Federal Reserve

Frontrunning: October 20

  • Stick to tapering and rates pledge, says Boston Fed chief (FT)
  • Turkey to let Iraqi Kurds reinforce Kobani as U.S. drops arms to defenders (Reuters)
  • Obama makes rare campaign trail appearance, some leave early (Reuters)
  • Japan GPIF to Boost Share Allocation to About 25%, Nikkei Says (BBG)... or three months of POMO
  • Japan Stocks Surge on Report GPIF to Boost Local Shares (BBG)
  • China Growth Seen Slowing Sharply Over Decade (WSJ)
  • Russia, Ukraine Edge Closer to Natural-Gas Deal (WSJ)
  • Leveraged Money Spurs Selloff as Record Treasuries Trade (BBG)
  • After clashes, Hong Kong students, government stand their ground before talks (Reuters)

The Chart That Explains Why Fed's Bullard Wants To Restart The QE Flow

Remember when the Fed (and their Liesman-esque lackies) tried to convince the world that it was all about the 'stock' - and not the 'flow' - of Federal Reserve Assets that kept the world afloat on easy monetary policy (despite even Bullard admitting that was not the case after Goldman exposed the ugly truth). Having first explained to the world that it's all about the flow over 2 years ago, it appears that, as every equity asset manager knows deep down (but is loathed to admit for fear of losing AUM), of course "tapering is tightening" - as the following chart shows, equity markets are waking up abruptly to that reality. So no wonder Bullard is now calling for moar QE - he knows it's all there is to fill the gap between economic reality and market fiction.

When Confidence Crumbles

The confidence in the people who are supposedly, as well as supposed to be “in charge” is doing more than just dwindling. It’s crumbling in Humpty Dumpty like fashion. For no matter how they try – it too may never go back together. Once confidence wanes, or is lost, regaining it can be just as monumental of a task than the actual crisis itself.

Why Abenomics Failed: There Was A "Blind Spot From The Outset", Goldman Apologizes

Ever since Abenomics was announced in late 2012, we have explained very clearly that the whole "shock and awe" approach to stimulating the economy by sending inflation into borderline "hyper" mode was doomed to failure. Very serious sellsiders, economists and pundits disagreed and commended Abe on his second attempt at fixing the country by doing more of what has not only failed to work for 30 years, but made the problem worse and worse. Well, nearly two years later, or roughly the usual delay before the rest of the world catches up to this website's "conspiratorial" ramblings, the leader of the very serious economist crew, none other than Goldman Sachs, formally admits that Abenomics was a failure. So what happened with Abenomics, and why did Goldman, initially a fervent supporter and huge fan - and beneficiary because those trillions in fungible BOJ liquidity injections made their way first and foremost into Goldman year end bonuses  - change its tune so dramatically? Here is the answer from Goldman Sachs.

Happy 27th Anniversary Black Monday

"It could never happen again... right?"

"This is a market that has been seriously overvalued for some time," exclaims Paul Tudor Jones, "and what we are seeing today is the piercing of the bubble..." adding that "Wall Street was uniformly unprepared for this kind of a drop."

5 Things To Ponder: "Buy" or "Run"

This past week investors took a blow from a sharp selloff in the financial markets. Now that the correction has occurred, at least to some degree, the question that must be answered is simply: “Is it over?” That is the basis of this weekend’s reading list which is a compilation of reads that debate this point. The bulls remain wildly bullish, believing that this is simply a “dip” in the ongoing “bull market.” The more pessimistic crowd sees the opposite.

GoldCore's picture

We believe that the “Save Our Swiss Gold” campaign has the potential to be a game changer in the gold market - both in terms of the ramifications for the current global monetary system and in terms of higher gold prices. 

There has been a lack of coverage of this important story and there is therefore a lack of awareness about the possible implications for the gold market. Thus, in the weeks prior to the referendum on November 30th, we are going to analyse the referendum, the important context to the referendum and the ramifications of a yes or a no vote.

Deflation Flirts With America

"I see deflation flirting with America." Retail sales equals consumer spending equals velocity of money. And unless the money supply is rising, hardly likely in the taper, less spending is deflation by definition. Forget about PMI and all that kind of data, it’s much simpler than that. Central banks can do all kinds of stuff, but they can’t make us spend our money on things we don’t want or need. Let alone make us borrow to do so. And if we don’t, deflation is an inevitable fact. That doesn’t mean prices for some items won’t go up, but that’s not what counts. It’s about how fast we either spend the money we have – if we have any left – or how much we borrow. And if time is money, then borrowed money is borrowed time. So we really shouldn’t.

Define Irony: Janet Yellen Talks Inequality, Has Some Advice - Start A Business, Get Rich Parents

With no mention of the current turmoil in markets - or suggestion of QE99 - Janet Yellen's speech this morning on "Inequality and Opportunity" in America explains how the poor can get rich. After admitting that widening inequality resumed in the recovery (and "greatly concerns" her), as the stock market rebounded (driven by Fed's free money) and cost-conscious share buying-back companies defer wage growth as the healing of the labor market has been slow; she turns her attention to how the poor can beat the vicious cycle. Rather stunningly, she notes the 4 sources of income opportunity in America: The first two are widely recognized as important sources of opportunity: resources available for children and affordable higher education (so more student debt and servitude). The second two may come as more of a surprise: business ownership and inheritances. As she concludes, "this is how individuals and their families can improve their economic circumstances."

Frontrunning: October 17

  • Obama open to appointing Ebola 'czar', opposes travel ban (Reuters)
  • Schools Close as Nurse’s Ebola Infection Ignites Concern (BBG)
  • How the World's Top Health Body Allowed Ebola to Spiral Out of Control (BBG)
  • European Stocks Rise Amid Growing Pressure for Stimulus (BBG)
  • Putin Threatens EU Gas Squeeze Raising Stakes for Ukraine (BBG)
  • ECB to Start Asset Purchases Within Days, Says Central Banker Coeuré (WSJ)
  • Investors search for signs of end to stock market correction (Reuters)

The Pompous Prognostications Of "Permanently High Plateau" Prophets

The talking heads will be rolled out on CNBC to assure the masses that all is well. The economy is strong. Corporate profits are awesome. The stock market will go higher. Op-eds will be written by Wall Street CEOs telling you it’s the best time to invest. Federal Reserve presidents will give speeches saying there are clear skies ahead. Obama will hold a press conference to tell you how many jobs he’s added and how low the budget deficit has gone. We couldn’t possibly be entering phase two of our Greater Depression after a temporary lull provided by the $8 trillion pumped into the veins of Wall Street by the Fed and Obama. Could we?

What Americans Are Thinking (And Asking) About The Fed

When will the Fed... Raise rates? Stop buying bonds? End quantitative easing? Common questions, those, from Wall Street to Main Street. And – apparently – the online world as well, because they also reflect (literally) what Google autofills when individuals pose inquiries about future monetary policy action in the famously simple Google search box.