Fed Pays Banks 3.9% To Not Loan Money!

Blackstone has to halt redemptions - Price drops 12%

GDP boosted by strategic petroleum reserve sales & weapons to Ukraine

Send questions for Q&A; to [email protected]

Fed Pays Banks 3.9% To Not Loan Money!

December 7, 2022

“And that’s been the story of this year. Uniformity was the surprise for the 60/40 portfolio because you thought you had a balance between stocks and bonds, and that balance was supposed to keep you from losing money, and yet you lost on both sides. Instead of losing on one and gaining on the other, now you’re the double loser. Uniformity is telling you that policy matters, rates matter. We have a very leveraged system which is hypersensitive to small changes.” — David McAlvany.

Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick along with David McAlvany. 

We’re coming into that time of the year where we’re going to do our question and answer program. If you would send those questions to [email protected], three to five sentences long, please, but we’ll try to get to all of those questions at [email protected]. I-N-F-O at M-C-A-L-V-A-N-Y.com. 

Well, the famous Table 30, Dave. Table 30. You left me. You left me and you went down to Cancun. You have a friend who is a musician professionally, and he invited you down for a couple of days. And you had texted me—and thank you, by the way, for communicating that you weren’t going to be there for the Monday meeting, that was helpful. But when you texted me and said, “Hey, can you cancel Table 30?” I thought, “You know what? We both have a doctor who’s a friend who listened to the Commentary back when he lived in New Zealand.” He moved to Durango and I called him up and I said, “Hey, remember Table 30?” He goes, “Oh, yeah, I’ve heard all about Table 30.” “Well, would you join me for Table 30 on Monday night because Dave is out of town?” 

So, I hate to sound like I was a traitor, Dave, but for the first time in over a decade of the meetings on Table 30, you weren’t there. I still enjoyed the Talisker and Dennis did, too.

David: Well, it sounds like an official launch for the rebranding of the McAlvany Weekly Commentary. We’ll just call it Table 30 from now on.

Kevin: You know what? That’s been suggested, that’s been suggested.

David: Table 30 it is, it’s where the good stuff happens. It is a little bit like jazz, you don’t necessarily know what happens next, but it’s always good.

Kevin: Well, and speaking of that, I think you’re just about to head to Europe for a couple of weeks as well. So, I think we’re probably going to desert Table 30 a bit but, hopefully, we’re going to have some really good interviews. I know you’re looking at interviewing someone just strictly on this history of Russia and Ukraine. How do you say his name? Is it Figes?

David: Sure—I don’t know.

Kevin: But I’m looking forward to hearing that.

David: Well, I’ll be back in town sometime around the 14th or 15th of the month and that’s going to be immediately after Powell’s comments and the determination of the next move by our central bank. So, there’s some things that may or may not deliver this year for Christmas. We like to think of the Santa Claus rally, and maybe it’s not quite as generous as it’s been in past years. 

Last week, the big moves in the markets came after the Powell address at the Brookings Institute. This was not an official Fed announcement with Q&A;, but these days a central bank talking about anything—about the weather—it changes the mood of investing, and it is a part of that exaggerated focus on Fed-speak and the market dynamics that tie to a very sensitive structuring of assets. 

Doug and I were talking the other day and he said there was a point in time, not that many years ago, where there were no Fed announcements. You had Fed watchers, and they had to determine what was going on by the actions taken.