• Tim Knight from...
    10/06/2015 - 17:03
    As we head into another earnings season, the bulls better pray to whatever pagan gods they worship that company after company magically defy the downturn that the economy is quite obviously entering.

Janet Yellen

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One Trader Says Central Banks Need To Just Shut Up

"Central bank credibility is priceless and they desperately need to reclaim the intellectual high ground. The continuous public back-and-forth through speeches and attempts at expectation management just aren’t working."

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Peter Schiff: The Fed Has Created A "Bad Is Good" Economy

The popular belief that the U.S. economy has been steadily recovering has endured months of disappointing data without losing much of its appeal. But the downright dismal September jobs report that was released last Friday may prove to be the flashing red beacon that even the most skilled apologists can't explain away. But rather than questioning the Fed's credibility in missing another forecast, most economists are lauding it for supposedly seeing weakness that others missed, which allowed it to wisely do nothing in September. But this is simply a continuation of the Fed's long-standing playbook: Talk the economy up through optimistic statements while continually holding off an actual rate hike that the Fed is concerned could undermine an economy teetering on the brink of recession.

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The Window Has Closed On The Fed

The Fed understands that economic cycles do not last forever, and we are closer to the next recession than not. While raising rates would likely accelerate a potential recession and a significant market correction, from the Fed's perspective it might be the 'lesser of two evils. Being caught at the "zero bound" at the onset of a recession leaves few options for the Federal Reserve to stabilize an economic decline... For Janet Yellen, the "window" to lift interest rates appears to have closed.

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The Rate Hike Ship Has Sailed: Goldman Sees "Higher Probability Of Liftoff Not In 2016 But In 2017"

"... standard monetary policy rules might justify a continuation of the current zero-rate policy for much longer, well into 2016 or potentially even beyond. In this context, it is interesting that the reduced market-implied probability of liftoff in 2015 after Friday’s weak employment report mostly translated into a higher probability of liftoff not in 2016 but in 2017!"

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The Unwind Of QE Means The "S&P Should Be Trading At Half Of Its Value", Deutsche Bank Warns

"Since 2013, stocks rallied while disinflationary pressures were reinforced by a strong USD, low commodity prices and a decline in global demand. If pre-2013 coordination between the two is taken as a reference, then based on current stock prices breakevens should trade about 1.5% wider. This means the Fed should be hiking because inflation is above target. Alternatively, given the current level of inflation, S&P should be trading at half of its value."

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Meet Seth Carpenter - Janet Yellen's Choice Of "Fed Leak" Scapegoat

With the "above the law" Federal Reserve coming under increasing pressure to answer a Senate investigation's questions about the 2012 "leak", it appears the proximity of the probe to Janet Yellen, has forced The Fed to 'fess up and throw someone under the bus. Meet Seth Carpenter, a nominee for assistant Treasury secretary for financial markets...

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The Slippery Slope Of Denial

  1. Dollar doesn’t matter, indicates strong economy relative to the world
  2. Dollar matters for oil, but lower oil prices mean stronger consumer
  3. Manufacturing slump doesn’t matter, only temporary
  4. Manufacturing declines are consumer spending, but only a small part
  5. Manufacturing declines are becoming serious, but only from overseas
  6. US consumer demand is strong, except everywhere you look to actually find it.
  7. ...
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What If Expectations Of Our Central Bankers Are Simply Too High?

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”

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Is This The Scariest Chart In America This Week?

Either, a) BLS payrolls data is entirely 'made-up', or b) US jobs are being created in some other regions than the six major Fed surveys. Either way, this chart will strike fear into the heart of Janet Yellen as she 'hopes" for some cover for her rate-hike... before the whole house of cards collapses...

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Stocks, Futures Soar As Europe Joins Japan In Deflation, Surge Driven By Hopes For More Japan, ECB QE

Terrible economic news is wonderful news for markets, all over again, and with the worst S&P500 quarter since 2011 set to close today, some horribly "great" news is just what the window-dressing hedge funds, most of whom are deeply underperforming the broader market (not to mention Dennis Gartman) ordered.

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Low Oil Prices - Why Worry?

Most people believe that low oil prices are good for the United States, since the discretionary income of consumers will rise. There is the added benefit that Peak Oil must be far off in the distance, since “Peak Oilers” talked about high oil prices. Thus, low oil prices are viewed as an all around benefit. In fact, nothing could be further from the truth...

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Why The Fed Can't Stop The Next Market Crash

The Fed was late to prevent the popping of the last two bubbles, and it’s already too late to stop the popping of this one.  The Fed is consistently behind on the timing of when to reintroduce stimulus because its only choice to deal with the bubble it’s created is let it crash, or blow it up even bigger which would result in an even harder landing.  While the Fed ponders when the rate hike comes, our question is: When does QE4 start?
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Bernanke & Yellen Have Engineered A Financial Markets Neutron Star

Absent some entirely magical economic developments, Janet Yellen looks set to be an unlucky Fed chairman. There is a growing risk that the fabric of the financial system may start to unravel during her tenure. Today’s investors are not exactly a lucky generation. Assuming they’ve survived two precipitous declines in stock markets in the course of a decade, they’re now faced with overpriced stocks, overpriced bonds, overpriced everything.

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Goldman Warns VIX Is Priced For Extreme Moves Ahead Of Payrolls

VIX is "searching for a new home" according to Goldman Sachs as the current elevated level of implied risk lies at the high side (around 24) of the current business cycle (~18) and recession-esque volatility (~26) range. Current options prices imply a 7% chance of a 10% crash in the next month and uncertainty is running twice as high ahead of this week's jobs data than on a normal payrolls week...

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Monetary Policy "Psy-Ops" - Why Central Bankers Should Be Seen And Not Heard

The Fed’s policy of forward guidance and radical transparency is not working. It turns out that letting the market peer over its shoulder as it makes monetary policy sausage is, in some ways, worse than the opaque process that existed prior to the arrival of Bernanke and Yellen. It pulls back the curtain and shows the human, error prone side of the Fed. Every time the Fed’s dots move, it is an admission of failure and undermines the very confidence it was trying to inspire.

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