Read Between The Lines

It's Seldom What's Said

Quite a busy day here but just wanted to jump on with a short post that reflects my interpretation of today’s Jerome Powell show. It’s not what was said, it’s more what was not addressed.

Powell’s statements were beautifully articulated. I’m sensing he’s got a set of kanuchis big enough to handle the inflation fight without causing people to run for the hills. He undoubtedly understands what it took for Voelker to get it right 40+ years ago; taking rates to levels high enough to get people to quit spending. At the same time he didn’t truly ring the alarm bell . . . yet. He’s got time and undoubtedly with the indicators we are seeing rates are not done going up.

The problems within the banking system were grossly understated. The plan to simply offload troubled regional banks onto the stronger balance sheets of the big five has its limitations, especially if it’s not contained to the United States. That’s not going to be possible. Perhaps there’s a few potential merger possibilities between some of those banks in the second tier but not enough. The street is smart enough to spot a troubled bank and a few others hit the radar screens of the short sellers today. It ain’t over until the fat lady sings and she’s just getting warmed up.

Have to run but a shout out first to Danny Riley at www.mrtopstep.com. Click on the link and follow him; it’s well worth your while.

Hope you enjoyed this post. I’m just a young 68 years old; my Dad became a broker when I was 13. It’s time for me to ‘give back’ to all of you what’s in my head. It’s not always pretty but it’s based on history . . . and history, unchecked, repeats itself.

Everyone learns at their own pace. If you pick everything up the first time through, great but if not email me at dzimmer@substack.com so we can further help.

Always have to end with a song, this one “Should I Stay or Should I Go” by Clash is a question the investment world faces . . . best wishes to all in making that decision.