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Fundamentals for markets have boiled down to QE or QT since 2009. Now there’s QT, a lot of QT, globally, to battle the worst inflation in decades.
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Most people in finance today cut their teeth in the era of Easy Money, when history books were thrown out the window.
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The Fed ended Free Money, and the only thing it broke is the consensual hallucination that spawned during the Free Money era. And look what we got.
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Some markets are already deep into it, others just started. A sobering trip from the free-money decade in la-la-land, back to normal.
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Drunk with Easy Money, companies were hogging office space and workers for a future that did not come.
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The Crazy Stuff and Crazy Asset Prices that arose during Easy Money started blowing up when Easy Money ended.
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As the FTX collapse shows, the shenanigans guarantee smooth, efficient contagion inside the crypto zone. But beyond it?
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Raging inflation knocked out the “Fed put,” and banks are no longer on the hook for mortgages; taxpayers and investors are.
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Deficits don’t matter – until the bond vigilantes ride into town.
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The Fed will tighten “Until Something Breaks” and then pivot? Wait a minute...
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