by Adam Taggart
I didn’t have room in the above article for this chart, but it’s one that has stuck with me since I saw it when first published in 2015.
Very few professionals left on Wall Street have any meaningful experience with rising interest rates:
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See also Cleveland Fed Governor Loretta J. Mester believes interest rates should go higher... Richmond Fed Governor Thomas Barkin: I also want to reduce inflation,” “And if more increases are what’s necessary to do that I’m comfortable doing that.
That’s what 35 years of secular decline does to you. When the cycle reverses, no one is left who knows how to operate in the new environment.
See also The Fed bought up $2.7 trillion in toxic waste mortgage backed securities to reinflate the housing bubble and take those bad loans off the books of its Wall Street bankster accomplices. Next up: Powell will let the banksters transfer their non-performing commercial real estate loans to the Fed.
Remember, most trading is done now by algorithms. Who programs the algos? The “quants”. Who are the quants? Largely, folks hired into Wall Street after 2007 (i.e., zero experience with rising rates).
Hey, what could go wrong?