it should, it’ll be the equivalent of yanking the rug out from under the financial markets. Markets will plunge without their easy-money lifelines (exactly the opposite of the “pivot” Wall Street optimists were hoping for just last week).

It finally looks like Wall Street is waking up to reality… While I’m writing, the U.S. stock markets have hit their lowest point of the year (so far). The investment-grade bond market has lost more than 12%. The traditionally conservative 60/40 stock/bond portfolio, recommended for decades as the gold standard for those of us saving for retirement, is having its worst year since 1936.

I don’t think the carnage is over — because if we look where the smart money is going, we can see that hedge funds and institutional investors are bracing for a crash.

And by “crash” I don’t mean a bad day. Or an off week.

I mean a replay of September 2008, when the federal government was taking over mortgage companies and Lehman Brothers failed and the wheels completely came off the global financial system.