Federal Reserve

Fed raises rates for the first time in seven years, to 1/4 of a point. This tiny hike shows the economy still stinks.

Stocks rise contrary to what might be expected.

"After the Fed’s November meeting, when the Fed decided not to hike interest rates, the stock market fell, indicating the disappointment of market participants.  Because lower interest rates tend to raise asset prices, the market decline was an indication of disapproval from market participants.
At the Fed’s December 16th meeting, in keeping with expectations, they announced they will increase interest rates for the first time in nearly a decade. After the announcement, the stock market surged.
While I am always reluctant to associate movements in the stock market with specific causes, this one looks pretty clear. The surge in the stock market came right after the announcement.
Following the conventional wisdom, higher interest rates should lower asset prices, so the rise in the stock market is all the more interesting. Investors appear to believe that the damage being done to the economy as a result of artificially low interest rates is greater than the boost to asset prices that come with low rates."

Good.

Negative interest rates are absurd.

"What we can’t forget is that the real rate of interest can never be negative. The real, or natural, rate of interest is a function of the preference for present goods over future goods. A bird in the hand is worth two in the bush, in other words. A negative natural rate of interest would mean that someone prefers less in the future to more in the present. Given the choice between $20 today and $10 tomorrow, you would prefer the $10 tomorrow. That is a complete absurdity that would never happen in reality. But when you realize that most of the assumptions made by mainstream economists in creating their models are absurd, unrealistic, and nonsensical, you can understand at least a little why those practitioners of voodoo mathematics think that negative interest rates are a potential policy tool."

The economy is people acting in their own interests, not mathematical models.

Phony job numbers enabled the Fed to raise rates.

"He added that part-time shift work has taken over full-time employment, and this is where much of the jobs gains have shifted to. Schiff alluded to the increase in part-time workers, which saw the biggest gain since September 2012, rising by 319,000 to 6.1 million in November. Ultimately, says Schiff, those who can’t find full-time work are taking part-time jobs."

Some economy.

Gold demand surges.