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Still More Perma-Bull Nonsense
by David Stockman LewRockwell.com
It’s probably time to give the wet-behind-the-ears 30-something perma-bulls of Wall Street a break. After all, they have never experienced hard times, and now they get an old duffer like Ed Hyman, Chairman of Evercore-ISI, telling them that the Fed has already way over-tightened and needs to “pause” forthwith.
What’s especially galling about Hyman’s bubblevision chatter this AM is that it was based on a piece of nonsense of the kind that never stops wafting from the financial sickbeds of Wall Street. To wit, he claimed that the “effective” Fed funds rate is actually 7%, adjusted for QT (quantitative tightening).
Oh, c’mon. The Fed’s teensy-tiny draining of its elephantine balance sheet is designed to help enforce its current 4.83% Fed funds rate. After all, they can’t get rates higher unless they drain away some of the massive floods of liquidity that have been pumped into the financial system during recent years and decades.