Business

Submitted by Jeff Opdyke via The Sovereign Investor,

Gold has a message for the market: You’re a nut if you trust the Fed.

In the days since the arbiters of American monetary policy raised interest rates on December 16 - the first rate hike in nearly a decade - gold prices have pretty much gone nowhere. On December 15, the day before the Fed’s announcement, gold closed near $1,065. As I write this, it’s at $1,070 … and it has seen a high of $1,084 and a low of $1,052.

America has never - ever - avoided a recession when Chicago's Business Barometer has collapsed to these levels. At 42.9, missing the expectations of 50.0 by the most ever, down from 48.7 in November, the final US economic data point of the year sums up perfectly what a disaster Yellen has hiked rates into.

Recession!!!

The details are ugly across the board:

One week before the Fed hiked rates by 25 bps we warned that "nobody knows if the Fed can actually do it", citing not only our previous post on the topic, explaining the lack of a detailed framework by the Fed on the mechanics of the rate hike, but also a Bloomberg piece in which we noted the broader logistical concern: "with so much cash sloshing around, will Fed officials be able to nudge rates as high as they want?

Two days, ago we noted that hedge funds are now dropping like flies in a year in which generating alpha has become virtually impossible for the majority of the vastly overpaid 2 and 20 "smart money" out there (and where levered beta is no longer the "sure thing" it used to be when the Fed was pumping trillions into stocks) when we reported that Seneca Capital, the $500 million multi-strat hedge fund belonging to Doug Hirsh (of Sohn Investment Conference fame), is shutting down.

Then, in keeping with what has become a daily tradition, we asked a simple question: who's next:

It appears the machines will have their work cut out today to keep the 'green for 2015' dream alive today as the last 30 minutes have seen selling accelerate across stock and commodity markets with bonds and the dollar bid.

Stocks are suddenly offered...

And VIX well bid...

Crude is tumbling again...

And Copper is getting slammed...

As The Dollar surges (EUR drops)...

And bonds are bid...

Keep dreaming - you can do it!! 2058.90 is all that matters now!