Will She or Won’t She? Ep. 109

* Tomorrow we have the most highly anticipated Fed meeting ever, but this will not be the last time I'll say this

* We'll also be anticipating October and December if the Fed does not raise interest rates in September

* The odds are they won't do it

* I put a Bloomberg story on my Facebook page: Yellen's former aid says a rate hike would be a serious error

* Why? The official target for the Fed Funds Rate now is at a range of 0 to .25 basis points

* The Fed is contemplating a rate of .25 which is the high end of the existing range

* If they decide to keep the rate at .25, all they've done is fixed the rate at the high end of the range

* This is not even a rate hike

* Why would this be a disaster?

* Isn't that an admission that the economy is fragile?

* When Alan Greenspan lowered interest rates to 1% after the dot com bubble and after Sept 11, people though, this is ridiculous!

* Now we are talking about raising rates to a quarter of that and it is considered a disaster

* What is going to change between September and October and October and December - unless they get worse

* The serious error is to prick the bubble economy

* The more serious error is for the Fed to raise rates and then admit that it was a mistake they lose credibility

* We're going into recession regardless

* If they raise rates, they will have to launch QE4 sooner

* Any rate hike will sow the seed of a rate cut

* On the topic of a recession, let's talk about the economic news we got today

* The first release we got was August Retail Sales

* A rise of .3 was expected and we got a gain of .2

* These are not great numbers

* The worse number of the day was Empire State Manufacturing: last month's horrible number was -14.92 the lowest since 2009

* Wall Street was looking for -.5

* September was -14.67; barely an improvement

* Back to back the worse numbers since the great recession

* The media barely reported on this number at all, but if it were good, it would have been in the headlines

* The Redbook Year over Year Same Store Sales Index has collapsed - right now it is at 1.3

* Previous years ranged between 3% and 5%

* Industrial Production was expected to fall by .2, but fell by .4

* Capacity Utilization dropped from 78 last month to 77.6

* Manufacturing output dropped as well to -.5

* Auto manufacturing had its biggest drop in 4 years

* I have been talking on this podcast about the Auto Bubble and we are getting more evidence that the bubble has burst

* The biggest decline in manufacturing in 4 years is pretty good evidence

* The fact that there is a huge inventory of unsold cars on dealers' lots is evidence that the market is saturated

* We got more news from business inventories: up .1 as expected

* Sales are also falling, so the inventory to sales ration is still 1.36, a notch below the record high from the '08 financial crisis

* Inventories have to come down a lot more because sales are not there

* They are not there because the economy is weak

* Earlier strong GDP growth was from inventory buildup

* All the evidence points to recession

* Employment numbers, which are theoretically good, are a lagging indicator

* All the leading indicators of the economy are flashing a warning

* Yet the media is ignoring the warnings and paying attention to Janet Yellen

* She is pretending the economy is strong so she can pretend to raise rates

* We need to allow the economy to go through that unfortunate crisis and allow the bubble economy to burst and the real economy to heal

* The Federal Reserve shot us up with all these monetary drugs so unfortunately we have to check into monetary rehab<...

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