Zoltan Pozsar "doomsday" report predicting that the Fed is about to lose control over short-term interest rates due to a reserve shortage, resulting in a repo market crisis, surging bond yields and a stock market crash, managed to do something few others have achieved: it caused a full-blown Fed panic.
The result was not only the earlier announcement that the NY Fed would inject over $500 billion in liquidity over the next month to avoid said repo crisis, which as we calculated would blow out the Fed's above $4.5 trillion to a new all time high...
... but the Fed also remembered that in order to restore confidence that it knows what it is doing to prevent a year-end funding crisis, it has to actually staff the New York Fed's Market Desk, also known as the Plunge Protection Team, which as a reminder, lost its two top traders in May when both the head of the PPT, Simon Potter, and the head of the Financial Services Group, Richard Dzina, unexpectedly quit as a result of a conflict with the new, and utterly clueless, head of the NY Fed, John Williams.
And so, just minutes after the NY Fed's announcement of its gargantuan, $500BN liquidity injection, the NY Fed - in scrambling to prove to markets that it is taking the year-end panic seriously - also announced a new senior leadership for its Markets and Financial Services Groups, as follows:
- Daleep Singh has been named Executive Vice President and Head of the Markets Group;
- Lorie K. Logan has been named Executive Vice President and Manager of the System Open Market Account (SOMA)
- Christopher D. Armstrong has been named Executive Vice President and Head of the Financial Services Group.
“After an extensive and thorough search, we selected three great leaders to head these mission-critical functions. While quite distinct in their experience and backgrounds, the three share several essential attributes. In addition to unmatched expertise and knowledge, they are visionary and collaborative leaders who have track records of inspiring, supporting and developing outstanding teams,” said John C. Williams, President and Chief Executive Officer of the New York Fed.
“I have had the pleasure of working with Lorie and Chris for some time, and am deeply impressed with their professionalism and leadership. Chris stepped in as interim head of the group and quickly gained the respect of his colleagues within the New York Fed and across the System. Lorie, in her role as SOMA Manager pro tem, was steadfast during the recent period of volatility in the repo market, helping the FOMC develop and execute a highly effective plan of action. Daleep has a clear dedication to public service, a record of success, and proven leadership skills, which make him the ideal candidate for this role. I look forward to working with all three in their new roles,” Mr. Williams concluded.
So who are these new masters of the centrally-planned markets? Here are their bios:
As Head of the Markets Group, Mr. Singh will join the New York Fed in February 2020 and be responsible for the group’s entire portfolio, with a focus on bringing together policy, strategy, analysis and operational effectiveness. As a member of the Executive Committee, he will also play a key role in developing and implementing the New York Fed’s strategic direction and priorities. Mr. Singh is currently Senior Partner and Chief U.S. Economist at SPX Capital, a global investment firm. Previously, he worked at the U.S. Department of the Treasury from 2011 to 2017, serving as Acting Assistant Secretary for Financial Markets and Deputy Assistant Secretary for International Affairs, helping to shape the Department's crisis response to Ukraine, Russia, Greece, and Puerto Rico. Mr. Singh also directed the Treasury’s Markets Room, which provided real-time and thematic analysis for senior Administration officials.
Lorie K. Logan
As SOMA Manager, effective January 1, 2020, Ms. Logan will be responsible for implementing monetary policy in accordance with the directives of the Federal Open Market Committee (FOMC). She will continue to draw on her deep knowledge of capital markets, market operations, and related policy to provide expert analysis and advice to the FOMC. Ms. Logan has more than twenty years of experience at the New York Fed, serving since 2014 as the Deputy SOMA Manager. In that role, she helped to develop the Federal Reserve’s policy normalization tools, including the establishment of the overnight reverse repo facility, and the long-run monetary policy implementation framework. Ms. Logan played a prominent role in the development and implementation of the Federal Reserve’s crisis-era policies to mitigate systemic risks to the financial system.
Christopher D. Armstrong
As Head of the Financial Services Group, effective January 1, 2020, Mr. Armstrong will be responsible for the suite of products offered by the Wholesale Product Office, which manages the Fedwire Funds Service, the Fedwire Securities Service, and the National Settlement Service on behalf of the Federal Reserve System. He will also be responsible for the New York Fed’s Cash Operations, and serve on the Bank’s Executive Committee. Mr. Armstrong joined the New York Fed more than ten years ago as part of the Cash and Custody services team within the Financial Services Group, drawing on broad industry experience and an education in mechanical engineering to help transform financial services in the Bank. Prior to joining the Bank, Mr. Armstrong worked at Raytheon Integrated Defense Systems, where he held several management roles.
And now traders can be comforted that between new heads of the market formerly known as "free", and the $500 billion in liquidity injected over the next 30 days, not even one red candle will be allowed well into 2020...