Locator: 48324ECONOMY.
US consumer, link here:
The meme: if the Fed cut rates by 50 basis points, the US economy must be in worse shape than we're being told.
I simply don't agree with that; I don't see that. The key word: "recalibration."
Regardless.
Let's look at it this way. Binary.
The economy is in worse shape than they are telling us. Okay. The Fed did the right thing, cutting by 50 basis points.
The economy is doing much better than folks realize. The Goldilocks economy. Okay. The Fed sees the "need" / "opportunity" to "recalibrate" / "normalize" its effect on the economy.
In either case, by reducing rates, the Fed's actions will "goose" the economy.
I go back to this post:
Easy money: the question is now being raised -- should "easy money" be the norm? The economy took off (excelled) when the US had twelve years of easy money; April, 2008 -- September, 2022. Actually 14 years. A generation of Americans have only known "easy money." It becomes an even more fascinating question when we look at the real reason for inflation. Was Paul Krugman right all along? Even Steve Liesman is willing to play along, entertaining that thought.
Or was it simply about easily accessible, easily affordable, dispatchable energy?
Let's not overthink this.
The EU's crude oil production:
At the end of the day, it's still a global economy. The economy of the US is head and shoulders ahead of whatever else is out there. The UK, as an example, is in great trouble, and despite that, England's central bank did not lower rates today. Meanwhile, the US in great shape, and the Fed cuts by a surprising 50 basis points. On CNBC just a few minutes ago (do folks remember Meredith Whitney from decades ago)?
Carl Q: should the Fed have cut the rate by 50 basis points?
Meredith Whitney: absolutely. I was surprised but absolutely the Fed should have cut rates by 50 basis points, and it needs to get to a 100-bp cut as soon as possible, certainly by the end of the year.
It is interesting that every talking head / analyst / economist that I've heard speak in the past eighteen hours agrees that the 50-bp cut was the right thing to do. Even those who expected a 25-bp cut enthusiastically support the 50-bp cut. I have never paid much attention (in the past) to those who are now arguing that the Fed should have left rates alone, or even, perhaps, even have raised them.
The above charts are simply amazing.
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CNBC
The biggest problem I have with CNBC today is all the time spent "arguing" about the pros and cons of the 50-basis point cut. Who cares. They did it. The Fed cut the "rate" by 50 basis points.
The question is not whether it was the right thing to do, but rather, "now what?" What do investors do now that the Fed has cut rates by 50 basis points.
"Sports radio" / "sports television" revolves almost entirely around the Dallas Cowboys and more specifically Jerry Jones and Dak Prescott.
That's what CNBC has turned into: the producers / anchors has turned the conversation into following the Fed 24/7. Wow.
By the way, "zombie companies" are now getting a lot of attention. The most obvious "zombie companies": shipping easy-to-prepare food meals for humans and for their pets. Whatever happened to Blue Apron? Years ago, I occasionally saw Blue Apron boxes delivered to our 700-unit complex. Now, I haven't seen a Blue Apron box in years. One renter is buying Chewy on a regular basis, but that's about it now. I know I'm missing many of the deliveries but ....
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Carl Rowan
