gold and steel. Soaring higher interest rates -- with more to come for sure --and fears of a recession are driving this market. Perception is more important than reality, and as we have seen from today’s action with CLF, a great Q1 report and guidance cannot overcome investor fears. Mortgage rates now at a 12 year high, and Powell about to up the fed funds rate a half point in may, and another half point in june and who knows how much more he will need, but the market is worried and is at ponzi valuations the vast majority of industries, or soon to be at ponzi valuations in others, if things shut down..
The question is are investor fears the coming reality? The market is still wildly expensive, and we are in the largest debt bubble, in the largest indebted nation, in history, with other indebted nations proportionally worse that U.S., although we are now close to the top.
The fear seems to be now that the FED as usual phoucked up, they should have started raising rates 6 months ago, or even 9 months ago, and now they gotta take a meat clever to the inflation problem, thereby risking a complete demand shutdown almost across the board. Right now business have been able to pass on inflation costs but small businesses in particular cannot continue to do so....customers will simply no longer buy, and go into a shut down mode. Housing is gonna be completely choked off as the rates now on mortgages are at an all time high. If they declare a recession 6 to 8 months from now, remember, that means they will have looked back at the prior two quarters and seen a complete drop off of demand just about everywhere, and new cars (and new car loans) like homes like all the other industries, in the coming weeks and months, will simply fall off a cliff, in terms of demand. CLF had a tremendous quarter they just report, and the stock was up 3 bucks early in the day but closed down 63 cents, 28.95-0.63 (-2.13%)
At close: April 22 04:00PM EDT
People are afraid of a coming recession starting in the next 2 to 8 weeks, which we will only learn about in 6 to 8 months, as the government looks back in time.
