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Effective Federal Funds Rate

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FEDFUNDS trade ideas

Using Treasury Protected Securities to HedgeFar be it from the lips of any trader to question the bull run, but all good, crazy things must come to an end. And it is in this spirit that we plan for the future. Everyone with the tiniest bit of gumption is a genius in a bull market, but it's when the stock comes crashing down that separates the real traders from the future embittered. This is comparing all the TIP ETFs I could find with the effective Federal Funds rate. The idea is that while a TIP will protect your money from inflation, you want to pick one that is resilient in the face of high-interest rates. I've named my favorite, for the specific reason that it is the most volatile. So while it will succumb to a market crash it may more quickly recover. The nightmare is to be left bag holding a 2001-2007-type scenario, or 2007-2012. Now I'm a trend follower. Not a trend-setter. So my plan is to beat the market and generate some money in this environment and then lose 20% of the portfolio at the top when this thing starts flatlining - whenever that might be. It's been right around the corner for a decade and with the stock market totally beholden to the FED, it's not hard to imagine a subtle policy change like slightly raising interest rates totally blowing this thing for 2-3 years. At that time I hope to bail into some combination of TIPS and Food Retail (Ingles, Albersons, Kroger) to weather the storm. It's not wrong to take advantage of the mania, but you better have a plan on where to put your money.
FRED:FEDFUNDS
by PreferredStonk
Evictions Galore - Prepare for some more Fed Rule-BreakingWell it's starting: www.washingtonpost.com Unpaywalled article about the same thing: money.yahoo.com So many Americans, 45% of whom*, who do not even have a dollar in savings, and most of those are lower-class, nonsavers who are renters who don't get the benefit of forebearance, are now facing the ensuing reality that we don't live in a benevolent despotate where the king can just forgive all the poor peasant saps. Instead, we live in (the remnants of) a free market, capitalist nation, that runs on "make money or fuck off" (kinda... sometimes.... well if you're not disabled, nonwhite, a woman, or have kids). www.statista.com * Easily way worse nowadays It looks like the reckoning is nigh, and we are about to face another good lot of craziness for a couple months (or maybe more if we are lucky). We have a load of debtor, drunkard Americans who work unskilled service jobs about to be homeless, or are already packing their bags. Meanwhile, many American homeowners are being saved, for the time being, by forebearance. On the other hand, there are issues like this*, 9/10 New York businesses not being able to pay full rent. nypost.com So what do we do with all this information? What does it tell us about the future? Much similar to my last article, there is a coming big change to the way debt will have to be handled as to prevent a massive bust - in this case, prevent millions of Americans becoming homeless within a few months to a year. If so many of these nonsaving, generally low IQ, probably prone to anger (vengeance-seeking is an attribute of lower IQ people. Can't control impulse.) people are going to lose their fancy leveraged lifestyles they have been given on a silver platter by a thieving government (that stole it from the Chinese and all the other third worlds that could benefit from taking back what they've been giving us for decades) then they'll probably wanna start rioting and throwing up signs about how angry they are, maybe even start hurting people they deem blameworthy. Where do we go from here? There'll have to be massive action from congress and the Fed. That's it. The dollar is gonna have to take a big ole kick to the teeth to prolong the damage that has been done by the onset of sober reality to our nonexistent economy. I think the couple months of waiting for something to happen will pay off by the end of the year when either we have another nice drop in the stock market (making Donald Trump shart his pants), or the Fed enacts that beautiful cryptocurrency*, lowers rates, buys corporate bonds, delivers bailouts, or finds some way to unconstitutionally defy the law written for them. www.bis.org
FRED:FEDFUNDSShort
by MoneybagsMcGee
GOLD, SPX AND FUND RATES/QEAs mentioned in the previous idea, for Gold to go up we need 2 factors: 1 - market crash from hyperinflated values 2 - fed intervention in the form of rates cut / quantitative easing to make it attractive I would not consider what happened to gold before 2006, when it seems that it is perfectly correlated with spx, simply because in 2000 an ETF on gold was introduced, bringing in a lot of liquidity to the underlying. Before it was difficult to buy gold if not with futures. It became mainstream. Let's concentrate on what happened from 2007 onwards, without concentrating too much on levels, but more on timings in a cause-effect analysis. Spx was coming from a 4-year bull run after the .com bubble, prices were going beyond any common sense, bubble fears were increasing, interest rates were high at 5.25%: all the ingredients for a recession were there. After freddy mac and fanny mae defaults, FED started to cut rates until the abrupt cut from 4 to almost 0 in Nov 08, which was "incidentatally" the point in which gold reached its local mininum and experienced its bigger loss in years. Until rates are not cut indeed, a financial crisis itself does not make gold attractive to investors, as their liquidity can be used with bigger returns elsewhere (also it is needed to keep the business open in the intitial phase of the downturn). The market continued to fall until march 09, while gold started its incredible run to 1900usd. In 2012, when the FED announced a progressive return to "normal" rates situation, gold started to decline and fell asleep for many years as no more attractive to investors during the EVERYTHING BUBBLE. Until 2019, when, amid bullish markets, fears of another recession started to mount again. Everytime gold, even if sleeping, sets to a higher level: 600 in 2008, 1000 in 2015, 1400 could be the one at the present time. Now, markets are crashing and FED just announced a rate cut to 0. Can you see the dejavu?
FRED:FEDFUNDS
by edutradinguru
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