The Pilots have left the plane...

…that is how it feels like now.

Again:

• US Administration —> use the sledgehammer to transform the US Economy

Look, I get it, I am not a big fan of globalization in combination with neo-liberalism either. Great for my trading account, but terrible for the people.

It was a mistake, that the left (Clinton (US), than Schröder / Fisher (Germany) and Blair (UK)) bought into neo-liberalism.

It was a mistake to hyper-globalize, at least for the middle and lower class. At the height of this, the left called hurting workers “deplorables” (Clinton again).

A disgrace for the left. This made Trump possible - I think - for all the right reasons: The tide did not lift all boats, it sunk most and some got blasted into the stratosphere.

But a sledgehammer is the wrong tool to change an economy (at least for the market, maybe not for the people, I do not know, time will tell). And my best guess is T. will be stubborn enough to not change fast. T. goes head-to-head with the market and the FED at the same time.

• FED

If you read what P. said this week, it is hard to believe that he does not hate the current US Administration.

Remember when the FED said, “we are looking through inflation here, it will be transitory”. Guess who was the president then? Then the clear shift just before the election, guess who they wanted to win the election? Just after the election the next shift, really?

When did P. say, “we are on autopilot (lowering liquidity)" (2018), who was the president? Hint: His name starts with a T.

Now the tone is: “well inflation is still too high, and tariffs are going to feed into this, so we cannot do anything here”.

At the same time liquidity does not meet the refinance requirements. Banks will be out of reserves in September (if nothing changes).

This is bad, very bad, the pilots have left the plane.

Sorry to say, but all that sounds like 2008. They (Gov. + FED) let Lehmann go bankrupt, Politicians told us (almost all the way) there is no recession luring and there will be no problems.

I am bearish, very, very bearish if the FED and the Administration do not come to their senses very soon and start working together again.

Make no mistake, the market will force the hand of the pilots. But right now, the egos seem to be more important than anything else, a lot of pain is needed to change this.

So, it is all a function of: how low does the market need to go until the egos get put into their place and everybody starts working together again?

My best guess is, lower, much lower, 40 to 50% DD on QQQs.

If they do not react, this can be 2008 all over again. Watch the FED and watch the government, wait until they react with force, until then protect.

Also, another scenario could play out: they come back to their senses (I am not seeing the signs for this now, that my problem here), enter the cockpit again fast and save the plane.

Then this will play out soon. But: no reaction = look out below!

Best Regards

Andreas