Notes From Underground: Venturing Into the Global Morass

As we get back up to speed, here is another FRA podcast, with Barry Ritholz, David Rosenberg and myself. Enjoy the discussion as we prepare for the the coming volatility of the election season. Pandemics, recessions, elections, oh my.

Click the link to listen to the podcast.

On a somewhat related note, other electronic presentations will be posted at a comprehensive website where there will be a complete archive of blog posts and available YouTube recordings. I will post the link soon.

In the financial space, this week Federal Reserve Chairman Jerome Powell will conduct a simulcast as part of the Jackson Hole Symposium. The critical issues will be Yield Curve Control (YCC) and other efforts to financially repress the rentier class.

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15 Responses to “Notes From Underground: Venturing Into the Global Morass”

  1. the limey Says:

    welcome back trotsky. The american limeys have missed you. I, for one, welcome the chaos of 2021 and looking forwards to a less fiscal 1984 world where FIAT cryptocurrencies roam the lands…
    hugs

  2. Pierre Says:

    Glad to have you back!

  3. Pierre Says:

    This should give one insight to how the fed is thinking.
    From Michelle W. Bowman speech today:

    “It remains possible that the economic challenges will persist beyond the forbearance time period provided in the CARES Act, and if so, we would almost certainly see some of these loans transition into longer-term delinquency status or enter into renewed deferment periods.”

    https://www.federalreserve.gov/newsevents/speech/bowman20200826a.htm

    • The Bigman Says:

      Just caught tail end of Powell Speech OMG my head is going to explode As for how the Fed is thinking it is certainly is not clearly. Powell acknowledges the death of the Phillips curve( Jerry it’s been dead for a while) and that there can be full employment at inflation rate less than 2%.(as my Dad use to say: he had a firm grasp of the obvious) But then in the very next breaths he states the Fed will still use its tools to reach the elusive, mystical goal of 2% inflation. Huh? If the economy is at full employ at less than 2% what else does one hope to achieve? Am I missing something here?

      • ShockedToFindGambling Says:

        Big……seems to me the only significant tools he has left are NIRP, Yield Curve Control, and destroying the currency.

        No formal YCC, but my guess is the FED will increase buying of longer bonds.

        With a recession about to get worse, demand for goods won’t increase and neither will money velocity……..so those won’t increase inflation, IMO.

        So, we’re in a box…….destroy the currency and Long Rates go up……and the economy cannot handle high Long Term rates.

  4. yraharris Says:

    e Iconoclast: Shinzo Abe and the New Japan Hardcover – November 1, 2020
    by Tobias Harris (Author)

  5. kevinwaspi Says:

    The Fed worships a false god, 2% inflation. They will burn countless victims on the sacrifice altars to achieve it, and in the process are blind to the obvious inflation running double digits, (financial markets) while exacerbating the wealth divide. They will crush savers, individuals as well as pensions, and ignore the debt burden keeping households in chains. All of this from “enlightened academics” who couldn’t make a payroll if their next publication depended on it. Jay Powell has been a supreme disappointment, evidence today with his praise for Ben Bernanke!
    The hubris of these “economists” is only surpassed by their ignorance.

    • ShockedToFindGambling Says:

      Looks like Powell has unleashed the bond vigilantes…….big mistake………this economy can’t withstand sharply higher interest rates.

    • TraderB Says:

      Professor-
      An entire generation of people (baby boomers) bought up credit risk for the wrong price, and for the past 20 years the government has been bailing them out at the expense of future generations. College costs $80K/year, the median income is $50K, and all of the future earnings have been discounted to a present value to enrich the very people that should have $0.
      Just when you think this can’t get any more despicable than it already is, the FED will find something else to do. We think these guys have run out of “tools”, yet they continue to amaze us. They will stop at nothing to protect sellers of volatility.
      When does it end?

      • ShockedToFindGambling Says:

        Trader, agree with what you said.

        The thing that amazes me, is that we are repeating the mistakes of 2002-07 Exponentially, and no one seems to realize it or say anything about it.

        This is a much bigger bubble than 2008, and the crash will likely be bigger.

      • yraharris Says:

        Trader–now listen to Brainard at Brookings yesterday and tell me what you think

      • TraderB Says:

        Yra- Just watched her comments. It looks like the next tool is defining how long we will have ZIRP in place for… eternity.

        Note: I think they are doing this not out of recklessness but rather a fear that the deflation we are about to all witness is something they have no tools left to stop.

        She elaborated that much more Fiscal Policy is needed. Duh.

  6. Srjean Dosenovic Says:

    Glad you are back, Yra!

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