On Tuesday evening I was tempted to do a blog post with the same message I’ve delivered many times over the past  decade or so: we are/were within 1 week and 1% of the initiation of another protracted series of stock market drops.  True to form, within 48 hours a central banker blinked and dropped another sugar bomb. (don’t take my word for it -> sign up for a free newsletter account and watch what I posted on Tuesday)

This time (today) it was none other than NY Fed Prez Williams doing the sugar bombing.  That this happened while the SPX & Dow were approx 1% away from all time highs was probably a little embarrassing for Williams. I mean if you’re concerned about the economy while the stock market is at all time highs, there must be something structurally foreboding.

Turns out there is. The Fed, other central banks, and of course the Greedometers know the U.S. economy is 4 months from entering a deep and painful balance sheet recession –like what was seen from Dec 07 to March 09. Williams’ sugar bomb today will push the recession entry point to Dec. It will also cause a near term sugar rush and reduce (prevent) the size of a near term market drop.

So, now the Fed must deliver the goods at the July 31 FOMC meeting. Translation: you better give us a 50bp rate cut or you’ll see the market react like an addict with its supply cut off.

Ladies & Gentlemen, I give you your so-called market economy.