Good Wednesday morning. Quick hitters this AM.

1) We got a small miss on CPI data and the markets fell out of bed, with small caps and regional banks down 4% with big banks down 3%. Folks, that’s called “illiquidity”. Post QE, the Fed IS our system, as the buyers of first and last resort. AKA financial engineering, as covered in “The Big Bribe”. Until QE, throughout my career, on days like yesterday there was always a "flight to safety trade”. Bonds ALWAYS rallied on big sell-offs in equites. But those days are gone. Bonds got smoked yesterday, along with stocks, precious metals, miners, etc. Remember the days when gold and silver were inflationary assets? The dollar jumped on the news, so there’s that…but that’s just another sign of the lack of (global) liquidity. Trust me when I tell you that its days like yesterday that really get the Fed’s attention. All it takes is a few more days like yesterday and a March rate cut will be right back on the table. 

2) Having said that, no…y...