$8 BILLION of put options bought! Insane bearishness.

Summary

In a recent video, the host discusses the market's positive close despite Federal Reserve Chairman Powell's hawkish comments. They acknowledge a mistake regarding gender pronouns for Cleveland Fed President Loretta Mester. The host also analyzes the fiscal deficit, corporate tax payments, and the monetarist approach to economics, criticizing its current extreme form. They highlight the increase in bank profits due to higher interest income and the global fiscal boost from interest payments on securities. The conversation ends with insights on the U.S. dollar's strength, influenced by petroleum exports, and the potential implications of a recent drop in exports.

Takeaways

• 📈 The markets had a positive close despite initial fluctuations caused by Fed Chairman Powell's hawkish comments.
• 🎤 The speaker acknowledged a mistake regarding the gender of Cleveland Fed President Loretta Mester and expressed indifference towards Fed personalities.
• 💰 The U.S. has a current account deficit of 91 billion for September so far, which is seen as positive ahead of the quarterly corporate tax drain expected next week.
• 📊 The speaker predicts that the market may not see a significant decline due to the upcoming corporate tax payments, contrary to the 'monitor zombie' mentality.
• 🏦 Bank profits are up due to increased interest income from the Fed's rate hikes, which the speaker has been advocating for months as a positive for bank stocks.
• 📉 The speaker criticizes the current monetarist approach as leading to extreme market psychosis and delusion, with record bearish sentiment and put option purchases.
• 🌍 The European Central Bank's aggressive rate hike is seen as another example of fiscal expansion, which the speaker believes will contribute to sustained fiscal flows.
• 📈 The speaker suggests that the increase in interest payments on U.S. government securities will lead to a sustained period of elevated fiscal flows.
• 🛑 The U.S. economy's recent contraction was attributed to a sudden fiscal tightening, not rate hikes, which the speaker argues are arbitrary and not the cause of economic growth or decline.
• 🛒 A decrease in U.S. petroleum exports for three consecutive weeks might signal a potential correction in the dollar's strength, which the speaker sees as a temporary phenomenon.

Q & A

What day and date was the video script referring to?

The video script was referring to Thursday, September 8th.

What mistake did the speaker admit to making in a previous video?

The speaker admitted to mistakenly referring to the Cleveland Fed President Loretta Mester as a man instead of a woman.

What was the speaker's opinion on the Federal Reserve officials?

The speaker expressed a dismissive attitude towards the Federal Reserve officials, describing them as 'ridiculous' and stating that they don't care much about them.

What economic term did the speaker use to describe the current market situation?

The speaker used the term 'monetarist insanity' to describe the current economic situation.

What was the speaker's view on the recent market performance after Jay Powell's speech?

The speaker noted that the market initially dipped due to Jay Powell's hawkish comments but eventually closed strong.

What is the significance of the 91 billion deficit mentioned in the script?

The 91 billion deficit for the month of September, as of September 7th, indicates a positive financial balance that the speaker is pleased with, as it sets a good level before the expected corporate tax drain.

What was the speaker's prediction regarding the market's reaction to the September 15th quarterly corporate tax payment?

The speaker predicted that there might not be a significant decline in the market due to the tax payment, suggesting that the selling in advance of the payment might have been overdone.

What is the speaker's stance on the current monetarist belief system?

The speaker criticizes the current monetarist belief system as being extreme and delusional, suggesting that it has reached a level of psychosis.

Why did the speaker mention the increase in bank profits?

The speaker mentioned the increase in bank profits to highlight the benefits of higher interest income due to the Federal Reserve's rate hikes, which they had predicted and discussed previously.

What was the speaker's view on the recent actions of the European Central Bank (ECB)?

The speaker criticized the ECB for raising interest rates by 75 basis points, arguing that such actions are not effective in fighting inflation and are part of a misguided global trend.

What economic indicator did the speaker discuss in relation to the U.S. dollar's strength?

The speaker discussed U.S. petroleum exports as an economic indicator that has been underpinning the strength of the U.S. dollar.

What recent development in petroleum exports did the speaker find significant?

The speaker found it significant that there has been a drop in U.S. petroleum exports for three consecutive weeks, which might indicate a potential correction in the dollar's strength.