7th August 2024 > > Market manipulation.

tl;dr

The only game in town is the timing of when the politicians feel compelled to manipulate markets back into their favour. Arthur Hayes argues that will happen very soon indeed.

Market Snap

Market Wrap

We have retraced about 50% of the panicky sell-off, cementing the psychologically important $50k as a difficult hurdle to breach to the downside, though of course cryptos remain vulnerable to the wider global issues.

Market manipulation of the short-end is coming at us fast from central banks, and in size. When that doesn’t work, the long end will be forced down to reduce the extraordinary interest burden being incurred by fiscally incontinent governments worldwide, of all political hues.

Quantitative easing will soon be a permanent fixture deployed by bureaucrats pleasing their political masters, and that does not bode well for the poor and dispossessed.

Curious Cryptos’ Meme Corner

It is rare that something makes me laugh out loud, so here is one for posterity.

If you didn’t laugh, I guess you had to be there.

Curious Cryptos’ Commentary – A more serious take

Courtesy of Ambrose Evans-Pritchard:

Curious Cryptos’ Commentary – Arthur Hayes

https://cryptohayes.medium.com/spirited-away-4f37cf930273

Always an entertaining and informative read, Arthur this time goes into some detail about the Yen carry trade and the current unwind. If you want to understand more of the nuts and bolts, this will be a fabulous use of fifteen minutes of your time.

If you find trade diagrams dry or boring (personally I love them) then this is the key message from Arthur, which you know to be true:

“What do you do when the market is down but you have an election to win?

That’s an easy answer if you are a politician. Your number one goal is to secure re-election. Therefore, you print money and manipulate prices higher.

Like any politician, regardless of party affiliation or economic beliefs, Harris will instruct Yellen to use the monetary tools available to her to avert a financial crisis. Of course, that means the money printer will go brrr in some way, shape, or form. Harris will not want Yellen to wait — she’ll want Yellen to act forcefully and immediately.”

This was one of the messages from yesterday’s CCC. Note how Arthur is making the implicit but entirely correct assumption that no central bank anywhere in the world is independent of the politicians.