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Goldman's Cohn Slams Fed's Fisher: A Soaring Dollar Is Not Positive For US Jobs, Companies

Tyler Durden's picture




 

Who knows what to believe? Aside, that is, from the fact that the world appears to believe that it's better to have a weaker currency than stronger currency.. apart, that is, from Larry Kudlow and The Fed's Richard Fisher...

 

As Reuters reports,

Sharp gains in the U.S. dollar are good for the U.S. labor market, a top Federal Reserve official said on Friday, downplaying a crescendo of complaints from top executives over the dent to their profits.

 

"CEOs that have international operations complain about it," Dallas Fed President Richard Fisher told Reuters in an interview. "I hear from every one of them - it offsets their powerful earnings here domestically."

 

Fisher takes those complaints with a grain of salt.

 

"It brings to my mind the vision of Edward Munch’s painting 'The Scream'," he said, adding, "It's not the end of the world."

 

Fisher, who plans to retire from his post in March, holds views that are often far from those at the Fed's core. Still, the former hedge-fund manager says he feels his views are heard at the policy-setting table.

 

"The more income and investment flows we get, the better it is for our companies big and small to go out and hire American workers," Fisher said. "And it does help on the consumption side, if, for example, oil is denominated in dollars, it just helps us have cheaper goods."

 

While a stronger dollar does hurt net exports, he said, it puts less of a damper on U.S. job creation than it may have in the past because the U.S. economy has become less export driven.

*  *  *

And then there's Goldman's President Gary Cohn...

"the effects of the soaring dollar are just starting
to be felt; for US exports, manufacturing, and jobs - it is not going to
be positive."

 

*  *  *

Once again The Fed remains in a world of its own. Or perhaps this explains it...

"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"

 

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Wed, 03/11/2015 - 14:09 | 5878411 KnuckleDragger-X
KnuckleDragger-X's picture

Hmmmm... Fisher has nothing to lose at this point, GS on the other hand.......

Wed, 03/11/2015 - 14:12 | 5878429 Deathrips
Deathrips's picture

Another Fischer...is this one jewish too?

Honest question...We all know about Stanley Fischer.

 

Dont we....

 

RIPS

Wed, 03/11/2015 - 14:17 | 5878444 maskone909
maskone909's picture

more than likely.  but hey its just a co-winky-dink, right?  every media outlet, hollywood, fed reserve, government agencies between the letter a-z... im sure there is a rich assortment of diversity amongs those ranks.  wait, what?

edit

little ot but have you noticed that almost every stand-up comic on netflix does a pro gun control bit?  is that a prerequisite now for a career in showbusiness?  damn i am prob on some list now.  ive said to much

Wed, 03/11/2015 - 14:20 | 5878460 balanced
balanced's picture

Haha, "US manufacturing."

 

Edit: Changed LOL to Haha, as I remembered where I was.

Wed, 03/11/2015 - 14:32 | 5878530 youngman
youngman's picture

Its JAJAJA in Spanish

Wed, 03/11/2015 - 14:39 | 5878562 maskone909
maskone909's picture

a la chinga

Wed, 03/11/2015 - 15:48 | 5878853 Stuck on Zero
Stuck on Zero's picture

Let me get this.  You lose your export job because of the strong dollar but your unemployment check goes a lot further when you buy Chinese goods.  That's cool.

Wed, 03/11/2015 - 17:15 | 5879146 Save_America1st
Save_America1st's picture

he'll get what he wants soon enough. 

Ol Yellen will eventually have to roll out some kind of QE4 once it's her turn to do so as directed by her uber bankster overlords.

That will be the next major round of devaluation in the currency wars...

my guess is at that point it will be the final round of the currency war and the precursor to the next massive world war.

Wed, 03/11/2015 - 16:10 | 5878932 ajax
ajax's picture

 

 

Fuck Cohn, I didn't see him complaining about FATCA.

Wed, 03/11/2015 - 16:17 | 5878970 ThirteenthFloor
ThirteenthFloor's picture

Goldman Sachs - "I want my super QE, money for nothing and chicks for free".

Wed, 03/11/2015 - 14:09 | 5878414 AccreditedEYE
AccreditedEYE's picture

What he really means is that it's not good for his bonus.

Wed, 03/11/2015 - 15:16 | 5878716 mkkby
mkkby's picture

Kind of ironic that these filthy rats are now talking about the export economy, 10 years after they sucked all the blood out of it.

We import much more than we export.  So I'd rather have a strong dollar and pay less for... well, just about everyting.  Isn't it pretty much ZH dogma that anything goldman says is to believe the opposite?

Wed, 03/11/2015 - 17:16 | 5879156 Omen IV
Omen IV's picture

so who will you make money off of?

as the USA exports are priced out by a big number and the jobs with it and the discretionary cash flow of those working jobs for domestic consumption is reduced to zero - who do you sell to beyond the high end government workers and ?

Wed, 03/11/2015 - 17:22 | 5879174 Omen IV
Omen IV's picture

so who will you make money off of?

as the USA exports are priced out by a big number and the jobs with it and the discretionary cash flow of those working jobs for domestic consumption is reduced to zero - who do you sell to beyond the high end government workers and ?

Wed, 03/11/2015 - 17:52 | 5879297 NihilistZero
NihilistZero's picture

So we're back to promoting trickle down economics???

Better to have capital continue to rake in bonuses as opposed to a stronger dollar foe Joe 6Pac???

How's about we let the appreciating dollar increase consumption at the retail level which can directly stimulate local economies nation wide.  Seems a good trade for some lowered CEO bonuses and a little less pay for those in the manufacturing sector.  Who will of course be able to buy more with less of those newly mighty dollars.

Wed, 03/11/2015 - 20:10 | 5879739 mkkby
mkkby's picture

Thank you.

Wed, 03/11/2015 - 14:10 | 5878417 Stoploss
Stoploss's picture

Richard Fisher, please report to the middle of the nearset train tracks and wait for additional instructions...

Richard Fisher, please report to the middle of the nearset train tracks and wait for additional instructions...

Richard Fisher, please report to the middle of the nearset train tracks and wait for additional instructions...

Wed, 03/11/2015 - 15:02 | 5878631 ersatz007
ersatz007's picture

Nearest train tracks OR nail gun demonstration kiosk

Wed, 03/11/2015 - 14:28 | 5878419 angel_of_joy
angel_of_joy's picture

We do expect these freaks to save the world, while they can't figure out what time it is with a watch in their hand. This is all very bullish, obviously...

Wed, 03/11/2015 - 14:13 | 5878436 Fun Facts
Fun Facts's picture

The goal of the global central banker cabal has been for 300 years to transfer the wealth of the world and control of it, to themselves.

When viewed in this context of their actual objectives, they are doing an outstanding job.

Wed, 03/11/2015 - 14:19 | 5878440 Raoul_Luke
Raoul_Luke's picture

Huh?  You mean you CAN devalue your way to prosperity?  Duh!  He's right, unless you are an oligarch.  Yes, it hurts the large expert oriented manufacturers, but it helps in the creation of new small businesses and their expansions domestically.  So, yes, that IS good for the US labor market, unless you are one of the dwindling employees of the large manufacturers.  This currency war and race to the bottom on NIRP has to stop somewhere and, as usual, it's the good old USA who has to save the day by setting the example.  Bring it on...

Wed, 03/11/2015 - 14:14 | 5878442 Bastiat
Bastiat's picture

 

He forgot to mention that it is defaltionary on the consumption side as the strong USD buys cheaper imports. 

But what the hell, we don't need an economy any more than Madura does.  We dictate reality.  Feedback is for pussies.  Make it so.

Wed, 03/11/2015 - 14:16 | 5878450 rejected
rejected's picture

Take something already worthless and devalue it?

Wed, 03/11/2015 - 14:16 | 5878451 Last of the Mid...
Last of the Middle Class's picture

There you go with the propaganda, bankers telling the fed where the dollar should be. Great move, not good for jobs or busisness, lets race to the bottom, print moar and well you little people can pick up the slack called inflation in basic goods and services.

Wed, 03/11/2015 - 14:16 | 5878453 WTFUD
WTFUD's picture

Good Cop Bad Cop, As if Goldman & Fed are not reach around buddies.

Wed, 03/11/2015 - 14:17 | 5878456 SirBarksAlot
SirBarksAlot's picture

Let the blame game begin!

Wed, 03/11/2015 - 14:18 | 5878459 BlueHen1990
BlueHen1990's picture

Is anyone even surprised by Cohn's reply? Goldman and the major investment banks have a vested interest in a weakening dollar, their lending institutions for Pete's sake (granted they don't even do that much conventional lending anymore).

Heck, if anything, since our fiscal policy and regulatory environment is so hostile to nominal growth that the potential of a strengthening dollar/falling prices might help us keep our REAL growth above water.

I don't think any American consumers will be thinking to themselves, "Gee...I really need to buy that new pair of pants, but screw it let me wait 3 months until the price falls further and just go pantsless"

Wed, 03/11/2015 - 14:21 | 5878472 slightlyskeptical
slightlyskeptical's picture

Only solution at this point is direct stimulus to the consumer. Anyone making less than $100,000 per year gets sent $2500, over that you get $1,000. Throw the cost onto the Fed balance Sheet. Should he enough to weaken the dollar a bit and allow the fed to start normalizing rates without hurting the economy.

Wed, 03/11/2015 - 14:50 | 5878605 ILLILLILLI
ILLILLILLI's picture

Sorry...sheeple don't get fed, only slaughtered.

Wed, 03/11/2015 - 14:56 | 5878622 Comte d'herblay
Comte d'herblay's picture

U are one of the few who at least make a nodding reference to the trillions of DIRECT STIMULUS inserted like dozens of rambunctious gerbils up the asses of the abysmally failed Jews of Wall Street. 

IF they can get it without even asking, it should be incumbent on the government to give it to those most in need of it, Us.

IF several tens of trillions didn't do much to stimulate the economy, there's not a reason in the world why another measly 3 trillion will do much to fire the coals of inflation.

A national jobs program to have every one who wants a good paying job in the repair and maintenance of infrastructure, would get the next politicians who are for it guaranteed life time tenure.

 

 

Wed, 03/11/2015 - 14:22 | 5878474 QQQBall
QQQBall's picture

Looking to buy a place overseas. Strong USD is muy bien

Wed, 03/11/2015 - 14:22 | 5878480 Kaiser Sousa
Kaiser Sousa's picture

PPT working real hard to prop up the phony Dow and S&Piss...

so fucking obvious.

Wed, 03/11/2015 - 14:23 | 5878485 TalkToLind
TalkToLind's picture

It's only soaring against other pieces of fiat paper.  Anything else you need to buy on a regular basis is still increasing in price!

Wed, 03/11/2015 - 14:34 | 5878540 Bastiat
Bastiat's picture

. . . and against gold

Wed, 03/11/2015 - 14:23 | 5878488 Spungo
Spungo's picture

Of course weak currency is good for jobs. It's easier to "hire" people when you don't need to pay them. We would have tons of jobs if we were only paid 1 bowl of rice per day.

Wed, 03/11/2015 - 14:32 | 5878526 vincenze
vincenze's picture

You can't buy much with your Expensive dollars.

A small 1 bedroom apartment for $2,000, a year at a university for $20,000-50,000, medicine for $500-1,000 a month... A fat girl who refuses to date you unless you buy a $500,000 house.

Wed, 03/11/2015 - 14:26 | 5878496 Hohum
Hohum's picture

If the stock market can rise with a weakening dollar and a strengthening dollar, why can't exports rise whether said dollar is strong or weak? ;)

Wed, 03/11/2015 - 14:35 | 5878544 teslaberry
teslaberry's picture

smoke and mirrors.

goldman overleverages greece , a decade later draghi goldmanite is getting ebc to print to infinity.

goldman is 'opnining' to give the muppets something to chew on. all this is meaningless.

the real action as always is in the boardroom.

Wed, 03/11/2015 - 14:45 | 5878580 22winmag
22winmag's picture

No shit.

 

Remember the debut of the new $100 note? The gold symbology?

 

No wonder dollars are scarce. They didn't want to even release the few percent of money represented by the new Benjamin.

Tue, 03/24/2015 - 18:47 | 5878671 RMolineaux
RMolineaux's picture

It would be interesting to know the real and candid reasons why Richard Fisher of the Dallas Fed has decided to retire.  Looking at a situation in which Vice Chairman Stanley FisCher is being groomed to be the next Chairman, he no doubt sees little hope that his maverick concern for the well being of rank and file Americans will get any hearing at the Fed conference table.  Fischer, recently graduated from the central bank of Israel, can be relied upon to continue the current Wall Street program, as indicated in his recent address.  It is ironic that former treasury secretary Robert Rubin always spoke in favor of a strong dollar.  I wonder if he still feels that way, or if he was just following the party line in his former position.

Wed, 03/11/2015 - 15:09 | 5878689 Chuck Knoblauch
Chuck Knoblauch's picture

It's time to give the Fed back to the WASP's.

Kick out Hymie!

Wed, 03/11/2015 - 16:33 | 5879015 Squid Viscous
Squid Viscous's picture

wait the guy from Get Smart works for the Fed?? what about 86, was she a yid too?

Wed, 03/11/2015 - 15:10 | 5878690 delivered
delivered's picture

Honestly, its difficult to believe either of these parties as GS has no real desire other than to protect their interest and as most of us know, the Fed is full of a bunch of fuck-tards that can somehow only speak a smidge or a smidge and a half of the truth when they've long since left the building (think Greenspan these days and his warnings on inflation, the USD, and gold). But to chime in on their comments, I would probably be more inclinded to side with GS for the following reasons:

- Fisher makes a note that capital will flow into the US in search of yields, strenght, etc. True but his point about capital flowing into all shapes and sizes of businesses is very weak. I would be amazed if any of this capital flow really finds its way into productive uses at the small/medium business level. Anyone that works in this space understands that the Feds QE programs really only inflated assets and had basically no impact/effect on Main Street. Just take a look at the birth-death rates for small businesses since 2008 and note the constant negative environment (as well as real wage levels which have trended negative for a number of years now). I suspect that the capital flow will be consumed by the fat pigs in government and the speculative nature of Wall Street. 

- No question that US exports will be hurt by the rising dollar as numerous products will become more expensive in countries that are either experencing slowing economic growth (i.e., China) or in a contraction (most of Europe). More importantly, US earnings generated abroad and translated into USDs will get hammered. I suspect some major players in the tech industry are going have an unpleasant year with international operations given the rate the USD is appreciating. Of course, the US operations could increase pricing in the regional currency to help with earnings and support the goal of all CBs around the world in their effort to inflate their way out of this mess but raising prices in struggling economies (and risk losing market share) is not an ideal situation.

- These types of violent/extreme moves in FX rates are not healthy and most likely are creating some severe pain with various parties across the globe. Any party that has to unwind old USD carry-trades, repay debt denominated in USDs, etc. are probably having some digestive problems right now. EMs are an example as if they have to convert more "other" reserves into USDs to service debt denominated in USDs, this is going to further amplify a bad situation. Of course they can drive rates much higher to defend their currency but this will hammer their local economies. 

- Fisher also fails to mention that while for Americans traveling abroad deals are a plenty, for foreigners traveling to the US, it is now becoming much more expensive (15 to 20% more). Of course since only the 1% can afford to travel abroad, I'm not sure what real effect this will have as for 99% of Americans, the only travel plans they'll have is down to the local Jiffy Mart to pickup a 12 pack and a carton of cigs. But looking at this from a bigger picture, foreign goods & services should fall in price making US based goods & services more expensive (thus directing purchases towards foreign sources). Don't think for a moment that the service segment of the economy is immune from this trend as you need to look no further than to outsourced IT support. So I guess that facelift down in Mexico just got cheaper.

- As with most of Fed-tards, I don't think they truly understand the forces building on the deflationary front. Simply put, there's just too much debt and not enough income to service the debt. And how does one fix this, well in the short run you lower the cost of debt (check, interest rates on SD around the world are at historical lows), you extend the repayment lenght of the debt (check, Greece deal a perfect example as well as 50 years bonds now being issued I believe in Spain), you use secondary sources to repay the debt (check, QE in the US, ECB, and Japan is direct money printing to buy debt as well as bail-ins), and finally you basically default the debt away (tried in 2008 with MBSs but the market didn't like this, but soon to be available in Greece and others shortly thereafter). So now their brilliant plan is to actually push negative interest rates to the market which is just another form of bail-ins as people are actually paying a tax back to the governments on their debt. Hell, even the Twilight Zone couldn't have ever imagined a more bizzare and surreal situation that what we have right now. 

I could go on with various points, pro and con, but my conclusion is very simple. First, there is absolutely no free lunch. Period. For every benefit of a stronger USD, there's a negative effect as well. Second, the Fed is absolutely clueless when it comes to real world business, practices, and strategies. They are a bunch of inbred accedemic types that have no understanding of how the markets operate. Third and finally, these types of violent moves in FX markets and bond yields (watch % changes in Europe and Japan) are unhealthy and will create more damage to the markets than benefits. Why, the answer is simple. Without some degree of predictibility and ability to proactively manage outcomes, businesses/investors will be more interested in capital preservation than investing capital to drive returns. The instability and uncertainties created by the world's CBs is front and center, one of the primary causes of this environment and until it is removed, the misallocation and mal-investment of capital will be the driving theme and ultimately lead to a deflationary collapse as once everyone has piled into the USD as the last safe-haven asset, the imbalances and pressure in the global financial system will become so great that the final implosion will occur. 

BTW, if you picked up on the quotes from We're the Millers, kudos to you.

Wed, 03/11/2015 - 15:14 | 5878708 The Darwin Mode
The Darwin Mode's picture

Cohn's retiring in March, eh? Next stop: Treasury Secretary.

Wed, 03/11/2015 - 16:11 | 5878934 Squid Viscous
Squid Viscous's picture

or gas chamber, they still have those somewhere?

Wed, 03/11/2015 - 15:25 | 5878758 doctorZH
doctorZH's picture

These people have two different jobs.  Cohn has to make more money for his investors; he wants to protect the stock market.  Fischer has to try to correct all the mistakes made by Greenspan and Bernanke and (what's her name) Yellen.  Fischer understands the strong Dollar will create the destruction (creative destruction) of the global debt bubble that must be accomplished before the global economy will ever be able to grow again.

 

Cohn wants to avoid pain.  Fischer knows that pain is needed; too much pleasure (spending money one does not have) is corrected by pain, which lead to a smarter way of living.

 

Am I giving Fisher too much credit?  I hope not.  Strong Dollar, yes.  Eject the Inflationists from power.

Wed, 03/11/2015 - 15:29 | 5878777 all-priced-in
all-priced-in's picture

How has lowering the value of the Yen work out for Japan?

 

IMHO you want a stable currency - floating against other currencies - so some move up and down is OK - but small moves -

 

Big moves up or down are not good.

 

 

 

 

 

 

Wed, 03/11/2015 - 15:30 | 5878782 venturen
venturen's picture

And neither of the money crooks ever made a useful thing in their lives! Crooks both of them!

Wed, 03/11/2015 - 15:32 | 5878792 gcjohns1971
gcjohns1971's picture

"Who knows what to believe?"

 

You do.

Or the more common alternative...your owner knows what to believe, and tells you something entirely different for the purpose of controlling you.

Are we honestly having a credibility discussion with Goldman and the Fed as subjects??????

If they told me the sky was blue, I'd walk outside to check.

Wed, 03/11/2015 - 15:45 | 5878804 realWhiteNight123129
realWhiteNight123129's picture

Printing money is responsible for trade deficiit.

Proof:

Argentina, United States, Uk.... overpinting money and internal prices rising terms of trade deteriorating and as a result trade deficit and weakening currency.

 

On the other hand:

Germany in the 70s, China since 2003.  Tigther currency policy, better terms of trade, increasing trade surplus and strengthening currency.

All countries with large inflation had large trade deficit as a result (deterioration of terms of trade)

All countries controlling inflation and terms of trade end up with trade surplus and appreciating currency.

Gary Cohn is a fucking banker cunt.

INternal price inflation due to excessively lose money monetary policy hurts terms of trade and hurts currency BUT it bails out the banks. The manufacturing has hurt relentlessly because of excessive money for the last 30 yeras. Dollar is cut so much aginst Swiss France, yet manufacturing is doing much better there than in the US. In the 1865-1913 , the US had tight money, improving terms of trade, strengthening manufacturing and trade surplus all the way up with a stronger dollar as result. Germany was in that position in the 70s and 80s, How about the UK poudn in the 70s, how about the UK manufacturing in teh same period.

Fucking criminal Gary Cohn you deserve to be hung, bastard traitor.

The money printing of 2009 was upposed to do what? Close the trade deficit. It never ever does in history, it only avoids bankruptcy and kicks in the butt of bankers.

Fucking Cunt!

This phenomenon is document since Henry Thornton in 1801. Printing money ==> very shrot term good for exports. But then deterioration of terms of trade because of inflation ==> trade deficit ==> lower currency. 

 

Long term a currency follows trade as a result of terms of trade (which are affected by overprinting, or tight money). Short term it is capital flows. Right now we have a short squeeze on the USD. Even the worst crappy stock can have a short squeeze, same with the USD>

 

Wed, 03/25/2015 - 17:51 | 5927049 RMolineaux
RMolineaux's picture

You are a little backwards on the effect of internal inflation on the terms of trade.  For most countries, internal inflation causes a deterioration of the exchange rate, thus giving a boost to exports - improving the terms of trade.

Wed, 03/11/2015 - 16:02 | 5878896 Fijiaaron
Fijiaaron's picture

Easy solution:  If a strong currency is bad for the economy, print more money!

Wed, 03/11/2015 - 17:14 | 5879144 Downtoolong
Downtoolong's picture

I think that'w what Goldman means, they just don't want to come right out and say it like that. You know, it might look like they're trying to influence the Fed a bit too much. Better to speak in bankster code that the sheeple and muppets can't understand.

Wed, 03/11/2015 - 16:03 | 5878901 Omega_Man
Omega_Man's picture

it's all good, US doesn't export anything, all the jobs have been offshored. Just keep printing dollas, and when someone doesn't accept them... well then you bomb them.... been working good for a while now.

Wed, 03/11/2015 - 17:48 | 5879280 pndr4495
pndr4495's picture

Hmmmmmm , reminds me of something that J.P. Morgan himself is rumored to have said , " a man has 2 reasons for what he says/does a good reason and the REAL reason." The banking industry cannot bail the boat fast enough apparently.

Wed, 03/11/2015 - 17:57 | 5879309 Chad_the_short_...
Chad_the_short_seller's picture

I don't give a fuck if it's good for US companies, it's good for me so fuck off!!!

Wed, 03/11/2015 - 18:37 | 5879437 DrNybble
DrNybble's picture

The ONLY reason the dollar is advancing against the Euro is that the US has managed to keep the trillions of newly created money out of circulation and, therefor, keeps its "velocity" very low.
Let's hope all that money never actually enters the economy.  Massive inflation and the fall the the dollar would be the result.
How long can the Fed hold that off?  Maybe until a republican president is in the WH?

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