U.S. Stocks Fall as Treasuries Drop With Emerging Assets on Fed

yeehhhhhhhhhhhhhhhhaaaaaaaaaaaaaaa!! ride that bull. lol

today's drop in the S&P may be fatal, considering there is an overhead gap in the cash market from Friday's close. also, the bears have climbed in early three days in a row.

This is something new. Raising interest rate in order to increase inflation to 2 %. What will happen if there will be deflation after rate hike?

Too much BS happening over the fear of .25% rate hike. Keep calm the market will have to re-balance itself after.

"re-balance" itself ?

''Get back to fundamentals '' hence rebalancing itself.

Agree. I don't understand. When Treasuries drop, institutions buy into them? Usually, when the price drops, it's because ppl sell them.

So, Gold drops, Stocks market drops, Treasuries drop. Where do they keep the money?

One answer, maybe, money is flowing out of US. No wonder, EU is up, and GU is up.

Well think about it the US 10 year currently pays a measly 2.3% which is ridiculous for a 10 year investment. Specially for a country that is buried in dept. There is no true demand for the treasury. No real entity will buy US debt since in truth its more like junk debt, the only reason rating agencies wont down grade US treasury is because they will get sued by the government.

Hence true demand would probably show up at a much higher interest rate. Now the problem is the US government cant afford a real interest rate because of the debt they have. Anything like a real interest rate like 6,8 or maybe 10% would make the interest on the debt unserviceable.

How it works at the moment is by stealth QE. Banks borrow at near 0% on the short term and buy US treasuries. Except the problem is if rates go up then this gimmick ends.

Hence its impossible for the US FED to raise rates without crashing the system. Not only will they crash the Bond market but the Stock market, Housing market including the Dollar.

The best trade at the moment is to buy more and more of hard assets which have been suppressed. Like Physical Gold and Silver. Both of these metals are basically Anti Debt. By buying any of these you are betting against the Federal reserve and the whole fiat system which has been struggling at 0% for a historic 7 years now. If the economy was so good they would have raised rates a long time ago. It should be obvious to anyone they cant raise rates.

Gold and Silver are currently artificially suppressed, however history shows us such surpression cant last forever. Check the 1930's then again the 1970's, 2 points in history where we have simular levels of surpression on these metals before it got to a point where they couldnt surpress these metals by any means necessary.

Absolutely correct. The only thing I can think of why US will raise IR is because Mr. Y. has promised. Otherwise, there is no other good reason.

The current job market data of 271 K new jobs is not a good reason. In December 2014, 321K news jobs was created. In March 2015, 295 K. In Jun 2015, 280 K.

Those are better than 271K. From Aug 2014 to this day, only those 4 data are better 260K. These are from the total of 16 data. Hence only 25% of those data are better than 260K.

And in the previous month of Oct 2015, the reading was 142K new jobs was created. Which was the 2nd lowest reading from 16 data.

It is more apparent if you look at the Forecast data from May 2014 to this day.

The forecast for November 2015 was 181K, which was the lowest since May 2014. How could they set the bar so low? One good reason was, they guessed that US couldn't have created a good number of jobs more than 200K.

It was a reasonable Nov 2015 forecast, given previous data from US job market and current world economy.

The forecast was easily beaten by 271 K new jobs. But if the forecast for Nov 2015 had been 250K, you cannot tell if it could be beaten. Well, at most it was beaten slightly.

271 K new jobs was way better than the forecast 181 K. But it was less than 290K. And only slightly better than 250 K.

Agreed,

You also need to look at the sort of jobs created. Most of these jobs are low paying service industry jobs. You need to do 2-3 of these jobs to make a living. Lets not even count the birth death model which assumes how many jobs were created.

Most likely these jobs numbers will be revised down ward in the coming months. Even if we were to take these number seriously we have to see the under employed percent meaning people not in the job market which are down to 1970's levels. Near record 95Million work able Americans have left the job market, why? because they couldnt find jobs. If those people would be added to the labor force real American unemployment would sky rocket to 25%.