Posts Tagged ‘Thomas Hoenig’

Open Dissent at the Fed: Charles Plosser (Philly Fed) Opposes QE2; Thomas Hoenig (Kansas City) attends Tea Party

Open Dissent at the Fed: Charles Plosser (Philly Fed) Opposes QE2; Thomas Hoenig (Kansas City) attends Tea Party

Courtesy of Mish

An open battle exists at the Fed concerning Bernanke’s second round of Quantitative Easing (QE2).

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Hoenig Attends Tea Party

Bloomberg reports Fed Dissenter Hoenig Wages Lonely Campaign Against Easy Credit

Thomas M. Hoenig, dressed in a gray suit, white shirt with French cuffs, and baby-blue tie, faces an edgy crowd of 150 people in a hotel meeting room in suburban Lenexa, Kan. A large “Kansas City Tea Party” banner covers a table at the door. Attendees wear anti-tax stickers on their lapels. This is not an after-dinner speech for which most central bankers would volunteer.

Hoenig smiles at his audience and begins: “This is a support-the-Fed rally, right?”

Dead silence. Then the room erupts in laughter. Disarmed, the Tea Partiers listen politely as Hoenig defends the Federal Reserve as an indispensible institution, even if at the moment, he says, it happens to be heading in the wrong direction.

And, by the way, if it were up to him (though it’s not, really) he would break up the biggest Wall Street banks.

This is Tom Hoenig’s moment, and it’s a strange one. In Washington, he is the burr in Fed Chairman Bernanke’s saddle: the rogue heartland banker who keeps dissenting alone — for the sixth straight time on Sept. 21 — to protest the Fed’s rock- bottom interest-rate policy. Hoenig warns that the Bernanke majority is setting the country up for an as-yet-unknown asset bubble: the next dot-com or subprime craze. He can’t tell yet where the boom-and-bust will materialize, but he can feel it coming, like a Missouri wheat farmer senses in his bones the storm that’s just over the horizon.

In abundant speeches and articles, Hoenig has condemned the political influence of the financial elite. “We’ve had a Treasury Secretary from Goldman Sachs under a Democratic President and a Treasury Secretary from Goldman Sachs under a Republican President. The outcomes were not good,” Hoenig says while being driven to a luncheon talk at an affordable housing conference in Topeka, Kan.

Hoenig harbors powerful misgivings over not dissenting more often and more forcefully during the Greenspan years. “He regrets going along with the votes when Alan Greenspan was chairman to get rates so low and keeping them so low so long,” says his


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FOMC Update: Well I Guess the Fed IS That Stupid After All…

FOMC Update: Well I Guess the Fed IS That Stupid After All…

Courtesy of Jr. Deputy Accountant 

Last night, I guessed that the FOMC wouldn’t have the guts to do much of anything this time around simply because there is not an agreement on just how bad things are out there. Apparently I was wrong:

To help support the economic recovery in a context of price stability, the Committee will keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities. The Committee will continue to roll over the Federal Reserve’s holdings of Treasury securities as they mature.

My guess is that a lone voice shot down a brand new round of Treasury buying with freshly-printed money (sorry, freshly-printed blips) just for kicks and that this was the best they could agree on without starting a shootout at the conference table.

Ahem:

Voting against the policy was Thomas M. Hoenig, who judges that the economy is recovering modestly, as projected. Accordingly, he believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted and limits the Committee’s ability to adjust policy when needed. In addition, given economic and financial conditions, Mr. Hoenig did not believe that keeping constant the size of the Federal Reserve’s holdings of longer-term securities at their current level was required to support a return to the Committee’s policy objectives.

Hahahaha I’m all for dissent as you all know but not sure where this modest recovery is hiding out, must be cowering under the FOMC table where only they can see it.

Anyway, that’s that. 


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Kansas City Fed’s Hoenig: Monetary Policy Should Remain on Hold

Kansas City Fed’s Hoenig: Monetary Policy Should Remain on Hold

Courtesy of Jr. Deputy Accountant 

By "on hold" he means don’t buy any more crap assets, you asshats. I could be wrong on that interpretation but I’m pretty sure I’m up on my Fedspeak these days.

MW:

The Federal Reserve should resist the temptation to take more easing steps despite growing concerns in some quarters of a slowdown, said Thomas Hoenig, the president of the Kansas City Federal Reserve Bank on Wednesday. "I feel that monetary policy should remain on hold," Hoenig said in an interview on the CNBC cable television channel. The Kansas City Fed president said some weak data had not shaken his basic forecast of a modest recovery this year.

In case you don’t already know, Hoenig is the FOMC’s resident cockblocker and has dissented every month for the year. Unlike our buddy Janet Yellen who prefers the yes method. 


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Hoenig Says Fed Should Raise Rate To 1% By End Of Summer

Hoenig Says Fed Should Raise Rate To 1% By End Of Summer

Federal Reserve Bank of Kansas City President Hoenig speaks during the Reuters Financial Regulation Summit in Washington

Courtesy of Zero Hedge 

Reuters reports that the Kansas City hawk says Fed should hike to 1% by the end of the summer, and should sell MBS immediately and certainly by the time the hike at the end of the summer. Not stopping there he says the Fed should promptly proceed to raise rates from 1% to 3% thereafter. Hoenig also noted that the low inflation over the next year would increase as the economic recovery picks up. Of course, a raise in rates, would kill stocks, and promptly push the EURUSD to parity, also killing US exports, which is why we are confident Bernanke will completely ignore this most recent bout of deranged sanity from Hoenig. 

From Reuters 

A top Federal Reserve Official said on Thursday the U.S. central bank should raise rates to 1 percent by the end of the summer to avoid having to raise borrowing costs abruptly as the economic recovery gains momentum.

"Based on the current outlook consensus, it seems reasonable that the economy would be well-positioned to accept this modest increase in the funds rate," Kansas City Federal Reserve Bank President Thomas Hoenig said in remarks prepared for delivery to a business lunch.

Hoenig is a voter on the Fed’s policy-setting panel and has dissented against the Fed’s exceptionally easy money policies at all three meetings this year.


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Hoenig: What about zero?

Hoenig: What about zero?

metallic zero

Courtesy of Edward Harrison at Credit Writedowns 

Below is a link to the speech Thomas Hoenig, president of the Reserve Bank of Kansas City, gave today in Santa Fe, NM.  The critical part of his speech was:

Under this policy course, the FOMC would initiate sometime soon the process of raising the federal funds rate target toward 1 percent. I would view a move to 1 percent as simply a continuation of our strategy to remove measure that were originally implemented in response to the intensification of the financial crisis that erupted in the fall of 2008. In addition, a federal funds rate of 1 percent would still represent highly accommodative policy. From this point, further adjustments of the federal funds rate would depend on how economic and financial conditions develop.

As I have been saying, the pressure to normalize both fiscal and monetary policy will be too great to bear in the U.S. I see zero rates as a distortion that needs to end. See Niels’ piece When the Facts Change about how this creates echo bubbles. On the other hand, fiscal stimulus, especially for job creation, is something I have advocated in the past (but have since moved away from). Irrespective of whether you think all this stimulus is a good thing, we are likely to see less of it.

Source

What about Zero (pdf) – Thomas Hoenig, KC Fed

Pragcap’s docstock (prior post) here.


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St. Louis Fed: US Deflation No Longer A Risk

St. Louis Fed: US Deflation No Longer A Risk

Courtesy of Mish

Crowds Gather For New York's Annual Thanksgiving Day Parade

If you think the Fed is a contrarian indicator, your hair may be standing straight up after you read this: James Bullard a voting member of the Fed says US deflation no longer seen as a risk.

The US has escaped the danger of a Japanese-style deflationary trap, according to James Bullard, a voting member of the Federal Reserve’s key policy-setting committee. Mr Bullard, president of the Federal Reserve Bank of St Louis, told the Financial Times in an interview that his preoccupation throughout 2009 had been deflation, but the risk had “passed”.

Last week’s Fed meeting produced a dissenting vote for the first time in a year when Thomas Hoenig, president of the Kansas City Fed and a rate hawk, argued that financial conditions no longer warranted a policy of holding rates at “exceptionally low levels . . . for an extended period”.

Mr Bullard, who is considered a centrist member of the FOMC, said he was happy to continue with the current guidance, but he did have some sympathy for Mr Hoenig’s argument that “if you come off zero and you move up a little bit, it’s still a very easy policy. You’ve still got a very large balance sheet and you’re still at very low interest rates.”

The broader post-crisis economy was “on track” with its recovery, he said. “It’s not a real strong recovery but that’s what we had predicted anyway. But it will be above-average growth for the first half of 2010 and we’ll probably see some positive jobs growth in the first part of 2010 here.”

When the Fed does come to raise rates it may have to switch from its traditional benchmark of targeting the federal funds rate to targeting a repurchase rate because of the upheaval in the two markets over the last two years.

Be prepared for a massive slide and a resumed deflationary credit crunch. If you need a reason, look no further than Massive Layoffs Coming in NYC, Nevada, California, Colorado, Arizona, Everywhere.

Mike "Mish" Shedlock

 


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Fed President Hoenig: Still Need To Address The Debt Issue

Fed President Hoenig: Still Need To Address The Debt Issue

Courtesy of Tom Lindmark at But Then What

Fed President Hoenig, debt

Throughout the recession one of the more outspoken members of the Fed has been Thomas Hoenig, the President of the Kansas City Fed. Refreshingly, he continues to speak his mind and not shy from the harder issues that most in government prefer not to address.

In a speech that was given to the Kansas Association of Bankers a month ago but just released today, he had this to say:

The U.S. economy appears to be reviving from a nasty recession, but too little has been done to resolve the underlying problem of too much debt, a Federal Reserve official says.

In a speech given a month ago, but released to the public on Saturday, Kansas City Fed President Thomas Hoenig said massive amounts of public and private debt are putting tremendous pressure on the Fed to keep interest rates low, potentially sowing the seeds of inflation or further economic imbalances.

Hoenig, considered one of the Fed’s leading advocates for low-inflation policies, said the Fed has tried too hard to boost growth in the past by keeping rates low. But low rates only encouraged more debt, and fueled an increase in the money supply that has eroded purchasing power.

Sustainable growth can’t be achieved that way, he said.

The federal government has taken on much more debt in an effort to stimulate the economy, he said. Consumer debt remains bloated. And the biggest banks are still overleveraged by about $5 trillion, he said.

The way out of the swamp will be tricky, he said.

“As we become more confident that we are at the bottom of the recession and are moving into recovery, we must become more resolute in systematically reducing our balance sheet and raising interest rates,” Hoenig told the annual meeting of the Kansas Bankers Association on Aug. 6.

Well, it remains to be seen if there is any resolve to move away from a debt fueled economy towards one that is more grounded in fundamentals. It all sounds good, however, there is no magic wand that can be waved over the economy to cause that to happen. The adjustments he calls for require years to put into place and it’s problematic at best as to whether the public has the patience and will to…
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Phil's Favorites

Johnson & Johnson vaccine suspension - what this means for you

 

Johnson & Johnson vaccine suspension – what this means for you

Vials of the Johnson & Johnson vaccine to prevent COVID-19. The use of this particular vaccine has been halted temporarily. Justin Tallis/AFP via Getty Images

Courtesy of William Petri, University of Virginia

The Centers for Disease Control and Prevention and the Food and Drug Administration on April 13, 2021 halted use of the one-dose Johnson & Johnson COVID-19 vaccine that has been given to 6.8 million people in the U.S. The pause is...



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Biotech/COVID-19

Johnson & Johnson vaccine suspension - what this means for you

 

Johnson & Johnson vaccine suspension – what this means for you

Vials of the Johnson & Johnson vaccine to prevent COVID-19. The use of this particular vaccine has been halted temporarily. Justin Tallis/AFP via Getty Images

Courtesy of William Petri, University of Virginia

The Centers for Disease Control and Prevention and the Food and Drug Administration on April 13, 2021 halted use of the one-dose Johnson & Johnson COVID-19 vaccine that has been given to 6.8 million people in the U.S. The pause is...



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ValueWalk

UK's First-Time Buyers See House Prices Climb

By Jacob Wolinsky. Originally published at ValueWalk.

First-time buyers paying as much as £73k more to get on the ladder since the market reopened

Q1 2021 hedge fund letters, conferences and more

The Climbing Cost Of Houses For First Time Buyers

Research by the new build snagging and defect management experts, ...



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Zero Hedge

Trading Bonds In Venezuela? Bring A Gunman And Cash

Courtesy of ZeroHedge View original post here.

The Venezuelan bond market - described by Bloomberg as one of the 'tiniest and almost certainly the most primitive' in the world - is also one of the most dangerous.

Based in Caracas where Nicolas Maduro's socialist government is 'ever so slowly freeing up the battered economy' for capitalistic endeavors, the US dollar has become the defacto currency. Yet, there's no electronic method to electronically transfer USD from one bank to another - which mean...



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Digital Currencies

Coinbase Sets Reference Price At $250, Well Below Last Private Market Trade

Courtesy of ZeroHedge

Ahead of tomorrow's much-anticipated direct listing of massive crypto-exchange Coinbase, Nasdaq has just announced the company's so-called Reference Price at $250.

On April 14, 2021, the Class A common stock of Coinbase Global, Inc. is expected to list on Nasdaq through a Direct Listing using the ticker “COIN”.

Because this security has not previously traded on any listing market and has no prior day's closing price, Regulation SHO Rule 201 will not apply to the security until its second day of trading on Nasdaq.

As a Direct Listing, COIN will be in a regulatory halt until ...



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Kimble Charting Solutions

Semiconductor Red Hot Performance Tests 20-Year Breakout Level

Courtesy of Chris Kimble

Will the “Red Hot” semiconductor index cool off or get even hotter due to the shortage of chips?

This chart looks at the Semiconductor Index on a monthly basis over the past quarter-century. No doubt the trend is up as it has created a series of higher lows and higher highs since 2009.

Fibonacci extension levels were applied to the 1996 lows and the 2000 highs. Currently, the index is testing the 261% extension level, while at the top of the rising channel as momentum is at the highest level since the 2000 highs.

The rare chip shortage coul...



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Chart School

Gold Gann Angle Update

Courtesy of Read the Ticker

The Biden Yellen team have made their play, and it is not US dollar friendly.

Janet Yellen speech named "International Priorities — Remarks to The Chicago Council on Global Affairs" (here) can be summed to (via Luke Gromen) :


The US is accelerating a move away from "subjugating the US middle and working class to support the USD", to "subjugating the USD to support the US middle and working classes".



Well the above is true, but as we all know large US deficits and the trend of the US dollar are joined at the hip, and that trend is down '...

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Politics

For autocrats like Vladimir Putin, ruthless repression is often a winning way to stay in power

 

For autocrats like Vladimir Putin, ruthless repression is often a winning way to stay in power

Russian police officers beat people protesting the jailing of opposition leader Alexei Navalny, Jan. 23, 2021 in Moscow. Mikhail Svetlov/Getty Images)

Courtesy of Shelley Inglis, University of Dayton

Russian dissident Alexei Navalny, sick with a cough and ...



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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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