{"id":31910,"date":"2018-03-04T19:11:37","date_gmt":"2018-03-05T00:11:37","guid":{"rendered":"http:\/\/olduvai.ca\/?p=31910"},"modified":"2018-03-04T19:11:37","modified_gmt":"2018-03-05T00:11:37","slug":"doug-noland-no-bailouts-anytime-soon-so-let-those-short-bets-run","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=31910","title":{"rendered":"Doug Noland: No Bailouts Anytime Soon, So Let Those Short Bets Run"},"content":{"rendered":"
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Doug Noland: No Bailouts Anytime Soon, So Let Those Short Bets Run<\/a><\/h3>\n<\/header>\n
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Now that equities are behaving the way they should have since, oh, 2013 \u2013 volatile with a pronounced down bias \u2013 everyone is wondering how far the crazy will go before the Fed starts buying the S&P 500.<\/p>\n

Short sellers, of course, want to know when to close out their at-long-last-profitable bets (seeDavid Einhorn<\/strong><\/a>). Cautious investors (see Warren Buffett<\/strong><\/a>) with money on the sidelines want to know when to step in and buy. And fully invested optimists (the vast majority these days), are wondering if they should keep buying the dips till the cavalry arrives.<\/p>\n

Credit Bubble Bulletin\u2019s Doug Noland has been through at least three such cycles in his career as a short seller, and he\u2019s parsed the testimony of new Fed chair Jerome Powell to reach a conclusion that the shorts will love and the longs will hate. Here\u2019s an excerpt from his latest post<\/strong><\/a>:<\/p>\n

The new Chairman is not in awe and, at least to commence his term, seems disinclined to pander to the markets. With greed waning, the change in tone was difficult for an uncomfortable Wall Street to ignore. Markets have grown too accustomed to central bank chiefs with an academic view of \u201cefficient\u201d markets \u2013 scholars wedded to doctrine that it\u2019s the role of central banks to bolster and backstop securities markets. Powell knows better. As the old saying goes, \u201che knows where the bodies are buried.\u201d Wall Street fancies the na\u00efve. FT: \u201c\u2018Powell Put\u2019 Assumption Challenged as Fed Chief Shows Hand.\u201d<\/p>\n

I believe Powell recognizes the perils associated with backstopping a speculative marketplace. That doesn\u2019t mean he won\u2019t be compelled to do it. At some point, he\u2019ll have little choice. But it likely means he will not act in haste. The Powell Fed will be much more cautious in delivering market assurances.<\/p><\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Doug Noland: No Bailouts Anytime Soon, So Let Those Short Bets Run Now that equities are behaving the way they should have since, oh, 2013 \u2013 volatile with a pronounced down bias \u2013 everyone is wondering how far the crazy will go before the Fed starts buying the S&P 500. Short sellers, of course, want […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[2015,16861,303,16888,661,662,3650],"class_list":["post-31910","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bailout","tag-doug-noland","tag-fed","tag-jerome-powell","tag-qe","tag-quantitative-easing","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31910","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31910"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31910\/revisions"}],"predecessor-version":[{"id":31911,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31910\/revisions\/31911"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31910"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31910"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31910"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}