Testimony

Fed Congressional Testimony Preview: Janet Yellen's Shot At Redemption

Google "The Fed" and the search engine will offer to autofill your query with "surrenders," reflecting market concerns that The Fed has abandoned its recently more upbeat take on the domestic economy. During this week's semiannual monetary policy report to Congress, the success/failure of this appearance will hinge on the tone she chooses to strike and the conviction investors hear in her testimony and in Q&A. With so much chatter about the Fed “Losing credibility” with markets, this will be an important chance for Chair Yellen to set the record straight.

CIA Director Warns Islamic State Militants Are Coming, Smuggled As Refugees

CIA Director John Brennan spoke before the Senate Intelligence Committee on Thursday where he is expected to warn US lawmakers that Islamic State militants are training and preparing to deploy operatives for further attacks on the West and will rely more on guerrilla-style tactics to compensate for their territorial losses. Most importantly, he said IS probably is working to smuggle them into countries, perhaps among refugee flows or through legitimate means of travel.

The Vanity Of Central Bankers And The Common Sense Rule

Yellen's recent indignation at (and manipulation of the inputs to) The Taylor Rule, "gives the appearance that one is changing the rule or the inputs to the rule to get an answer. I do not think that reason would go over well in Congressional testimony," exclaimed the rule's creator. And yet, so many of Taylor’s peers in the economic community continue to feed policymakers’ penchant for contorting the world into a fantastical one that only exists in those leaders’ dreams. Is it any wonder so many of today’s leaders in central banking sport God complexes?

Orlando Killer Worked For Company Transporting Illegal Immigrants Inside US; Was Interviewed By FBI 3 Times

In a surprising discovery, the Palm Beach Post first reported that according to state records, Orlando shooter Omar Mateen was employed by the US subsidiary of G4S plc, the world's largest security company by revenue. The problem is that according to Judicial Watch this is the same G4S who has been contracted by DHS to drive Other Than Mexican illegal immigrants across the Mexican border to Phoenix where they are then released without proper processing or issuing court appearance documents.

Frontrunning: June 9

  • European Bond Yields Hit Record Lows as Stocks Tumble (WSJ)
  • Oil prices soften on profit taking after hitting 2016 highs (Reuters)
  • Wooing Sanders supporters will be tough task for Clinton (Reuters)
  • Clinton ally Warren weighs potential VP role, sees hurdles (Reuters)
  • Rise of the Machines Fueled by Higher Asia Manufacturing Wages (WSJ)

S&P Nears All Time High, Global Stocks Rally As Dovish Yellen Unleashes Animal Spirits

Stock whisperer Yellen said all the right things yesterday, when she sounded more optimistic than pessimistic on the economy but while the economy is "strong" it is most likely not strong enough to weather a rate hike in the immediate future. As a result, the S&P 500 climbed toward a record on Monday (and continued rising overnight) after Yellen said she expects to raise interest rates only gradually and held off from specifying any timeframe, a shift from her May 27 stance that a move was probable “in the coming months.” This was interpreted that both a June and July rate hike are now off the table, with September odds rising modestly.

DHS Quietly Moving, Releasing Vanloads Of Illegal Aliens Away From Border

The Department of Homeland Security (DHS) is quietly transporting illegal immigrants from the Mexican border to Phoenix and releasing them without proper processing or issuing court appearance documents, Border Patrol sources tell Judicial Watch. “They’re telling us to put them on a bus and let them go,” said one law enforcement official in Arizona. “Just move those bodies across the country.”

Global Markets Flat, Coiled Ahead Of Today's Risk Events: OPEC And The ECB

There are just two drivers setting the pace for today's risk mood: the OPEC meeting in Vienna which started a few hours ago, and the ECB's announcement as well as Mario Draghi's press statement due out just one hour from now. Both are expected to not reveal any major surprises, with OPEC almost certainly unable to implement a production freeze while the ECB is expected to remain on hold and provide some more details on its corporate bond buying program, although there is some modest risk of upside surprise in either case.

The Death Of The Virtuous Cycle

Current economic policy is not simply flawed in its logic and application but actually destructive. As should be evident to all by now, these experimental monetary and fiscal policies provide short term economic relief but only serve to exaggerate the problems they claim to solve. The elegant Virtuous Cycle that propelled western economies to prosperity has been quietly dismantled and replaced with an unproductive imitation. This new, Un-Virtuous Cycle euthanizes discipline and prudence in exchange for the immediate gratification of debt-fueled consumption.

The Fascinating Story Of How The Petrodollar Was Born And Lived In Secrecy For Over 40 Years

For decades, the story of Saudi Arabia recycling US petrodollars, i.e., funding the US deficit by buying US Treasuries with proceeds of its crude oil sales (mostly to the US), while the US sweetened the deal by providing the Saudis with military equipment and supplies, remained entirely in the conspiracy realm, with no confirmation or statement from the US Treasury department. Now, that particular "theory" becomes the latest fact, thanks to a fascinating story by Bloomberg which lays out the history of how the petrodollar was born...