Posts Tagged ‘Janet Yellen’

Notes From Underground: She Does It Backwards and In Heels

June 14, 2017

Commentators on dance technique always maintain the Ginger Rogers was a better dancer than Fred Astaire for she performed everything he did but “backwards and in heels.” At today’s press conference the financial markets were left with the sense that Chair Yellen wants to rollback the massive balance sheet promulgated by Ben Bernanke. The most “hawkish” piece from the day was when Yellen said it’s not unhealthy to have a gap between the FED and MARKET EXPECTATIONS.

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Notes From Underground: Some Perspective on Wednesday’s FOMC Meeting

June 13, 2017

The FED has painted itself into the proverbial corner by pre-announcing a rate hike. The market will be listening to Chair Janet Yellen’s press conference, which takes place at 1:30 CDT, a half hour after the Fed releases its statement and summary of economic projections. The market is expecting some discussion Fed’s balance sheet unwind, but Yellen will be cautious as she won’t want to cause a large selloff in the Treasuries led by the algo-driven headline readers. Tomorrow morning the Bureau of Labor Statistics releases the CPI data, alongside the Census Bureau’s retail sales data. Market consensus is for tepid numbers on both releases.

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Notes From Underground: A Review of Nehru Versus Nairu

May 11, 2017

Yesterday, Boston Fed President Eric Rosengren filled the airwaves with talk about the FED to be more aggressive in raising rates in order to prevent wage inflation from curtailing the current expansion. The continued concern from Wall Street about the POSSIBILITY of wage inflation because of FULL EMPLOYMENT reflects on the flaws in central bank’s models. Nairu (non-accelerating inflation rate of unemployment) is so 1970s, when globalization was just beginning and private sector unions had genuine bargaining power. The end of the Cold War unleashed hundreds of millions of workers to compete with workers in the highly developed and advanced economies. The fall of the Berlin Wall pressured even the strong German unions as the fear of jobs moving to Eastern Europe resulted in Social Democrat Gerhard Schroeder initiating the Hartz IV labor reforms which resulted in stagnant wages in return for some job security.

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Notes From Underground: What Was Learned From Draghi and Yellen

March 20, 2017

In reviewing the March 9 ECB and March 15 FOMC meetings, the press conferences emceed by President Mario Draghi and Chair Yellen revealed little but raised questions about serious issues confronting the world’s two key central banks. The ECB maintained its current policy and will scale pack monthly QE activity to 60 billion euros starting April 1 while keeping its deposit rate at NEGATIVE 40 basis points. Draghi bowed deep and heaped praise upon himself and his fellow board members by proclaiming that they saved the EU and the euro. Draghi said “without a single currency there could not be a single market.” It was Draghi’s July 2012 speech of “we will do whatever it takes” to preserve the euro, which saved the currency and logically means the ECB saved the EU.

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Notes From Underground: Just a Song Before I Go

February 14, 2017

We had to get back home

And when we opened up the door

 I had to be alone
Notes From Underground will be taking a short break. I will be relaxing unless something major breaks, in which I will chime in with commentary. I will also be reissuing previous blogs related to Greece and the IMF from these dates:
July 20, 2011
November 9, 2011
November 26, 2012
May 26, 2015
Every now and then I like to revisit the 1,200 or so blogs I have written since December 2009 and take a measure of their relevance in today’s world. WordPress has a high quality archive so my readers can scroll back and look to see where we have traveled since the inception of Notes From Underground.
Now, let’s look at Tuesday’s testimony from Fed Chair Janet Yellen before the Senate Banking Committee, as well as other news tidbits.

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Notes From Underground: A Financial Repression Authority (FRA) Podcast With Peter Boockvar

February 12, 2017

It is a great honor to feature another podcast with Peter Boockvar for The Financial Repression Authority. Peter is certainly one of the regular commentators that I watch with great interest whenever he is on Bloomberg, Fox Business or CNBC. I think we cover much of the global financial landscape. While it may run long, it is a lot easier than reading a 20,000-word blog post. Pour the scotch and give it a listen.

CLICK HERE TO LISTEN TO THE PODCAST EPISODE!

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Notes From Underground: FOMC Decision Day Is Upon Us

January 31, 2017

Janet Yellen and the FED take center stage tomorrow and the consensus is for NO CHANGE. The market believes the FED will be on hold until March. BUT I OFFER THIS: If I was the FED chair I WOULD RAISE RATES 50 BASIS POINTS to take some of the risk out of the U.S. equity markets. The S&Ps are virtually unchanged since the December FOMC meeting but the market’s enthusiasm for anticipated tax cuts, regulatory relief, and possible currency intervention means the FED cannot wait to let the economy run “hotter for longer,” especially because of the 4.7% U3 unemployment level. If Chair Yellen wishes to burst the TRUMP exuberance it is time to move aggressively to stem the rise of a potential inflationary threat.

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Notes From Underground: Oh, Janet, There Is A Santa Claus Rally Brought About By the QE Rain

December 13, 2016

Yes, the day of decision is upon us and everybody is SURE of a 25 basis hike from the FOMC. IF I WAS IN CHARGE–NO, NOT JOSE CANSECO, WHICH WOULD BE MONETARY POLICY ON STEROIDS–I WOULD RAISE RATES 50 BASIS POINTS AND ISSUE A WARNING OF MORE AGGRESSIVE INCREASES TO COME. Alas, I am but ashes and dust. The FED has prepared the market for a certain 25 but here are the things to watch:

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Notes From Underground: The Markets’ Christmas Wish: A Nonfarm Payroll Number of +300,000

December 1, 2016

The first Friday of the month brings big news for the data dependent Fed. The market consensus is for 185,000 job gain and average hourly earnings increase of 0.2% and the work week to remain unchanged at 34.4 hours. In my opinion, a HUGE increase of 300,000 jobs with another 0.4% increase in wages (similar to last month) would bring great pressure on the FOMC to increase FED FUNDS more than the market’s expectation of 25 basis points. What I am saying is purely THEORETICAL but it would make for an interesting discussion for the DATA DEPENDENT FOMC. It’s especially interesting as the exuberance of the tax cuts, infrastructure projects, rollback of regulation, the equity markets should prompt the asymmetrical nature out of the FOMC decision-making process.

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Notes From Underground: May the Circle Be Unbroken

November 17, 2016

So Jamie Dimon is being considered for Secretary of Treasury as the theme of Wall Street Insiders being the only “Stuarts” of the financial system remains on the front burner. What is interesting is that the rumors persist even as JPMORGAN is fined more than $280 million for providing jobs for the offspring of the Chinese elites in order to secure an inside track to the China power center. Hey, why not put Dimon in charge of the Treasury? That way he can hire the New York elite’s Ivy League kids for internships and other such jobs. It would really secure the fidelity to JPMorgan wealth management teams even more than being a bank recognized as too big to fail. Again, the most competent person to be the Secretary of Treasury is Sheila Bair for her wisdom, regulatory experience and strength in combating the Wall Street “wizard,” Tim Geithner. Jamie Dimon for Treasury  ought to be a non-starter and he would be crazy to take the job for the intense scrutiny he would undergo. Enough of this rumor. Let’s get back to the Fed.

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