Month: September 2017

While the politicians and the mainstream media are playing down any concerns about the US debt ceiling, Treasury Bill market participants are seeing chaos as the yield curve has snapped across the Sept-Oct divide with panic-buying in bills that mature ahead of the September-end (Q3-end liquidity needs), and dumping of October bills.

 

As Treasury Cash declines…

 

The T-Bill curve is steepening drastically… to its steepest yet…

As the debt-ceiling anxiety indicator is exploding…

With the short-end bid and anything maturing just after September is getting crushed…

As a reminder – USA Sovereign risk has spiked to double that of Germany's recently – the highest since Lehman…

As we noted previously, one potential catalyst for the spike in odds of an adverse outcome is that earlier today, the chairman of the conservative House Freedom Caucus said aid for victims of Hurricane Harvey should not be part of a vehicle to raise the debt ceiling.

Quoted by The Hill, Rep. Mark Meadows (R-N.C.), a Trump ally who leads the conservative caucus, said disaster aid should pass on its own, apart from separate measures the government must pick up in September to raise the nation's borrowing limit and fund the government.

“The Harvey relief would pass on its own, and to use that as a vehicle to get people to vote for a debt ceiling is not appropriate,” he said an interview with The Washington Post, signaling agreement with Trump on the approach. It would “send the wrong message” to add $15 to $20 billion of spending while increasing the debt ceiling, Meadows added.

Ironically, it was precisely the Harvey disaster that prompted Goldman yesterday to lower its odds of a debt ceiling crisis from 50% to 33%, on the assumption that it would make conseratives more agreeable to a compromise, when in fact precisely the opposite appears to have happened, and the new dynamic is now playing out in the market where the odds of a government shutdown have never been greater.

So what does it mean for the US if the T-Bill market is correct and a debt ceiling deal is not reached in time over the next 30 or so days? For an unpleasant perspective on what may happen next, here is Deutsche Bank's preview of what a debt ceiling crisis would look like:

Guide to a Debt Ceiling Crisis

 

If Congress doesn’t act in time and the above fallbacks are deemed untenable, the Treasuries with affected principal or coupon payments would likely be handled in two ways, according to scenarios considered by SIFMA. The first option would extend maturity and coupon payments, where payment decisions are explicitly announced by Treasury one day at a time, and both coupon and principal payments are ultimately made in full once the debt limit is raised. These securities would be able to be transferred normally, and a market for them would develop. While the security is not “defaulted” as its maturity date has been extended in systems, the extension would likely constitute a change in terms that triggers CDS.

 

The other outcome would a failure pay , where Treasury does not set a date for future payment, and there is no pre-announcement (or it comes last minute). A failure to pay would mean the affected securities drop off the Fed system and cannot be transferred normally. A market would eventually develop, but once there is a failure to pay and the securities are not extended in systems, they cannot be “unmatured” and maturity extended.

 

Regardless of whether it is a payment extension or a failure to pay, the longer Treasury remains in default, the worse the situation for financial markets. Market reactions and market functioning might be comparatively stable at first, but the concern is of widespread panic and systemic market disruptions.

 

As for immediate ramifications, noted that CDS would likely triggered either default scenario , as sovereign CDS is triggered by either a failure to pay, repudiation/moratorium, or a restructuring. A failure to pay occurs when a sovereign doesn’t pay principal or interest when due, with a 3 day grace period applying to that due date in the case of the US. In our view, a CDS trigger would apply to all debt obligations backed by the full faith and credit of the US government (including GNMA, FHA securities, etc.). A CDS event is unlikely to have much direct market impact, however, as net CDS exposure is a modest $1bn as of the end of July, down from about $4bn in 2013 and its peak near $6bn in 2011. As long there is no one particular bank that is overly short protection, we do not expect any knock-on CDS event. 5y CDS is currently suggesting no real concern, sitting at the bottom end of its 19-24bp ytd range. While the supply of deliverable securities is more than adequate to satisfy the outstanding contracts, demand deliverable bonds may cause distortions . The 2.25% Aug 2046 bonds are currently the cheapest-to-deliver into the CDS, and would likely trade upward in price towards recovery value.

 

Among Treasury market investors, money market funds are a key group possible propagation risk . Even after money fund reform, government funds continue to be quoted at a stable $1 NAV, leaving them vulnerable to perceptions around “breaking the buck,” and therefore large scale investor redemptions in an extreme scenario. Treasuries accounted for $678bn of money funds $2.7tn AUM as of the end of July, while Treasury repo makes up another $595bn (with about $150bn of that made up by RRP’s with the Fed). Money funds’ Treasury holdings tend to be concentrated in securities maturing in the first month – more than 40% of their Treasuries held at the end of July matured in August. This suggests that the bias will be for money funds to accumulate more securities maturing around the debt ceiling, though they may be cautious around specific issues. However, it’s worth noting that they then owned over $40bn combined in the October 5 bills, October 12 bills, and October 15 coupon maturities – more than 20% of the amount  outstanding. Of the $1.3tn of Treasuries (bills and coupons) that mature between October and mid-January, money funds own about 19% – potentially an important factor in the event that a default drags out. Also note that maturing notes and bill holdings are concentrated in a relatively few fund families.

 

Potential outflows from money funds has implications repo market . Possible forced selling of Treasuries, money funds would likely cut back on their provision of financing to banks through repo. While reforms have reduced banks’ reliance on short term funding and put them in a place to better withstand a significant reduction in availability of things like repo funding, a sharp contraction in overall repo financing would likely have ramifications for market functioning and liquidity.

 

In terms of market plumbing, given the reliance Treasuries managing credit risk derivatives , a default event could spread quickly to derivatives market via a sudden drop in the valuation of UST collateral. This loss in value would trigger calls for additional collateral, and given the widespread use of UST’s, it is possible that a number of market participants fail to post sufficient collateral; this would constitute a default in a centrally cleared trade. The requirement that the surviving counterparty replace the risk of that trade could subsequently result in a major revaluation of all related trades, triggering new collateral calls, and potentially create a vicious cycle.

 

 

How might the Fed might react to a major disruption?

 

The question is complicated by a possible reinvestment decision in the September meeting, but extracting that for the time being, there is nothing immediately apparent in the Federal Reserve Act that would preclude the Fed from purchasing defaulted Treasury securities. This would likely not be a proactive step, as the Fed would not want to be seen “bailing out” the Treasury, but given the extremity of a default situation, the Fed would be governed by its financial stability mandate.

 

The Fed could intervene by removing defaulted securities from the market and sell or repo non-defaulted issues to provide the market with good collateral. Additional emergency facilities similar to those seen in 2008 are another option wherein the Fed could support money funds by accepting their assets and providing liquidity. To the extent that liquidity concerns became extreme the Fed could obviously move to add further monetary accommodation especially if it perceived knock on effects to the growth and inflation outlook.

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Authored by Lance Roberts via RealInvestmentAdvice.com,

Just recently the Federal Reserve Bank of New York released its quarterly survey of the composition and balances of consumer debt. Importantly, it was the fact that total indebtedness reached a new all-time record that sent the mainstream media abuzz with questions about the economic implications. Here is the graphic that accompanied the commentary.

One of the more interesting points made, in order to support the bullish narrative, was that record levels of debt is irrelevant because of the rise in disposable personal incomes. The following chart was given as evidence to support that claim.

Looks pretty good, as long as you don’t scratch too deeply. Let’s scratch a little.

There are several problems with this analysis.

First, the calculation of disposable personal income, income less taxes, is largely a guess and very inaccurate due to the variability of income taxes paid by households.

Secondly, but most importantly, the measure is heavily skewed by the top 20% of income earners, needless to say, the top 5%. As shown in the chart below, those in the top 20% have seen substantially larger median wage growth versus the bottom 80%.

(Note: all data used below is from the Census Bureau and the IRS.)

Lastly, disposable incomes and discretionary incomes are two very different animals. Discretionary income is what is left of disposable incomes after you pay for all of the mandatory spending like rent, food, utilities, health care premiums, insurance, etc. According to a Gallup survey, it requires about $53,000 a year to maintain a family of four in the United States. For 80% of Americans, this is a problem even on a GROSS income basis.

This is why record levels of consumer debt is a problem. There is simply a limit to how much “debt” each household can carry even at historically low interest rates.

It is also the primary reason why we can not have a replay of the 1980-90’s.

“Beginning 1983, the secular bull market of the 80-90’s began. Driven by falling rates of inflation, interest rates, and the deregulation of the banking industry, the debt-induced ramp up of the 90’s gained traction as consumers levered their way into a higher standard of living.”

“While the Internet boom did cause an increase in productivity, it also had a very deleterious effect on the economy.

 

As shown in the chart above, the rise in personal debt was used to offset the declines in personal income and savings rates. This plunge into indebtedness supported the ‘consumption function’ of the economy. The ‘borrowing and spending like mad’ provided a false sense of economic prosperity.

 

During the boom market of the 1980’s and 90’s consumption, as a percentage of the economy, grew from roughly 61% to 68% currently. The increase in consumption was largely built upon a falling interest rate environment, lower borrowing costs, and relaxation of lending standards. (Think mortgage, auto, student and sub-prime loans.)

 

In 1980, household credit market debt stood at $1.3 Trillion. To move consumption, as a percent of the economy, from 61% to 67% by the year 2000 it required an increase of $5.6 Trillion in debt.

 

Since 2000, consumption as a percent of the economy has risen by just 2% over the last 17 years, however, that increase required more than a $6 Trillion in debt.

 

The importance of that statement should not be dismissed. It has required more debt to increase consumption by 2% of the economy since 2000 than it did to increase it by 6% from 1980-2000.

 

The problem is quite clear. With interest rates already at historic lows, consumers already heavily leveraged and economic growth running at sub-par rates – there is not likely a capability to increase consumption as a percent of the economy to levels that would replicate the economic growth rates of the past.“

This can be clearly seen in the following chart of personal consumption expenditures (PCE) and debt. Up until 2000, debt expansion and PCE rose in tandem. But beginning in 2000, as economic growth rates plunged to 2%ish, which isn’t strong enough to foster job growth beyond population growth, debt took the lead in supporting consumption. This was primarily centered on those in the bottom 80% who were simply trying to maintain their current standard of living.

There is a vast difference between the level of indebtedness (per household) for those in the bottom 80% versus those in the top 20%.

Of course, the only saving grace for many American households is that artificially low interest rates have reduced the average debt service levels. Unfortunately, those in the bottom 80% are still having a large chunk of their median disposable income eaten up by debt payments. This reduces discretionary spending capacity even further.

The problem is quite clear. With interest rates already at historic lows, the consumer already heavily leveraged and wage growth stagnant, the capability to increase consumption to foster higher rates of economic growth is limited.

With respect to those who say “the debt doesn’t matter,” I respectfully argue that you looking at a very skewed view of the world driven by those at the top.

Yes, the ongoing interventions by the Federal Reserve have certainly boosted asset prices higher, but that has only served to widen the wealth gap between the top 20% of individuals that have dollars invested in the financial markets and everyone else. What monetary interventions have failed to accomplish is an increase in production to foster higher levels of economic activity.

Corporate profitability is illusory also as it has primarily been a function of cost cutting, increased productivity, stock buybacks, and accounting gimmicks. While this has certainly provided an illusion of economic prosperity on the surface, however, the real economy remains very subject to actual economic activity. It is here that the inability to re-leverage balance sheets, to any great degree, to support consumption provides an inherent long-term headwind to economic prosperity.

With the average American still living well beyond their means, the reality is that economic growth will remain mired at lower levels as savings continue to be diverted from productive investment into debt service.  The issue, of course, is not just a central theme to the U.S. but to the global economy as well.  After eight years of excessive monetary interventions, global debt levels have yet to be resolved.

Debt is a negative thing for the borrower. It has been known to be such a thing even in biblical times as quoted in Proverbs 22:7:

“The borrower is the slave to the lender.”

Debt acts as a “cancer” on an individual’s wealth as it siphons potential savings from income to service the debt. Rising levels of debt, means rising levels of debt service that reduces actual disposable personal incomes that could be saved or reinvested back into the economy.

The mirage of consumer wealth has been a function of surging debt levels. “Wealth” is not borrowed, but “saved,” and this is a lesson that too few individuals have learned.

Until the deleveraging cycle is allowed to occur, and household balance sheets return to more sustainable levels, the attainment of stronger, and more importantly, self-sustaining economic growth could be far more elusive than currently imagined.

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For the second month in a row (and 3rd of the last 4), US construction spending dropped in July. This dragged the year-over-year growth to just 1.8%.

The last two times construction spending growth slowed to this rate, the US economy collapsed into recession…

Ironically, according to BLS, construction jobs surged in the latest month – up 28k – the most since February?

But it's probably different this time – this time we have the internet, and eyeballs, and all that AdSpend (oh wait, didn't WPP just collapse?)

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As expected, last month‘s one-time, outlier surge in leisure & hospitality, and education & health jobs was not only revised lower, but is fully gone in the month of August. Furthermore, while according to the original July report not a single category had lost jobs, that is no longer the case as the chart below shows, with what the DOL now admits were losses in government, construction, retail and information jobs.

So what happened in August? There were several notable observations: as SouthBay Research points out, the recent surge in Leisure and Hospitality jobs has hit a brick wall, barely growing in August, as consumer spending on recreational activities has peaked. Furthermore, low paid retail jobs continue to stagnate as the industry implodes, offset by a surprise rebound in mining and logging.

Another surprise observations was the completely fabricated and patently untrue jump of 13,000 jobs in auto payrolls. This ridiculous number will be promptly revised lower next month as it comes at time when GM and all other OEMs are either furloughing or slashing payrolls, as several companies have announced extended factory shutdowns. With the Harvey hit, we expect this weakness to persist in coming months.

Next, as Southbay also notes, Association & Membership Payrolls continue their surge: +13K in August.  Curiously, this month saw greater enrollment in clubs than the entire year for almost every year since the recession ended, thus invalidating the credibility of the number.

There was a silver lining: while the pace of job creation slowed notably, the jobs added were of the higher paying variety:

• Professional Services (+39.9K): Strong white collar hiring (technical services +22K) offset rather limp temp worker hiring.
• Manufacturing (+36K): Driven entirely by the above-noted surprise jump in Auto payrolls boosted this sector
• Construction (+28K)  Not surprising given continued robust real estate demand
• Health care (+20K) To be expected as the US population ages ever faster; big job increases for physicians (+7.5K) and hospital (+6.4K) hiring.

Curiously, the strongest job category of the “Obama recovery”, waiters and bartenders, also known as “employment in food services and drinking places” was changed little in August, adding only 9,000 jobs in the past month, after a whopping increase of 53,000 in July as the US restaurant recession finally comes home to roost (and force a sharp slowdown in restaurant hiring). If this sector, which has contibuted the vast majority of marginal jobs over the past 5 years is in peril, the next recession has to be just around the corner.

But going back to the key problem area identified by SouthBay, we note that consumer spending has peaked:

• Leisure & Hospitality was flat (as expected). Restaurants were reporting sluggishness
• Retail was flat and that’s a bad sign going forward.  Combined clothing+ department store payrolls were flat – despite announced layoffs and store closures.  That means these layoffs have are still in the pipeline and will be a drag on the next few months’ payrolls.

Summarizing all of the above, here are two charts that breakdown job creation in July and August by key sector…

… and a more detailed breakdown from Bloomberg:

Keep in mind: none of the data above includes the effects from Hurricane Harvey, which according to estimates, is expected to wipe out at least 50-100K jobs from the September payrolls report.

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With soft survey data scrambling the macro traders minds currently (China manu good, services crash; Canada bad – despite surging GDP?), all eyes swing to US data this morning with Markit's Manufacturing PMI weaker than July (though beating expectations modestly) with a "renewed stuttering of the manufacturing economy during August." However, for those who need some good news, ISM's survey of the same manufacturing economy saw them the most exuberant since April 2011!

Manufacturing PMI printed slightly above the flash reading of 52.5 but at 52.8, it is well down from July's 53.3. Under the hood, production levels increased at the weakest rate since Brexit (June 2016), and as production weakened, prices surged – On the price front, cost burdens increased at the fastest rate since April and output price inflation was the strongest in three months. Panellists noted that input cost inflation was driven by higher raw material prices, especially steel and electrical components. Firms generally passed these rises on to clients through increased factory gate charges.

But you can ignore all that because ISM's Manufacturing survey exploded higher to 58.8 – above all economists' estimates – to the highest since April 2011…

This surge comes despite a drop in New Orders (and new export orders) and plunge in customer inventories.

Employment, however, spiked to its highest since June 2011.

Commenting on the final PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“Although still above the 50 ‘no change’ level, the decline in the PMI shows signs of a renewed stuttering of the manufacturing economy during August. The latest reading indicates one of the weakest improvements in the overall health of the sector seen over the past year, and translates into disappointing signals for comparable official data.

 

“The survey brings more encouraging signs of improved domestic demand, however, with orders for both consumer goods and investment goods such as plant and machinery on the rise, boding well for the wider economy to continue to expand as we move through the second half of 2017.”

Additionally, Williamson warns…

“The drop in the output index indicates that manufacturing could act as a drag on the economy in the third quarter, with exports dampening order book growth.

It appears so…

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President Trump was crucified by the mainstream media a few weeks back after hosting an improvised press conference and saying there was “blame on both sides” for the violence in Charlottesville that resulted in the death of a counterprotester.  The comments resulted in most of Trump’s advisory councils being disbanded, as CEO’s around the country pounced on the opportunity to distance themselves from the administration, and heightened calls from CNN for impeachment proceedings.

The problem is that while Trump’s delivery probably could have been a bit more artful, the underlying message seems to be proving more accurate with each passing day and each new outbreak of Antifa violence.

As Politico points out today, previously unreported FBI and Department of Homeland Security studies found that “anarchist extremist” group like Antifa have been the “primary instigators of violence at public rallies” going back to at least April 2016 when the reports were first published.

Federal authorities have been warning state and local officials since early 2016 that leftist extremists known as “antifa” had become increasingly confrontational and dangerous, so much so that the Department of Homeland Security formally classified their activities as “domestic terrorist violence,” according to interviews and confidential law enforcement documents obtained by POLITICO.

 

Since well before the Aug. 12 rally in Charlottesville, Virginia, turned deadly, DHS has been issuing warnings about the growing likelihood of lethal violence between the left-wing anarchists and right-wing white supremacist and nationalist groups.

 

Previously unreported documents disclose that by April 2016, authorities believed that “anarchist extremists” were the primary instigators of violence at public rallies against a range of targets. They were blamed by authorities for attacks on the police, government and political institutions, along with symbols of “the capitalist system,” racism, social injustice and fascism, according to a confidential 2016 joint intelligence assessment by DHS and the FBI.

Not surprisingly, law enforcement officials noted that the rise in Antifa violence overlapped perfectly with Trump’s campaign as they made appearances at rally after rally to incite chaos…all the while making it seem as if violent, racist Trump supporters were to blame.

“It was in that period [as the Trump campaign emerged] that we really became aware of them,” said one senior law enforcement official tracking domestic extremists in a state that has become a front line in clashes between the groups. “These antifa guys were showing up with weapons, shields and bike helmets and just beating the shit out of people. … They’re using Molotov cocktails, they’re starting fires, they’re throwing bombs and smashing windows.”

 

Almost immediately, the right-wing targets of the antifa attacks began fighting back, bringing more and larger weapons and launching unprovoked attacks of their own, the documents and interviews show. And the extremists on both sides have been using the confrontations, especially since Charlottesville, to recruit unprecedented numbers of new members, raise money and threaten more confrontations, they say.

 

“Everybody is wondering, ‘What are we gonna do? How are we gonna deal with this?’” said the senior state law enforcement official. “Every time they have one of these protests where both sides are bringing guns, there are sphincters tightening in my world. Emotions get high, and fingers get twitchy on the trigger.”

 

As you’ll likely recall, one such event came in June 2016 when Antifa showed up at a rally in Sacramento and began violently attacking protestors with canes and knives.  Of course, with the whole thing caught on video, it’s pretty clear who the instigators of violence were (see our post here).

Some of the DHS and FBI intelligence reports began flagging the antifa protesters before the election. In one from last September, portions of which were read to POLITICO, DHS studied “recent violent clashes … at lawfully organized white supremacist” events including a June 2016 rally at the California Capitol in Sacramento organized by the Traditionalist Workers Party and its affiliate, the Golden State Skinheads.

 

According to police, counter-protesters linked to antifa and affiliated groups like By Any Means Necessary attacked, causing a riot after which at least 10 people were hospitalized, some with stab wounds.

 

At the Sacramento rally, antifa protesters came looking for violence, and “engaged in several activities indicating proficiency in pre-operational planning, to include organizing carpools to travel from different locations, raising bail money in preparation for arrests, counter-surveilling law enforcement using three-man scout teams, using handheld radios for communication, and coordinating the event via social media,” the DHS report said.

Insane video. Crowd sees any signs of “Nazis” and they run&attack. A lot of people bleeding/getting maced. @ABC10 http://pic.twitter.com/PoFhILfZ95

— Frances Wang (@FrancesWangTV) June 26, 2016

 

Of course, it’s not just California.  As the FBI and DHS note, the Antifa group operates much like terrorist cells with disconnected groups all over the country.

Even before Charlottesville, dozens and, in some cases, hundreds of people on both sides showed up at events in Texas, California, Oregon and elsewhere, carrying weapons and looking for a fight. In the Texas capital of Austin, armed antifa protesters attacked Trump supporters and white groups at several recent rallies, and then swarmed police in a successful effort to stop them from making arrests.

 

California has become another battleground, with violent confrontations in Berkeley, Sacramento and Orange County leading to numerous injuries. And antifa counter-protesters initiated attacks in two previous clashes in Charlottesville, according to the law enforcement reports and interviews.

More recently, the antifa groups, which some describe as the Anti-Fascist Action Network, have evolved out of the leftist anti-government groups like “Black bloc,” protesters clad in black and wearing masks that caused violence at events like the 1999 Seattle World Trade Organization protests. They claim to have no leader and no hierarchy, but authorities following them believe they are organized via decentralized networks of cells that coordinate with each other. Often, they spend weeks planning for violence at upcoming events, according to the April 2016 DHS and FBI report entitled “Baseline Comparison of US and Foreign Anarchist Extremist Movements.”

 

Dozens of armed anti-fascist groups have emerged, including Redneck Revolt and the Red Guards, according to the reports and interviews. One report from New Jersey authorities said self-described antifa groups have been established in cities including New York, Philadelphia, Chicago and San Francisco.

Meanwhile, even by the spring of 2016, the FBI had already grown concerned enough about Antifa that they began investigating overseas trips by activists out of concerns that they were coordinating with European anarchists to stage large bombings in the U.S.

By the spring of 2016, the anarchist groups had become so aggressive, including making armed attacks on individuals and small groups of perceived enemies, that federal officials launched a global investigation with the help of the U.S. intelligence community, according to the DHS and FBI assessment.

 

The purpose of the investigation, according to the April 2016 assessment: To determine whether the U.S.-based anarchists might start committing terrorist bombings like their counterparts in “foreign anarchist extremist movements” in Greece, Italy and Mexico, possibly at the Republican and Democratic conventions that summer.

 

Some of the antifa activists have gone overseas to train and fight with fellow anarchist organizations, including two Turkey-based groups fighting the Islamic State, according to interviews and internet postings.

Alas, we suspect you’ll hear precisely nothing about any of this on CNN.

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The biggest money is made when you identify a major trend and get in early.

In early 2017, we forecast to our clients that the $USD would be collapsing this year. At that time the financial media was rife with “gurus” talking about how the $USD was going to roar higher. Indeed we repeatedly read that “2017 was going to be he year of the $USD.”

Since that time the $USD has dropped like a brick against every major world currency.

This has ignited a major rally in Gold and other $USD hedges. As we write this, the precious metal has broken out of a 7-year downtrend. And based on the move in real rates, it looks like we’re going to $1,400 in the next few months.

If you’re not taking steps to actively profit from this, it's time to get a move on.

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Chief Market Strategist

Phoenix Capital Research

 

 

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One of the justifications for today’s poor payrolls report is that calendar effects and seasonal adjustments (which oddly are never mentioned when the jobs report is stellar) had an undue influence. And, to an extent, that is true: as the chart below shows, August (and September) have traditionally been the weakest payrolls month over the past two decades.

Conveniently, there is a simple way to normalize for seasonal adjustments: look at unadjusted data.

Unfortunately, here we get another confirmation that the economy is rapidly slowing down, because when looking at the unadjusted payrolls for August, and specifically the year-over-year increase which eliminates all intra-year seasonal noise, we find a 16% drop in the number of annual jobs added, which in August amounted to 2,100K, versus 2,502K as of August 2016 and 2.814K in 2015 when the series peaked.

In context, this was the biggest annual drop on a percentage basis for unadjusted job creation since the financial crisis. Perhaps instead of hiking, the Fed should take a long hard look at that QE4 button: after all, stocks already have…

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