Euro-denominated emerging market sovereign issuance will soar to its highest levels in 10 years on the back of the European Central Bank's quantitative easing programme, as issuers outside the eurozone seek to take advantage of falling euro yields, according to bank analysts.
It's fact-checking time once again. Having questioned the credibility of Dallas Fed's Richard Fisher previously, we thought this morning's comments by St.Louis Fed's Jim Bullard were worth investigating:
*DOLLAR EFFECTS ARE MARGINAL ON U.S. ECONOMY, SHOULDN'T INHIBIT GROWTH, FED'S BULLARD SAYS
Which just seems odd given the rest of the world's competitive devaluation efforts to 'improve' their economies. What we found will not surprise... but do not show this chart to Bullard.
Janet Yellen is very alarmed that some members of Congress want to conduct a comprehensive audit of the Federal Reserve for the first time since it was created. During testimony this week, she made “central bank independence” sound like it was the holy grail. Even though every other government function is debated politically in this country, Janet Yellen insists that what the Federal Reserve does is “too important” to be influenced by the American people. Does any other government agency ever dare to make that claim? If the Fed is doing everything correctly, why should Yellen be alarmed? What does she have to hide?
The Dallas Fed manufacturing outlook plunged in January - despite Richard Fisher's claims that "everything is awesome" and low oil prices are a net positive for Texas - so it is perhaps not surprising that - with a backdrop of rig count collapses and oil price lows - February's data (delivered late) plunged-er to -11.2 (against expectations of -4 - 3rd miss in a row - well below every economist's estimates). This is the lowest since April 2013. This is the fastest 3-month decline since April 2013.
Dallas Fed President Richard Fisher proclaimed that he and some esteemed colleagues in the business community believe the collapse in oil prices is a net positive for Texas, while "we will lose about 150,000 [oil-based] jobs, but we will pick them up elsewhere since we are a consumer society," and low oil prices is good for everyone... so far he is absolutely wrong!
The monetary politburo has every reason to fear Rand Paul’s demand for a “policy audit” of the Fed. An honest one would show that its so-called “independence” has been monumentally abused in a manner which is deeply threatening to both political democracy and capitalist prosperity. Needless to say, we can’t have that audit soon enough. In short, what the nation really needs is not an “independent” Fed, but one that is shackled to a narrow and market-driven liquidity function. The rest of its current remit is nothing more than the self-serving aggrandizement of the apparatchiks who run it; and who have now managed to turn the nation’s vital money and capital markets into dangerous, unstable casinos, and the nations savers into indentured servants of a bloated and wasteful banking system.
It would appear the powers that be are getting nervous. Yesterday, Fed Governor Jerome Powell (and Fisher and Plosser) stepped up the central bank’s push against what he termed congressional efforts to extend political influence over monetary policy, calling them "misguided" and "in violent conflict with the facts." Today we have Senator Elizabeth Warren trying to sound supportive of transparency but proclaiming that she opposes Rand Paul's "Audit The Fed" Bill because it promotes "congressional meddling in the Fed’s monetary policy decisions," and has "dangerous implications for financial stability and the health of the global economy."
I do not think it is an exaggeration to say that we gold advocates have gone all in. We have made one argument for gold...
Despite the authorities' best efforts to keep everything orderly, we know how this global Game of Geopolitical Tetris ends: "Players lose a typical game of Tetris when they can no longer keep up with the increasing speed, and the Tetriminos stack up to the top of the playing field. This is commonly referred to as topping out."
"I’m tired of being outraged!"
As Janet Yellen prepares to meet with President Obama this morning for the first time, it appears The Dallas Fed's Richard Fisher has planted a rather uncomfortable tape bomb for her to explain:
FISHER: QE3 WAS A GIFT TO THE RICH
So right before the Midterm elections, a week after Janet Yellen discussed inequality, she is summoned to meet with The 'fair' President to explain how her policy is keeping Obama's dream alive?
The question that remains to be answered is whether the economy and the financial markets are strong enough to stand on their own this time? The last two times that QE has ended the economy slid towards negative growth and the markets suffered rather severe correction...
FOMC voting-member Richard Fisher is among the sanest voices in the Eccles Building asylum and he is once again sounding alarms that all is not well in US financial markets:
*FISHER SAYS FED HAS 'LEVITATED' MARKETS, SEES SIGNS OF EXCESS IN FINANCIAL MARKETS
Furthermore, Fisher notes The Fed can't force companies to hire, and would like to see rate hikes as early as Spring 2015.
Recent comments from FOMC participants on the forward guidance and the appropriate timing of the first hike of the fed funds rate suggest, Goldman warns, a greater clustering of FOMC participants' views around a mid-2015 'liftoff' in rates. Similarly, private sector forecasts for the first hike are becoming more centered on mid-2015 rather than August to September.
The FOMC has used experimental tools for so long to keep the accelerator pressed that it fears what happens when the car stops. Therefore, the FOMC believes they have little choice other than to keep the car going forward, which works until it doesn’t. The risk/reward tradeoff continues to skew unfavorably. The farther markets move into the right-tail side of the distribution curve, the deeper they will eventually more into the left-tail. Vrooom...Crash.
What if Janet Yellen is wrong?