federal reserve

Notable Public Posts

“Let’s Be Honest” –Andrew Huszar

“The real issue is that the Fed has expanded its tool kit so dramatically…”  –Andrew Huszar

In line with our theme of outlandish and immoral (in my opinion) Fed policy a former Fed official calls QE a backdoor bailout of Wall Street, which anyone with two functioning brain cells knows to be the case.  The Andrew Huszar Op/Ed (Wall Street Journal) Confessions of a Quantitative Easer is I suppose old news, but it illustrates what we have been hammering on for so long now; that Fed policy is serving to pump the stock market and pump up the wallets of asset owners.

QE gets about 10 times the notoriety of ZIRP, but I’ll still maintain that it is this evil tool in the Fed’s ‘tool kit’ that is the main and continuing blight on the system as it not only rewards asset owners and speculators, but punishes those least able to speculate due to limited funds.

dow.tbill

Please review this chart again and behold the rigged market.  Anyone arguing that the bull market in US stocks is normal is being intellectually dishonest.  Yet like agent Mulder I want to believe in the healthy bull story*, but I have to believe the data that has drawn the lines on the chart above.

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May 28, 2014
Notable Public Posts

3P’s Supporting Massive Market Speculation

Policy, Profits and Propping… that is without a doubt the underlying fundamental support for a massive and growing phase of market speculation that becomes more dangerous with every week that it lurches forward.  Once again, the chart that proves this in no uncertain terms:

ppp
‘Policy, Profits & Propping‘ courtesy of SlopeCharts

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November 8, 2013
Notable Public Posts

Raghuram Rajan’s Sneaking Out the Door (Raises Interest Rates)

The economist who predicted the financial crisis just sounded another alarm—it would be wise to listen this time

A good article (thanks Tom) about a good man trying to get out ahead of a rising interest rate world; India’s head of the RBI, who is raising interest rates while the US Fed keeps things stable for the rest of the world to start deleveraging.  Is this really what is in play, a world setting up to clean up its debts and inflationary excesses?

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September 24, 2013
Notable Public Posts

Send in the Clowns

Last week the Fed treated us to a whipsaw as market perceptions apparently were not in line with the FOMC policy statement, which was basically a punt.  Then the very next day the Fed’s James Bullard  jawboned the media about a possible October Federal Reserve tapering.  Hence, a letter writer was left with images of a 3 ring circus heading into the weekend.  From the opening segment of the September 22 edition of Notes From the Rabbit Hole:

Last week’s opening title was ‘Get Ready for a Climax to the ‘Taper’ Hype’ and boy did it ever climax.  The FOMC rolled over and the market over reacted.  Everybody it seems (bears, bulls, inflationists, deflationists, gold bugs; everybody) was punished at one point or another.  James Bullard even had the nerve to get in front of a microphone and exercise his jawbone about a possible October ‘taper’ and the anti-climax was on.

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September 23, 2013
Notable Public Posts

The Fed’s Great Adventure in Inflation

In the current policy and media stoked market environment, anything is possible.  It’s  the wonderful, magical world of hands-on policy making.  5 years after the financial crisis, but still not enjoying a ramping economy like the good old (and long gone) days of the last great secular bull market (RIP 2000)?  Just sit back, relax and let the man in charge control the image.

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September 20, 2013
NFTRH Interim Updates

NFTRH Update, Precious Metals & ‘Inflation Trade’ After Fed Roll Over

Here is what the US Fed did to the currency it is supposedly a steward of yesterday.  The USD plunged below an important support level.  If this breakdown holds below 80.50, it measures to the mid-70’s.  Enter an ‘inflation trade’, in which we’d look to fan out from the precious metals and include other commodity and global stock items.

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September 19, 2013
NFTRH Interim Updates / Notable Public Posts

NFTRH Update 9.17.13, Precious Metals – Looking Past FOMC

The world expects the FOMC to update its expectations regarding a tapering of Treasury bond asset purchases tomorrow.  The world thinks that a tapering of these purchases would be bad for gold.

I think a decrease in T bond purchases would be anything from neutral to a potential positive (see post coming later today on the matter).  Regardless, it is time to be looking out beyond FOMC with regard to the precious metals, a most sensitive sector to monetary policy.

So here is a check list of what we want to see in order to press the bull stance.

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September 17, 2013
Notable Public Posts

Rates of Interest

[edit]  Formatting errors have been corrected from an original version posted earlier. The following is excerpted from this week's Notes From the Rabbit Hole, NFTRH 247: As the 10-year to…

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July 15, 2013