Posts Tagged ‘central bank’

SUPREME COURT RULES FED MUST RELEASE ALL BAILOUT DATA

Courtesy of The Daily Bail

Video – The Fed has 5 days to release all data.

March 21 (Bloomberg) — The Federal Reserve must disclose details of emergency loans it made to banks in 2008, after the U.S. Supreme Court rejected an industry appeal that aimed to shield the records from public view.  The justices today left intact a court order that gives the Fed five days to release the records, sought by Bloomberg.

A huge win for transparency.

Statement from Matthew Winkler, editor in chief of Bloomberg News:

As a financial crisis developed in 2007, "The Federal Reserve forgot that it is the central bank for the people of the United States and not a private academy where decisions of great importance may be withheld from public scrutiny.  The Fed must be accountable to Congress, especially in disclosing what it does with the people’s money."

“The board will fully comply with the court’s decision and is preparing to make the information available,” said David Skidmore, a spokesman for the Fed.

The order marks the first time a court has forced the Fed to reveal the names of banks that borrowed from its oldest lending program, the 98-year-old discount window. The disclosures, together with details of six bailout programs released by the central bank in December under a congressional mandate, would give taxpayers insight into the Fed’s unprecedented $3.5 trillion effort to stem the 2008 financial panic.

“I can’t recall that the Fed was ever sued and forced to release information” in its 98-year history, said Allan H. Meltzer, the author of three books on the U.S central bank and a professor at Carnegie Mellon University in Pittsburgh.

Continue reading at Bloomberg… 


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Philly Fed’s Plosser Goes Off the Reservation, Admits Monetary Policy is Impotent

Courtesy of Jr. Deputy Accountant

That’s not omnipotent, that’s impotent as in the f**kers are shooting blanks and don’t even know it. Well Chuck Plosser knows it but if he keeps this up they’re going to drag him off and sequester him in the bunker they reserve for bad central bankers who can’t keep their mouths shut.

See The Scope and Responsibilities of Monetary Policy from Santiago, Chile yesterday:

Most economists now understand that in the long run, monetary policy determines only the level of prices and not the unemployment rate or other real variables.2 In this sense, it is monetary policy that has ultimate responsibility for the purchasing power of a nation’s fiat currency. Employment depends on many other more important factors, such as demographics, productivity, tax policy, and labor laws. Nevertheless, monetary policy can sometimes temporarily stimulate real economic activity in the short run, albeit with considerable uncertainty as to the timing and magnitude, what economists call the “long and variable lag.” Any boost to the real economy from stimulative monetary policy will eventually fade away as prices rise and the purchasing power of money erodes in response to the policy. Even the temporary benefit can be mitigated, or completely negated, if inflation expectations rise in reaction to the monetary accommodation.

Nonetheless, the notion persists that activist monetary policy can help stabilize the macroeconomy against a wide array of shocks, such as a sharp rise in the price of oil or a sharp drop in the price of housing. In my view, monetary policy’s ability to neutralize the real economic consequences of such shocks is actually quite limited. Successfully implementing such an economic stabilization policy requires predicting the state of the economy more than a year in advance and anticipating the nature, timing, and likely impact of future shocks. The truth is that economists simply do not possess the knowledge to make such forecasts with the degree of precision that would be needed to offset the economic shocks. Attempts to stabilize the economy will, more likely than not, end up providing stimulus when none is needed, or vice versa. It also risks distorting price signals and thus resource allocations, adding to instability. So asking monetary policy to do what it cannot do with aggressive attempts at stabilization can actually increase economic instability rather than reduce it.

I know you’re dying to know what footnote 2 is.…
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QE2 is not only a mistake “it’s criminal” says Vitaliy Katsenelson: Tech Ticker

The Treasury market is rebounding Thursday. Yields have fallen from a six-month high, reached Wednesday, but are still up from where they were earlier in the week. Yields on the 10-year are trading at 3.23% today.

This is not what the Federal Reserve had in mind when the central bank announced the plan to purchase $600 billion in Treasury bonds — a move that was hoped would lower rates and stimulate the U.S. economy.

Of course, there are many critics of the Fed who say the second round of quantitative easing is wrong and even harmful. "The failure of QE2 doesn’t worry me, it’s the success that worries me," says Vitaliy Katsenelson of Investment Management Associates.

"I think it’s criminal," he tells Aaron in the accompanying clip. "They’re forcing people that should not be taking risk to take risk."  The fear is the Fed is repeating its past mistakes — helping to build an asset bubble that will eventually burst with grave consequences.

More here: qe2 is not only a mistake "it’s criminal" says vitaliy katsenelson: Tech Ticker, Yahoo! Finance.


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IS THE ECB ABOUT TO GO NUCLEAR?

IS THE ECB ABOUT TO GO NUCLEAR?

Bikini Bomb

Courtesy of The Pragmatic Capitalist 

The ECB is in a most unenviable position.  As the EMU begins to falter they are confronted with few tools with which to fight this battle.  The market called their bluff yesterday with the Greek bailout and is clearly looking past Greece at Portugal and Spain while daring the ECB to make a move on either country.  The bond “vigilantes” are betting on the fact that the ECB has overplayed their hand with the Greek bailout.  At this point, it looks like the vigilantes are correct.  The ECB put a gun on the table and it turns out to have been nothing more than a water pistol.  Unfortunately for the vigilantes the ECB is not out of tricks.  They have a Hank Paulson like bazooka in their option to buy bonds on the secondary market.  But can they use it?   RBS analysts believe they should not hesitate in acting:

“The ECB should not wait for a renewed deterioration of the periphery before acting. It should regain its leadership in tackling the crisis following a complete communication and coordination failure amongst euro area fiscal authorities around the Greek crisis. Should contagion reappear, there will probably not be enough time to go through a similar backstop facility to that of Greece for the next country. There simply will not be enough time. Better breaking the rule-book than breaking up the euro area!”

Unfortunately, the decision is a bit more complex than the Fed’s decision to buy assets directly from the U.S.banks – what many refer to as “quantitative easing”.  As we’ve previously explained, the Euro is flawed primarily because it is one currency housed under several economies with multiple governments.  They are not truly unified because their economic strategies differ which make their inherent monetary needs different.  Using the same currency for economies as different as Germany and Greece is truly forcing a square peg in a round hole.

Where are the potential roadblocks to QE?   First of all, the program would have to be massive.  Credit Suisse estimates that the cost to bailout Spain, Portgual and Greece could be as high as $600B.  The program would almost certainly have to be as large in order to quell any and all market fears.  But the bigger roadblock is the Maastricht treaty.  Although the ECB could technically…
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IMPLICATIONS OF THE DISCOUNT RATE HIKE

IMPLICATIONS OF THE DISCOUNT RATE HIKE

Courtesy of The Pragmatic Capitalist  

Bloomberg’s Scott Lanman reports on the Federal Reserve Board’s decision to raise the discount rate to banks for direct loans by a quarter point to 0.75 percent. The Fed said the move will encourage financial institutions to rely more on money markets rather than the central bank for short-term liquidity needs.

Source: Bloomberg  


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Duck Tales inflation lesson

Duck Tales inflation lesson

Courtesy of Tim Iacono at The Daily Bail

Even though this is a cartoon, it provides a pretty good explanation of what goes on in a pure fiat money system where trust is placed in the central bank and the government to not abuse the power that they and only they have to create money.
 

Spotted over at The Daily Bail where there seems to be an inexhaustible supply of interesting things to watch on YouTube.

 


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Japan’s New Kamikaze Central Banker and the Nikkei’s Awakening

Japan’s New Kamikaze Central Banker and the Nikkei’s Awakening

Courtesy of Joshua M Brown, The Reformed Broker

"There are a lot of voices in the business world saying that the dollar around Y95 is appropriate in terms of trade…in cooperation with the Bank of Japan, I will make efforts to…bring the exchange rate to appropriate levels."

- New Japanese Finance Minister, January 7th 2010

Ignore Japan’s new central banker at your own risk, because he’s on a mission to blow up the Yen.

This is a developing story and I am hardly an expert on Japanese stocks, but I have to believe that Japanese bankers have taken notice of the weak dollar-led recovery in US asset prices and may want to make moves of their own.

By now, most market players are keenly aware of the dollar’s current (mostly inverse) relationship to stock prices.  They should also consider that the Yen makes up about 13.5% of the US Dollar Index (USDX), nowhere near the weighting of the Euro cross (58%) but more significant than any of the other currencies.

Below is the Nikkei 225 index over the last 40 years:

Nikkei

The Nikkei is currently selling at a 75% discount to its 1989 high (38,000) and the country is desperate to avoid another dip as well as to stop the deflationary cycle and put an end to its two Lost Decades.  The strategy, according to new Finance Minister (and deputy PM) Naoto Kan, is an orchestrated debasing of the Yen.  This will help inflate assets and, more importantly, get exports going via more competitive pricing.

Kan stepped in to the role yesterday when his predecessor stepped away for health reasons; he is the sixth Japanese finance minister since August 2008.

Unlike our disingenuous Treasury officials, who pretend to stand for a strong dollar, Kan has spent his first day on the job publicly stating he’d like a weaker Yen.

Japanese stocks just took out a 15 month high on Kan’s opening remarks as Japanese analysts expressed their bullishness:

"Upward momentum for Japanese stocks is becoming apparent and that will likely continue, due to a recovery in the global economy, the weaker yen and receding worries about equity financing by banks," said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities.

The Nikkei is currently trading at…
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Economists Opposing Fed Audit Have Undisclosed Fed Ties

Ryan Grim is the senior congressional correspondent for the Huffington Post, former staff reporter with Politico.com and Washington City Paper, and author of the book, "This Is Your Country on Drugs." Ryan won the 2007 Alt-Weekly Award for best long-form news-story. – Ilene

Economists Opposing Fed Audit Have Undisclosed Fed Ties

Courtesy of Ryan Grim

Article appears originally in the Huffington Post

As the debate over an audit of the Federal Reserve intensifies in the House, one camp is trotting out eight academics that it calls a "political cross section of prominent economists."

A review of their backgrounds shows they are anything but.

In a letter to the House Financial Services Committee earlier this month, all eight wrote that they support the type of amendment now being introduced by Rep. Mel Watt (D-N.C.). Watt’s approach purports to increase Fed transparency while it actually would tighten restrictions on any audits that could go forward.

The letter was sent around Wednesday by Watt’s staff to members of the committee in advance of a vote scheduled for Thursday.

Watt’s measure is in competition with an amendment cosponsored by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.), which would repeal the restrictions that Watt leaves in place.

But far from a broad cross-section, the "prominent economists" lobbying on behalf of the Watt bill are in fact deeply involved with the Federal Reserve. Seven of the eight are either currently on the Fed’s payroll or have been in the past.

The Fed connections are not outlined in the letter sent around to committee members on Wednesday, but are publicly discernible through a review of their resumes, which are all posted online.

In September, Huffington Post reported that the Federal Reserve has accomplished a soft form of effective control over the field of monetary economics simply by employing — and being the means for career advance — for an overwhelming proportion of the discipline.

Now that the Fed is locked in a legislative battle on the Hill, it can call on those economists to give their "unvarnished" opinions to lawmakers.

The connections that the seven economists lobbying Congress have to the Fed are not incidental and four of them maintain current positions.

Let’s run the traps:

Frederic Mishkin is a former board member, having served from 2006-2008. His career at the Fed…
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The Economic Recovery is an Illusion

The Economic Recovery is an Illusion

The Bank for International Settlements (BIS) Warns of Future Crises


 

Courtesy of Global Research, by Andrew Gavin Marshall

War is Peace, Freedom is Slavery, Ignorance is Strength, and Debt is Recovery

In light of the ever-present and unyieldingly persistent exclamations of ‘an end’ to the recession, a ‘solution’ to the crisis, and a ‘recovery’ of the economy; we must remember that we are being told this by the very same people and institutions which told us, in years past, that there was ‘nothing to worry about,’ that ‘the fundamentals are fine,’ and that there was ‘no danger’ of an economic crisis.
 
Why do we continue to believe the same people that have, in both statements and choices, been nothing but wrong? Who should we believe and turn to for more accurate information and analysis? Perhaps a useful source would be those at the epicenter of the crisis, in the heart of the shadowy world of central banking, at the global banking regulator, and the “most prestigious financial institution in the world,” which accurately predicted the crisis thus far: The Bank for International Settlements (BIS). This would be a good place to start.
 
The economic crisis is anything but over, the “solutions” have been akin to putting a band-aid on an amputated arm. The Bank for International Settlements (BIS), the central bank to the world’s central banks, has warned and continues to warn against such misplaced hopes.
 
What is the Bank for International Settlements (BIS)?
 
The BIS emerged from the Young Committee set up in 1929, which was created to handle the settlements of German reparations payments outlined in the Versailles Treaty of 1919. The Committee was headed by Owen D. Young, President and CEO of General Electric, co-author of the 1924 Dawes Plan, member of the Board of Trustees of the Rockefeller Foundation and was Deputy Chairman of the Federal Reserve Bank of New York. As the main American delegate to the conference on German reparations, he was also accompanied by J.P. Morgan, Jr.[1] What emerged was the Young Plan for German reparations payments.
 
The Plan went into effect in 1930, following the stock market crash. Part of the Plan entailed the creation of an international settlement organization, which was formed in 1930, and


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SOME THOUGHTS ON THE CURRENT STATE OF AFFAIRS

SOME THOUGHTS ON THE CURRENT STATE OF AFFAIRS

Woodrow WilsonCourtesy of The Pragmatic Capitalist

As I ponder the implications of the Fed’s printing press and the potentially disastrous bank run rally I question the actions taken by our Central Bank.  Reader Finn posted some excellent quotes the other day.  Fortunately for the reader these quotes/thoughts are from men far more intelligent than I.  To say that these comments have withstood the test of time is a great understatement:

“We have come to be one of the worst ruled, one of the most completely controlled governments in the civilized world – no longer a government of free opinion, no longer a government by a vole of the majority, but a government by the opinion and duress of a small group of dominant men.

“Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of something. They know that there is a power so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it”
- Woodrow Wilson

“These international bankers and Rockefeller-Standard Oil interests control the majority of newspaper and the columns of these papers to club into submission or drive out of public office officials who refuse to do the bidding of the powerful corrupt cliques which compose the invisible government.”
Abraham Lincohn-Theodore Roosevelt

“I have two great enemies, the Southern Army front of me and the financial institution in the rear. Of the two, the one in my rear is my greatest foe.”
-Abraham Lincoln

“Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves.”
– Andrew


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Market Moving News

 

Financial Markets and Economy

A definitive breakdown of the gloomy state on Wall Street (Business Insider)

While Wall Street bank revenues appeared to bounce back in the first quarter of 2017, with banks posting strong results in fixed income trading in particular, industry-wide revenues were still down on the same period from 2012 to 2015. 

Vietnam's Prime Minister Says He's Confident of 6.7% Growth Goal (Bloomberg)

Vietnamese Prime Minister Nguyen Xuan Phuc said he is confident economic growth this year will meet a goal of 6.7 percent without adding ...



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ValueWalk

Jesse Livermore - 21 Investing Rules That Have Stood The Test Of Time For 77 Years

By The Acquirer's Multiple. Originally published at ValueWalk.

Before the modern day tweeter @Jesse_Livermore, there was a famous investing legend also called Jesse Livermore. The original Livermore was born in 1877 and died in 1940. Livermore was famous for making and losing several multimillion-dollar fortunes and short selling during the stock market crashes in 1907 and 1929. Livermore was an investing genius who unfortunately could not stick to his own rules – Which is why one of his rules – “The human side of every person is the greatest enemy of the average investor or speculator”, is so relevant to every investor.

]]> Get The Full Ray Dalio Series in PDF

Get the entire 10-part series on Ray Dalio in ...



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Zero Hedge

How America Could End Up In An Unexpected War With China

Courtesy of ZeroHedge. View original post here.

Authored by Doug Bandow via The National Interest,

Three decades ago the People’s Republic of China was an economic backwater. Today the PRC sports the world’s second-largest economy. Shanghai most dramatically illustrates the country’s transformation. The city is filled with stylish office buildings, five-star hotels, luxury stores and foreign visitors.

Reflecting their success, the Chinese are increasingly confident as well. If not yet...



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Chart School

Friday Kept Week's Performance Intact - Semiconductors Strong

Courtesy of Declan.

Memorial weekend brought with it holiday style trading on Friday. It was positive finish for bulls who were able to maintain and in some cases, build on, gains from earlier in the week

Best of the action came in the Semiconductor Index which finished with a new closing high. The rally from April brought with it an acceleration in pace, comparable to the latter part of 2016.  Relative performance against the Nasdaq 100 hasn't breached resistance, but it's very close. Semiconductors spent a long time in the doldrums after the 2000 peak, but they are finding their groove now.

...

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Digital Currencies

Visualizing The Expanding Universe Of Cryptocurrencies

Courtesy of Zero Hedge

Bitcoin is the original cryptocurrency, and its meteoric rise has made it a mainstay of conversation for investors, media, and technologists alike.

In fact, as Visual Capitalist's Jeff Desjardins details, the innovation of the blockchain is changing entire markets, while causing ripples with central banks and the financial industry. At time of publication, the bitcoin price now hovers near US$2,200, a massive increase from this time last year.

But the true impact of Bitcoin is actually far more reaching than this – it’s a...



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Market News

Market Moving News

 

Financial Markets and Economy

Hedge Fund Billionaire Paul Singer: If Trump Agenda Fails, a Recession Could Follow (Fortune)

Market watchers who thought the stock market would drop if Donald Trump were elected were burned following his win: markets rose to new highs instead.

U.S. inflation path since 2012 is worrisome, policymaker says (Reuters)

The current level of U.S. prices is noticeably lower than what it would be if the Federal Reserve had delivered on its 2-percent inflation target, St. Louis Federal Reserve President James Bullard said, calling the trend "worrisome."

...



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Members' Corner

Robert Sapolsky: The biology of our best and worst selves

Interesting discussion of what affects our behavior. 

Description: "How can humans be so compassionate and altruistic — and also so brutal and violent? To understand why we do what we do, neuroscientist Robert Sapolsky looks at extreme context, examining actions on timescales from seconds to millions of years before they occurred. In this fascinating talk, he shares his cutting edge research into the biology that drives our worst and best behaviors."

Robert Sapolsky: The biology of our best and worst selves

Filmed April 2017 at TED 2017

 

p.s. Roger (on Facebook) saw this talk and recommends the book ...



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OpTrader

Swing trading portfolio - week of May 22nd, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Biotech

Beyond just promise, CRISPR is delivering in the lab today

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Beyond just promise, CRISPR is delivering in the lab today

Courtesy of Ian HaydonUniversity of Washington

Precision editing DNA allows for some amazing applications. Ian Haydon, CC BY-ND

There’s a revolution happening in biology, and its name is CRISPR.

CRISPR (pronounced “crisper”) is a powerful technique for editing DNA. It has received an enormous amount of attention in the scientific and popular press, largely based on the promise of what this powerful gene e...



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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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Mapping The Market

Bombing - Right or Wrong?

Courtesy of Jean-Luc

I am telling you Angel – makes no sense… BTW:

Republicans Love Bombing, But Only When a Republican Does It

By Kevin Drum, Mother Jones

A few days ago I noted that Republican views of the economy changed dramatically when Donald Trump was elected, but Democratic views stayed pretty stable. Apparently Republicans view the economy through a partisan lens but Democrats don't.

Are there other examples of this? Yes indeed. Jeff Stein points to polling data about air strikes against Syria:

Democr...



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Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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