Monetary Policy

Tyler Durden's picture

With One Week Left Until The Fed's Rate Hike, Nobody Knows If The Fed Can Actually Do It





We are less than one week away from a historic monetary experiment in two parts: first, attempt the Sisyphean task of pushing up the rate of interest on over $2.5 trillion in excess liquidity, and second, to assure the market that it has correctly priced in the overnight evaporation of up to $800 billion (or more) in liquidity from asset prices. If one or both of these fail to deliver, than the embarrassing disappointment that marked the ECB's December announcement and its dramatic impact on asset prices and FX levels, will be a walk in the park compared to "disappointment" that the Fed will unleash once the market realizes that while in theory the Fed can and is ready to hike, it simply can't do so in practice.

 
Tyler Durden's picture

How America's Middle Class Lost The War In One Simple Animation





"The middle class is disappearing,” says Alison Fuller, a 25-year-old university graduate working for a medical start-up in Smyrna, Georgia, who sees herself voting for Mr Trump."

 
Tyler Durden's picture

America Crosses The Tipping Point: The Middle Class Is Now A Minority





Americans have long lived in a nation made up primarily of middle-class families, neither rich nor poor, but comfortable enough, notes NPR's Marilyn Geewax, but this year - for the first time in US history, that changed. A new analysis of government data shows that as of 2015, middle-income households have become the minority, extending a multi-decade decline that confirms the hollowing out of society as 49% of all Americans now live in a home that receives money from the government each month. Sadly, the trends that are destroying the middle class in America just continue to accelerate.

 
Tyler Durden's picture

The Screaming Fundamentals For Owning Gold





Gold is one of the few investments that every investor should have in their portfolio. We are now at the dangerous end-game period of a very bold but very reckless & disappointing experiment with the world's fiat (unbacked) currencies. If this experiment fails -- and we observe it's in the process of failing -- gold will provide one of the best forms of wealth insurance. But like all insurance products, it only works if you buy it before you need to rely on it.

 
Tyler Durden's picture

Draghi's Currency War Ceasefire Faces Test As Sweden, Switzerland, Norway Take Aim





“I don’t think we’ve seen the last of this trend. When I trained as an economist, negative rates weren’t in the textbooks. But that’s the world we live in now, and it hasn’t stopped turning."

 
Tyler Durden's picture

Ever Greater Distortions Hint At Rising Crash Probabilities





Government interference by both central banks and regulators (the latter are desperately fighting the “last crisis”, bolting the barn door long after the horse has escaped, thereby putting into place the preconditions for the next crisis) has created an ever more fragile situation in both the global economy and the financial markets. As the below charts and data show, price distortions and dislocations have been moving from one market segment to the next and they keep growing, which indicates to us that there is considerable danger that a really big dislocation will eventually happen.

 
Tyler Durden's picture

Canada Just Warned That Negative Interest Rates Are Coming





Moments ago, the Bank of Canada's chief finally said what we had been patiently waiting for over the past several months: admission that Europe's experiment with negative rates is about to cross the Atlantic.

 
globalintelhub's picture

The American Forex Delusion





Hitler said often that the bigger the lie, the easier it would be [for the masses] to believe.  This is no where more true than Forex.

 
RANSquawk Video's picture

RANsquawk Preview: Focus will be on the BoE's vote split alongside any comments on the UK inflation





 

PREVIEW: BoE December Rate Decision & Minutes Release 1200GMT/0600CST

• All surveyed analysts expect the Bank of England to keep monetary policy unchanged, with the bank rate at 0.5% and the Asset Purchase Facility at GBP 375bln

• Headline UK CPI printed at -0.1% for October, still well below the BoE’s mandated 2% target

 
Tyler Durden's picture

Beware The "Massive Stop Loss" - JPM's Head Quant Warns This Unexpected Downside Catalyst Looms Next Week





"There are $1.1 trillion of S&P 500 options expiring on Friday morning. $670Bn of these are puts, of which $215Bn are struck relatively close below the market level, between 1900 and 2050. At the time of the Fed announcement, these put options will essentially look like a massive stop loss order under the market. This important event falls at a peculiar time—less than 48 hours before the largest option expiry in many years. "

 
Tyler Durden's picture

The Era Of The Rock-Star Central Banker Is Far From Over





Paul Volcker and Alan Greenspan were the Elvis and Beatles of this movement – the first to see widespread fame for their efforts. Then came Ben Bernanke, perhaps the Jimi Hendrix or Led Zeppelin of his day, taking existing tools and pushing them in new, previously unconsidered, directions.  Now, we have Janet Yellen and Mario Draghi, whose legacies are as yet undefined. They may end up like the next generation of rock stars from the 1970s – something like Bruce Springsteen, with a deep focus on common people in his music. Or, they could be the Bee Gees, who focused simply on commercial success. Only time will tell.

 
GoldCore's picture

BIS Warns of ‘Uneasy Calm’ in Markets Before Possible Debt Storm





Less favourable financial market conditions, combined with a weaker macroeconomic outlook and increased sensitivity to US interest rates, heighten the risk of negative spillovers to EMEs once US rates do start to rise in the United States”

 
Phoenix Capital Research's picture

Is the Fed About to Light the Fuse on a $9 Trillion Debt Bomb?





The US Federal Reserve (Fed) and European Central Bank (ECB) have created a very dangerous situation. And it is one that few if any investors are assessing.

 
 
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