Notes From Underground | Where 2+2=5 is also a beautiful thing

Time 2020-11-14 18:04:09

Web Name: Notes From Underground | Where 2+2=5 is also a beautiful thing

WebSite: http://yragharris.com

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On Wednesday, I had a long discussion over Zoom with the eminent Gary Shilling, courtesy of FRA. There is much we agree on but as my readers are aware, my view on a coming deflationary spiral is measured as a low probability outcome of the current financial and economic situation. If deflation were to take hold it would be deemed a major failure of FEDERAL RESERVE policy aided and abetted by 535 fools on Capitol Hill. Before getting to the PODCAST, I offer up this advice on this week of major macro-economic importance (and NO, NOT THE U.S. ELECTION). There were three central bank meetings this week: The Reserve Bank of Australia; the Bank of England; and the Fed. Read the rest of this entry On Friday, there s a new dose of unemployment data. While these blog posts have been infrequent, my view remains the same: The Federal Open Market Committee may be keen on promoting inflation while returning to the pre-Covid employment levels, but no amount of robust jobs growth will move the FEDERAL RESERVE off its current policy of lower for longer.In regards to the year-end data, I want to know: If unemployment is below 9% while the annualized inflation levels were to rise to 6%, would the FED raise rates? If your answer is no then you agree that the data outcomes are benign. At this juncture much more concerned with the next phase of fiscal stimulus and the DOLLAR. President Donald Trump has had his issues with his own hand-picked Federal Reserve Chairman Jerome Powell. At one point there were even discussions about Trump attempting to demote the chairman if not firing him for failure to keep interest rates low enough to finance the massive budget deficits. The Covid pandemic, coupled with 2019 s Powell pivot, seems to have satisfied the President s lust for negative REAL YIELDS as Powell is no longer the object of Twitter derision. Read the rest of this entry As we get back up to speed, here is another FRA podcast, with Barry Ritholz, David Rosenberg and myself. Enjoy the discussion as we prepare for the the coming volatility of the election season. Pandemics, recessions, elections, oh my.Click the link to listen to the podcast. Read the rest of this entry We are back. This is the first blog post after a 10-week break. It has been a nice hiatus from writing as we took some time to reflect and respect the sanctity of motherhood.I m linking to an FRA PODCAST hosted by Richard Bonugli taped on Thursday featuring Barry Ritholtz, David Rosenberg and myself. This will be a solid starting point for NOTES FROM UNDERGROUND as it picks up where we left off on June 12:  LONG EUROS, LONG GOLD and looking for some vigor in the commodity markets. Read the rest of this entry There were no surprises from the FEDERAL RESERVE on Wednesday. There was no discussion of yield curve control but there was plenty of confirmation about the FED s concern surrounding the damage done to the lowest on the employment ladder. Read the rest of this entry This quote from Shakespeare explains the position that the Jerome Powell-led Federal Reserve has created for itself. The U.S. central bank has been captured by its massive monetary stimulus in addition to its willingness of aiding and abetting the Mnuchin Treasury by purchasing of hundreds of billions of Treasuries. The FED has maintained that its dual mandate provides the theoretical and practical approach to keeping interest rates lower for longer. Read the rest of this entry The MISS by the economic analysts of Friday s unemployment data has rendered all data as tertiary relative to the policy that has been enacted to counteract the malicious effects of the Covid-19 shutdown. Global stock markets have rallied as if normalization has occurred and UNEMPLOYMENT has returned to its historic lows of 3.5%. Read the rest of this entry Enter your email address to subscribe to this blog and receive notifications of new posts by email. Join 7,356 other followers Email Address:

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