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Tag Archives: federal reserve

The People’s Money (Part 1)

By J. D. Alt, author of The Architect Who Couldn’t Sing, available at Amazon.com or iBooks. Originally published at www.realprogressivesusa.com “Reserves”—that esoteric term in money-talk that postures to explain everything but explains nothing at all—have been much in the news of late. The Wall Street Journaleven tried, recently, to explain what they are! They didn’t do such a great job. That’s unfortunate because, properly explained and understood, Reserves hold a big key to the political...

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In The Fed We TRUST – Part 2: What is Money?

Part one of this article can be found HERE. President Trump recently nominated Judy Shelton to fill an open seat on the Federal Reserve Board. She was recently quoted by the Washington Post as follows: “(I) would lower rates as fast, as efficiently, and as expeditiously as possible.” From a political perspective there is no doubting that Shelton is conservative. Janet Yellen, a Ph.D. economist from Brooklyn, New York, appointed by President Barack Obama, was the most liberal Fed...

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Same Three Drivers in the Week Ahead but Changing Tones

Three themes have dominated the investment climate:  US-China tensions, Brexit, and the policy response to the disinflationary forces.  None have been resolved, which contributes to the uncertainty for businesses, households, and investors.  However, the negativity that has prevailed is receding a little.  It begins with the most substantive progress on Brexit in months, but also entails a possible new tariff truce between the US and China. Indeed, we irreverently suggested that the...

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Hope is Trying to Supplant Pessimism Today

Overview: The 1.5% drop in the S&P 500 and the deterioration of US-China relations and the prospects of a no-deal Brexit failed did not carry over much into today's activity. Asia Pacific equities were mostly a little lower, though China and India bucked the regional trend, while Korea was closed for a national holiday. Taiwan led the losses amid a sell-off in semiconductor stocks. Europe's Dow Jones Stoxx 600 is little changed as small early losses were reversed. US shares are...

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Long Term Real Interest Rates Fell Below Zero in all Euro Area Countries

This is Naked Capitalism fundraising week. 1408 donors have already invested in our efforts to combat corruption and predatory conduct, particularly in the financial realm. Please join us and participate via our donation page, which shows how to give via check, credit card, debit card, or PayPal. Read about why we’re doing this fundraiser and what we’ve accomplished in the last year, and our current goal, more original reporting. Yves here. The enthusiasm for negative real (and in some...

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China Returns, ECB Record, Fed Minutes and the Week Ahead

Many high-income countries experienced little growth but strong price pressures in the 1970s.   Since the mainstream economics said the two were mutually exclusive, a new term had to be created, hence stagflation.  Fast forward almost half a century later, and mainstream economists are still having a problem deciphering the linkages between prices and economic activity, such as inflation and employment. Theory needs to accommodate the new facts. Theory is being challenged in another...

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QE By Any Other Name

“What’s in a name? That which we call a rose, By any other name would smell as sweet.” – Juliet Capulet in Romeo and Juliet by William Shakespeare Burgeoning Problem The short-term repo funding turmoil that cropped up in mid-September continues to be discussed at length. The Federal Reserve quickly addressed soaring overnight funding costs through a special repo financing facility not used since the Great Financial Crisis (GFC). The re-introduction of repo facilities has, thus far,...

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Greenback Shows Resiliency, Stocks Don’t

Overview: Shockingly poor ISM data sent shivers through the market on Tuesday and hand the S&P 500 its biggest loss in five weeks and took the shine off the greenback.  The S&P 500 reached a five-day high before reversing course and cast a pall over today's activity.  All the markets were lower in Asia Pacific, with China and India closed for holidays. Europe's Dow Jones Stoxx 600 reached a two-month high yesterday before selling off sharply, and it has seen follow-through...

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Mark Carney’s Trojan Unicorn — Are Central Banks Considering Stealth Nationalization in Sovereign Digital Currencies?

This is Naked Capitalism fundraising week. 388 donors have already invested in our efforts to combat corruption and predatory conduct, particularly in the financial realm. Please join us and participate via our donation page, which shows how to give via check, credit card, debit card, or PayPal. Read about why we’re doing this fundraiser, what we’ve accomplished in the last year and our current goal, funding meetups and travel. Whether or not the purported explanation that the plot and...

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The Wholesale Zoo: Where Did All The Animals Go?

One of the most maddening aspects of the recent repo market, federal funds mashup is the lack of context behind it. The event is being characterized and described as if in isolation. Regulations are squeezing dealers at the same time there is a lack of bank reserves. Thanks to QT, there’s just not enough liquidity to go around. Therefore, the Fed adds a repo facility of some type and, voila, back to our regularly scheduled programming. It all sounds very comforting. The focus on bank reserves...

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