{"id":484408,"date":"2022-08-14T05:02:03","date_gmt":"2022-08-14T02:02:03","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/playing-powell-itics-as-inflation-target-in-perit\/"},"modified":"2022-08-14T05:02:03","modified_gmt":"2022-08-14T02:02:03","slug":"playing-powell-itics-as-inflation-target-in-perit","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/playing-powell-itics-as-inflation-target-in-perit\/","title":{"rendered":"#Playing Powell-itics as inflation target in perit"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2edcdad7599\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2edcdad7599\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/playing-powell-itics-as-inflation-target-in-perit\/#%E2%80%9CPlaying_Powell-itics_as_inflation_target_in_perit%E2%80%9D\" >&#8220;Playing Powell-itics as inflation target in perit&#8221;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/playing-powell-itics-as-inflation-target-in-perit\/#AMC_%E2%80%98gift_to_the_%E2%80%98Apes\" >AMC \u2018gift\u2019 to the \u2018Apes\u2019<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CPlaying_Powell-itics_as_inflation_target_in_perit%E2%80%9D\"><\/span>&#8220;Playing Powell-itics as inflation target in perit&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>\n<aside class=\"single__inline-module alignleft\">\n<div class=\"inline-module inline-module--columnist inline-module--author\">\n<div class=\"inline-module--author__img\">\n            <img decoding=\"async\" width=\"76\" height=\"69\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=76&amp;h=69&amp;crop=1\" class=\"attachment-nyp_columnist size-nyp_columnist\" alt=\"Charles Gasparino\" loading=\"lazy\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=152 152w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=114 114w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=76 76w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png?w=38 38w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2013\/08\/Gasparino_Charles_headshot.png 706w\" sizes=\"auto, (max-width: 76px) 100vw, 76px\"\/>      <\/div>\n<\/div>\n<\/aside>\n<p>Federal Reserve officials are not mincing words: The central bank and its chair, Jerome Powell, believe the 2% inflation target is sacrosanct and will risk a recession and bear market to get there.<\/p>\n<p>So why are markets rallying hard \u2014 as if Powell is about to soon cut interest rates, not raise them?<\/p>\n<p>The answer is that many traders and investors are convinced what was once the least political layer of government \u2014 the Fed \u2014 has become among the most politicized. Powell, whose main job is to keep inflation low, will jettison the inflation target for something much more palatable to <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ease Dems in Congress and economists in the Biden administration.<\/p>\n<p>It is fashionable in left-wing circles to accept inflation as\u00a0necessary. Rising prices don\u2019t matter so long as government budgets keep getting bigger.<\/p>\n<p>How soon they forget\u00a0the dreadful stagflation of the 1970s where the economy slowed while prices soared. It didn\u2019t matter if you had a job. You couldn\u2019t afford to put enough food on the table and gas in your car, much less buy a new one or eat in a restaurant.<\/p>\n<p>So where is Powell\u2019s head at?\u00a0<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"683\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/08\/GettyImages-1242321482.jpg?w=1024\" alt=\"This has caused an increase in some circles for buying stock. \" class=\"wp-image-23452695\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/08\/GettyImages-1242321482.jpg?quality=75&amp;strip=all&amp;w=2048 2048w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/08\/GettyImages-1242321482.jpg?quality=75&amp;strip=all&amp;w=1536 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/08\/GettyImages-1242321482.jpg?quality=75&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/08\/GettyImages-1242321482.jpg?quality=75&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>Some stock traders believe Powell will cave on the 2% target for something higher, maybe much higher. <\/figcaption><figcaption><span class=\"credit\">AFP via Getty Images<\/span><\/figcaption><\/figure>\n<p>Stock traders say Powell\u2019s history of monetary accommodation and recent dovish statements are sure signs he will cave on the 2% target for something higher, maybe much higher. So they\u2019re in a buying mood.<\/p>\n<p>Conversely,\u00a0Fed watchers who have sources in Powell\u2019s inner circle tell me the central bank understands the need to make inflation go away. That means higher rates, market declines and a possible recession.<\/p>\n<p>Neel Kashkari, the voluble president of the Minneapolis Fed, echoed much of this sentiment at the Aspen Institute Conference last week. Sure, he and his colleagues like the Consumer Price Index direction, falling to 8.5% in July from 9.1% the month prior. Yet he made clear the Fed is \u201cfar, far away from declaring victory\u201d on inflation.<\/p>\n<aside class=\"single__inline-module alignright\">\n    <\/aside>\n<p>In the meantime, what we have is a classic market disconnect, which is never a good thing because shareholders might not recognize the tsunami heading their way. It\u2019s rooted, unfortunately, in Powell\u2019s dwindling credibility as an inflation fighter, I am told. He\u2019s derisively known as \u201cBlinky\u201d on trading desks and not because there\u2019s something wrong with his vision.<\/p>\n<p>Based on his record, the belief on trading desks is that Powell is looking for a way out of his rate hikes. He will soon \u201cblink\u201d and rationalize a higher inflation target rather than become the target of the powerful leftist contingent that currently runs President Biden\u2019s economic policy.<\/p>\n<p>The July inflation drop, however minuscule, gives him the cover to begin reversing course.<\/p>\n<p>Of course, stock traders have been wrong before and in colossal fashion. In late 2007, the Dow hit a then-record of around 14,000, pricing in an economic recovery. A financial crisis and the Great \u00adRecession soon followed.<\/p>\n<p>They could be wrong again, unless Blinky blinks. It might be good for the markets in the short run. The rest of us, not so much.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"683\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/08\/GettyImages-1336138223.jpg?w=1024\" alt=\"These &quot;apes&quot; believe that AMC will be short stocked. \" class=\"wp-image-23452696\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/08\/GettyImages-1336138223.jpg?quality=75&amp;strip=all&amp;w=2048 2048w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/08\/GettyImages-1336138223.jpg?quality=75&amp;strip=all&amp;w=1536 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/08\/GettyImages-1336138223.jpg?quality=75&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/08\/GettyImages-1336138223.jpg?quality=75&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>Some of Aron\u2019s investors are retail traders who believe they\u2019re going to get rich buying shares of AMC.<\/figcaption><figcaption><span class=\"credit\">Getty Images for CinemaCon<\/span><\/figcaption><\/figure>\n<h2><span class=\"ez-toc-section\" id=\"AMC_%E2%80%98gift_to_the_%E2%80%98Apes\"><\/span>AMC \u2018gift\u2019 to the \u2018Apes\u2019<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Adam Aron, the CEO of AMC Theaters, has a tough job. Streaming was already putting pressure on his business long before it was shut down by COVID. With the pandemic largely a bad memory, and box office hits like \u201cTop Gun: Maverick,\u201d his company still loses money.<\/p>\n<p>Plus his investors are a bunch of retail traders who engage in conspiracy theories. They call themselves the \u201cApes\u201d for reasons best known to themselves. They think they\u2019re going to get rich buying shares of AMC because they discovered an evil cabal of short sellers who want to destroy the company.<\/p>\n<p>If they buy enough of it, they\u2019ll crush the shorts and make a mint.<\/p>\n<p>Crazy, yes, but Aron needs the crazy Apes to keep buying his stock because they\u2019re the only thing standing between AMC and a significant chance of a Chapter 11 restructuring. To that end, he is hawking a plan to get the Apes more hungry for his stock with a gift of a special dividend in the form of a new preferred share.<\/p>\n<aside class=\"single__inline-module alignright\">\n    <\/aside>\n<p>Once that happens, he says the company will thrive through a financial technique known as \u201cgood dilution.\u201d<\/p>\n<p>The Apes love what they\u2019re hearing. Aron is affectionately known among the peeps as the \u201csilverback,\u201d and shares are up 31% since the announcement.\u00a0\u00a0<\/p>\n<p>\u201cAMC stock which was trading at $3.19 on March 16, 2020 \u2014 the day the pandemic forced the closure of its theaters \u2014 closed Thursday at $25.46. That is an increase of 698%,\u201d Aron tells me.<\/p>\n<p>OK, but shares are also down around 66% from their high last year, and don\u2019t try and look up the term \u201cgood dilution\u201d on Investopedia because it doesn\u2019t exist. There\u2019s just dilution and that means your holdings are worth less because there\u2019s more stock floating around.<\/p>\n<p>Also dig deeper into Aron\u2019s plan, as professional traders like Marc Cohodes did, and you find there\u2019s an interesting transfer of wealth going down with all this \u201cgood dilution.\u201d<\/p>\n<p>Once Aron issues the new shares, Cohodes points out, the Apes will be handing Aron and bondholders a check. That check will help him pay down debt benefiting the large institutions who hold AMC\u2019s debt as the Apes keep AMC out of bankruptcy.<\/p>\n<p>Perhaps the real definition of \u201cgood dilution\u201d is \u201cbailout.\u201d\n                        <\/p><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/nypost.com\/2022\/08\/13\/playing-powell-itics-as-inflation-targer-in-peril\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Playing Powell-itics as inflation target in perit&#8221; Federal Reserve officials are not mincing words: The central bank and its chair, Jerome Powell, believe the 2% inflation target is sacrosanct and will risk a recession and bear market to get there. So why are markets rallying hard \u2014 as if Powell is about to soon cut&#8230;<\/p>\n","protected":false},"author":1,"featured_media":484409,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/08\/jerome-powell-inflation-target-1.jpg?quality=75&strip=all&w=1024","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[132278,4977,70550,70551,70552,78738,91261],"class_list":["post-484408","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-8-13-22","tag-amc","tag-federal-reserve","tag-inflation","tag-interest-rates","tag-jerome-powell","tag-recession"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/484408","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=484408"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/484408\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/484409"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=484408"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=484408"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=484408"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}