Posts Tagged ‘Brian Sack’

AMAZING WAY TO RUN AN ECONOMY….

AMAZING WAY TO RUN AN ECONOMY….

the federal reserveCourtesy of The Pragmatic Capitalist 

No wonder America is losing more and more of the wealth pie to Asia.  This quote from David Rosenberg pretty much speaks for itself:

“Brian Sack at the New York Fed stressed the need for the Fed’s actions to bolster asset inflation as to boost the wealth effect on spending (QE “adds to household wealth by keeping asset prices higher than they otherwise would be…”).  We just can’t seem to wean ourselves off this asset-dependent economy — and how directed by a Fed official that the attempt here is to bring asset values above their intrinsic value.  Amazing way to run an economy.  Whatever happened to skills, productivity, education, job creation, innovation?  Or thrift — when did that virtue become a dirty six-letter word?”

I’m thoroughly disgusted with the response of government over the last 24 months….

Source: Gluskin Sheff

Pic credit: Jesse’s Café Américain


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DAVID ROSENBERG ATTACKS THE FED’S INTENTIONAL PONZI APPROACH

DAVID ROSENBERG ATTACKS THE FED’S INTENTIONAL PONZI APPROACH

Courtesy of The Pragmatic Capitalist 

This weekend’s shocking admittal that the Fed is hoping QE will keep asset prices “higher than they otherwise would be” did not surprise David Rosenberg one bit.  In this morning’s note he said:

Brian Sack, a senior official at the New York Fed, had this to say about the powers of quantitative easing in a speech he just delivered:

“Some observers have argued that balance sheet changes, even if they influence longer-term interest rates, will not affect the economy because the transmission mechanism is broken. This point is overstated in my view. It is true that certain aspects of the transmission mechanism are clogged because of the credit constraints facing some households and businesses, and it is true that monetary policy cannot directly target those parties that are the most constrained. Nevertheless, balance sheet policy can still lower longer-term borrowing costs for many households and businesses, and it adds to household wealth by keeping asset prices higher than they otherwise would be. It seems highly unlikely that the economy is completely insensitive to borrowing costs and wealth, or to other changes in broad financial conditions.  ”

I just love that one comment to the effect that QE “adds to household wealth by keeping asset prices higher than they otherwise would be.”  When will these guys ever learn that maybe, just maybe, these Fed policies aimed at targeting asset prices at levels above their intrinsic values is probably not in the best interests of the nation? As our friend Marc Faber likes to say, the “Bernanke put” is cut from the same cloth as the fabled “Greenspan put” — only the strike price is different.

Imagine running a policy aimed at getting people to spend money based on an artificial level of asset values — what an admission.  Then again, this is what the Fed has been all about since the LTCM bailout of 1998.  We’re still not convinced after reading this sermon that this next “pull-another-rabbit-out-of-the-hat” experiment is going to end with very much success.  There is something to be said about paying for our mistakes and to have the Fed try to rekindle an asset-based economy that has only ended up in generating a series of burst bubbles over the last 12 years, not to mention encourage a lifestyle of living beyond our means,


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The NY Fed's Trading Desk Head Laments The End Of Stupid Leverage And Wants His Derivatives Back (Or Why We Are Stuck With ZIRP For A Long, Long Time)

The NY Fed’s Trading Desk Head Laments The End Of Stupid Leverage And Wants His Derivatives Back (Or Why We Are Stuck With ZIRP For A Long, Long Time)

http://media.photobucket.com/image/leverage%20elaine%20supkis/ElaineSupkis/WTF.jpgCourtesy of Tyler Durden

In a video conference before the ACI 2010 World Congress in Sydney, Australia, the head of the FRBNY’s trading desk, aka, the busiest daytrader over the past year, Brian Sack, demonstrated once again that Fed members are either completely clueless about ongoing market dynamics or are so good at octuple re-reverse psychology, that they make the squid pale in shame and squirt ink in envy.

Before we get into the meat of Sacks’ lament, it bears refreshing on Paul McCulley’s letter from yesterday. While Paul may have been merely pushing his book in an attempt to convince readers that rates will (or should) stay mega low for years and years (and Greenspan will be more than happy to admit that low rates have nothing, nothing, to do with asset bubbles), he did have one great observation, namely that the explosion in various forms of shadow credit: derivatives, securitizations, etc., were all dictated by the need to leverage a relatively flat yield curve.

When the 2s10s is in the 40-50bps range, financial institutions needed to find a way to leverage the long-dated end of the curve: if the Fed would not cooperate in bringing the near-end lower, well, demand for, and application of financial innovation, resulted in the multi-trillion shadow banking system. This extremely simple observartion is of remarkable consequence: securitization was not predicated on extra supply of cheap credit but arose out of bank demand for synthetic steepness: instead of capitalizing on the unlevered curve steepness, banks decided to go the volume route, making credit a way of life for everyone, thus allowing them to go all in on a massively-leveraged curve trade. The key implication is that in the current Fed-dominated environment, where the 2s10s is at record levels of almost 300 bps, banks have no need for shadow banking! Another way of saying this is that what financial institutions needed a multi trillion shadow system for, when the curve was flat, they can achieve now with the curve being as steep as it is and without shadow banking. The big banks simply do not have a need for shadow banking: ergo the demand pull side. And no…
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Zero Hedge

America's Housing Future Remains Murky At Best - Part 1

Courtesy of ZeroHedge View original post here.

Authored by Bruce Wilds via Advancing Time blog,

The housing market in America is not one but many markets that generally share a few common threads. In America, the government, coupled with a slew of builder and Realtor associations control the housing narrative. Housing prices in Canada have been on fire for years now we are seeing this type of buying frenzy spreading to America.  This has allowed some buyers to ignore the reality that soaring lumb...



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Phil's Favorites

A Giant Consumptive Force

 

A Giant Consumptive Force

Courtesy of John Mauldin

The SIC was in full swing this week. I am finishing this on Friday morning, a few hours before the start of the last official day and then a “Plus Day” on Tuesday. My mind is swimming with new connections and revelations.

While the live events are mostly over now, your SIC pass gives you full video, downloadable audio, slide presentations and (soon) written transcripts of every session. They are all still quite fresh and relevant, so don’t feel like you missed the opportunity. (Note: I’ve never heard a greater discussion of inflation and/or deflation from so many perspectives. We will go into that in detail in the coming weeks.) ...



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Politics

As the Palestinian minority takes to the streets, Israel is having its own Black Lives Matter moment

 

As the Palestinian minority takes to the streets, Israel is having its own Black Lives Matter moment

Israeli-arabs gesture and wave Palestinian flags at Israelis in a Jewish community building, during renewed riots in the city of Lod on May 11. Oren Ziv/picture alliance via Getty Images

Courtesy of James L. Gelvin, University of California, Los Angeles

The images and reports coming from Israel, Jerusale...



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Biotech/COVID-19

Herd immunity appears unlikely for COVID-19, but CDC says vaccinated people can ditch masks in most settings

 

Herd immunity appears unlikely for COVID-19, but CDC says vaccinated people can ditch masks in most settings

A woman walks by a sign in New York City amid the coronavirus pandemic on March 30, 2021. Noam Galai/Getty Images

Courtesy of William Petri, University of Virginia

When COVID-19 first began spreading, public health and medical experts began talking about the need for the U.S. to reach herd immunity to stop the coronavirus from spreading. Experts have estimated that between 60% and 90% of people in the U.S. w...



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Digital Currencies

Dogecoin Soars After Musk Tweets "Working With Doge Developers To Improve System Efficiency"

Courtesy of ZeroHedge

Just when you thought things couldn't get any more surreal after the past 24 hours, moments ago Elon Musk, who last night rejected bitcoin because its mining is "bad for the environment" as it consumes a lot of electricity (just wait until Elon discovers how all those rare earth metals that are in every electric car are mined, or what those electric cars run on), moments ago Musk poked the hornets nest again, and shortly after tweeting that 'it's high time there was a carbon tax'...

It is high time there was a carbon tax!

— Elon Musk (@elonmusk) May 13, 2021

...

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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Sunday, 22 November 2020, 05:47:49 PM

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Comment: Bitcoin ambitions ...



Date Found: Sunday, 22 November 2020, 05:48:34 PM

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Comment: PMI juiced back up ...



Date Found: Sunday, 22 November 2020, 05:49:42 PM
...

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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Kimble Charting Solutions

Will Historic Selloff In Treasury Bonds Turn Into Opportunity?

Courtesy of Chris Kimble

Long-dated treasury bonds have been crushed over the past year, sending ETFs like TLT (20+ Year US Treasury Bond ETF) spiraling over 20%.

Improving economy? Inflation concerns? Perhaps a combination of both… interest rates have risen sharply and thus bond prices have fallen in historic fashion.

Today’s chart looks at $TLT over the past 20 years. As you can see, the recent decline has truly been historic. $TLT’s price has swung from historically overbought highs to oversold lows.

At present, the long-dated bond ETF ($TLT) is trading 7.8% below its 200-...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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Promotions

Phil's Stock World's Weekly Webinar - March 10, 2021

Don't miss our latest weekly webinar! 

Join us at PSW for LIVE Webinars every Wednesday afternoon at 1:00 PM EST.

Phil's Stock World's Weekly Webinar – March 10, 2021

 

Major Topics:

00:00:01 - EIA Petroleum Status Report
00:04:42 - Crude Oil WTI
00:12:52 - COVID-19 Update
00:22:08 - Bonds and Borrowed Funds | S&P 500
00:45:28 - COVID-19 Vaccination
00:48:32 - Trading Techniques
00:50:34 - PBR
00:50:43 - LYG
00:50:48 - More Trading Techniques
00:52:59 - Chinese Hacks Microsoft's E...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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