1. Clearly the Fed is promoting SOFR over FF and Repo; and 2. There’s a growing consensus that the Fed is targeting the wrong interest rate
@ZeContrarian7 https://twitter.com/zecontrarian7 (though I might've just assumed he means repos when he was recently talking about fed pumping money into the system)
He is currently more neutral though usually short vol to some degree (shorting more on VIX spikes), while seeing artificially depressed volatility and therefore wouldn't advise to sell VIX puts like he did in previous years (he was playing it both ways, though selling puts doesn't need to be exactly long). Shorting some vol is always OK. Here are some interesting tweets from him:
The reason I say this is political is because Powell stated that they would have to lend to more lower income people. As we all know the more money you give to lower income people the more they spend so the fed is basically saying they r willing to reduce reserve requirements in exchange for creating the circumstances that caused the last meltdown meaning we may still be a half decade away from the next reckoning. To me it is bullish.
How much money can low income people borrow? I suspect that they already have a lot of debt and banks won't want to loan to them anyway. Regarding the last decade, banks were willing to lend money in the form of cash-out-refinancing and home equity loans. Some believed that homes would not lose value. Some did not care, sell the loan, offload the risk, make commission.
Like Bitcoin. Here is a fu exnercise. Let's say a small country would switch to a national crypto mostly mining/holding the majority of it so they are kind of in control. Then when they need MORE money, they would just announce a national FORK. I wonder what the crypto fans would say about that? The point is obvious, you can print more with cryptos too.
Happy Birthday Fed!! Financial panics before Fed: once every decade Financial panics after Fed: once in a century