Everything You Wanted to Know About the Rate Cut but Were Afraid to Ask!

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everything you wanted to know about the rate cut but were afraid to ask. I’m back. I’m back everybody. It’s still going to be a crazy couple weeks for us here at the Watchdog on Wall Street show as we’re making the transition from New York down to Florida. I want to comment on the Federal Reserve and the rate cut.

the 50 basis points and all of the nonsense that surrounds it. But first I want to share with you something. This was it’s kind of genius. Jason Zweig has got a book out like the devil’s handbook when it comes to financial terms. This is what he said about the central bank. Central bank a group of economists who believe that their current forecasts will turn out to be accurate even though their past forecasts have been unreliable.

that their present policies will succeed even though their past policies have failed, that they can prevent inflation from incurring the next time even though they didn’t prevent it the last time, that they can foster lower unemployment in the future even though their practices worsened it in the past, and so forth. You should now be able to answer this riddle. What’s the difference, there’s a riddle, what’s the difference between a central banker and a weathervane?

Okay, the difference between a central banker and a weather van. They both turn in the wind, but only the central banker thinks he or she determines which way the wind blows. So, Federal Reserve comes out, 50 base spun, it one dissenting member. My email box is flooded with a lot of the super Trumpsters out there claiming that.

God, this is all political and they did 50 basis points because it’s going to help Kamala Harris. You know, if you didn’t notice, the bond markets already determine where the rates were going to go. Nothing’s changed. In fact, quite frankly, the yield, the yield on the 10 -year treasury has actually gone up since they lowered by 50 basis points. What are they going to do moving forward?

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I don’t know and I made it perfectly clear that I don’t care. The issue is this. What they’re saying, what J Powell came out and said and what they’re doing.

Well, they don’t jive. They don’t jive. There was some funny comments. It’s actually Rabobank’s Fed watcher, Philip Murray, actually commenting this. He talks about 1984, Orwell. If there was a strong case for a 50 basis point move,

Powell didn’t make it. He basically was up there singing the Lego song there. Everything is awesome. He made this point, it’s like a doctor saying, we’re going to give you extra strong medication. And then the patient’s like, geez, my condition that bad? No, no, no, no, no, no, no, you’re healthy. You’re healthy, but we’re committed to keep you healthy. Again, would you still want to be taking all of that medicine?

I guess the word that he used a lot was recalibration. I don’t exactly know what that means. This is more Fed speak. Anyway, is this going to really do much when it comes to mortgage rates? Did it do much? No. It’s baked into the cake, quite frankly. We’re gonna see moving forward.

But reading between the lines here on this is that I think the Federal Reserve doesn’t want to come out obviously prior to election and say that things are weakening in many spots. Now, I’ll you an example here. I just pulled this up. This is in Minneapolis, downtown Minneapolis, brand new, brand new downtown office building.

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was sold in 2019 for $74 million. Yeah, it just sold, this was 2019, it just sold last week for $6 million. That’s $10 a square foot. 633 ,000 square foot building. There is a meltdown that’s taking place behind the scene. And we’ve discussed this, we’ve talked about this for some time.

And you know, some people in the commercial real estate business are happy that the rates come out. It really isn’t gonna do much or may hold off the inevitable, but it’s not gonna save what’s taking place. And do I think that there could be a possibility of banking issues and banking crisis moving forward? Gary Gensler, excuse me, head of the SEC, had a bit of a Freudian slip when he was making statements last week.

when it came to the condition of the banking sector. And I do think that there’s some most certainly some rough waters ahead. Did the Fed lower rates, lower rates to help Kamala Harris win the election? No, no. Did they maybe help Kamala Harris by not telling us what’s really going on behind the scenes? Yeah, yeah, but anybody with half a brain.

Can see what’s going on when it comes to spending the amount of government spending and how it’s juicing the economy all of these things All of these things. yeah, 50 basis point hike and then coming out and saying yay. Everything is great Doesn’t exactly jive so again You’re gonna trust the Fed you’re gonna trust the 400 economists that are perpetually wrong all the time with their actions

I wouldn’t, nor would I make any sort of investment decisions based upon what the Federal Reserve is going to do or not do. Watchdog on wallstreet .com.