Posts Tagged ‘John Williams’

Notes From Underground: Torn Between Two Lovers, Feelin’ Like A Fool

July 21, 2019

This Mary MacGregor ballad released in 1976 notes how a woman is torn between two men she loves and it is “breakin’ all the rules.” This is the situation Federal Reserve Chairman Jerome Powell and the FOMC finds itself: The love of its dual mandate and its torrid affair with the beloved Phillips Curve. Now it appears that the FED leadership is abandoning its affair with Phillips Curve while it grows more attached to its other love, Mario Draghi and the European Central Bank.

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Notes From Underground: Powell Gets Backup From Clarida and Williams

July 18, 2019

Following Wednesday’s short introduction to the significance of the Powell in Paris speech in Paris, we a digestif in the form of Federal Reserve Vice Chairman Richard Clarida and New York Fed President John Williams providing supporting the chairman. As a result, the dollar sold off, there was a major rally in GOLD, and boost to equities even as earnings proved to be TEPID. But what I’m waiting for is a STEEPENING in the U.S. yield curves when the world’s bond investors contemplate that the FED has ABDICATED any sense of FIDUCIARY RESPONSIBILITY for its status as a reserve currency.

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Notes From Underground: Looking for Headwinds In All the Wrong Places

August 18, 2016

It’s tough to enjoy the final days of summer when the FED can’t just relax their wind pipes. The continued contradictions emanating from those who sit in the same meetings is jeopardizing the Fed’s credibility … AGAIN. Last Monday, San Francisco Fed President John Williams published an economic letter in which he posed the concept of either raising the inflation targets, or the Fed ought to target a NOMINAL GDP level. This was perceived to be an extremely DOVISH view as it would keep the FED on HOLD far longer than the market currently predicts. The problem was that Williams had voiced a HAWKISH view just two weeks earlier. The quick about-face makes me wonder if the Fed’s logo should be the Roman god Janus.

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Notes From Underground: Bored of the Fed

March 21, 2016

In the 1970s, National Lampoon wrote a parody of Lord of the Rings, the Tolkien Trilogy that captivated college campuses. In a caustic response to the Tolkien craze, the geniuses at National Lampoon wrote BORED OF THE RINGS. Well it is time to claim that I AM BORED OF THE FED AND ALL CENTRAL BANKS. The repetitive dramas playing out all the over the globe by the unelected academics as they try to elbow aside the Davos elite as the Masters of the Universe. The central banks can claim to be the ONLY GAME IN TOWN but every effort to generate economic activity by lowering interest rates only relieves the voter-elected class of responsibility for creating growth through fiscal policy. Again, the concept of PUSHING ON A STRING WAS NOTED BY SCHUMPETER 80 YEARS AGO. You can stop an entrepreneur from borrowing by raising rates but you cannot lower rates if there is no sense of generating a positive return on the money. And here we are with central banks caught in a global money trap.

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Notes From Underground: Algos React Where Global-Macro Traders Fear to Tread

October 8, 2015

It is time to end the SCAM of “journalists” receiving embargoed FOMC and data releases 60 minutes before the market so they can prepare their stories. In a financial world where volatility is measured in nanoseconds the SEC and CFTC are doing a major disservice to the world of CAPITAL FORMATION by letting the algo headline readers create nanosecond pandemonium through key-word reading algos. I would argue that some “journalists” write the headlines specifically for that purpose.

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Notes From Underground: The Fed Will Raise Rates at the October Meeting (Wait For The Press Conference)

October 6, 2015

This afternoon, San Francisco Fed President John Williams delivered a speech that I believe signals a rate rise at the October meeting. It seems that the chorus of criticism from all corners of the political and economic spectrum is causing the FED to reconsider its September decision to keep rates at zero bound, even with the weak September jobs data. The voices of Summers and Krugman have been drowned out by the criticisms from investors and other academics. Why do I think the rate increase is coming? Williams gave three hints in a speech he delivered today, “The Economic Outlook:Live Long and Prosper.”

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Notes From Underground: The San Francisco Fed Says It Ain’t Rocket Science … Again

May 19, 2015

The talking heads in the financial media have a great deal to answer in regards to yesterday’s release of the San Francisco Fed’s Economic Letter by Rudebusch, Wilson and Mahedy in which the three researchers said: “We find  that a second round of seasonal adjustment implies that real GDP growth so far this year appears to have been  substantially stronger than the BEA [Bureau of Economic Analysis] initially reported.”

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Notes From Underground: Fed Creates Jobs by Printing `Data Dependent’ T-Shirts

May 11, 2015

Today, CNBC‘s Steve Liesman interviewed San Fran Fed President John Williams. In a swipe at Fed gallows humor, President Williams presented Liesman with a T-Shirt that said the Fed was DATA DEPENDENT. The humor part was Williams’s effort to cut-off Steve Liesman’s well choreographed question which amounts to: “Come on, John, share your inside view about the possibility of a RATE RISE at the next FOMC meeting (just between us, John).” So as to make sure that Liesman understands the consistent answer: It is data dependent. If the FED wants to create some jobs it can send everyone with a bank account a free “Data Dependent” shirt, compliments of their regional Federal Reserve. All sarcasm aside, President Williams’s view puts added importance now to the inflation data on Friday and of course the retail sales input on Wednesday. The consensus on the CORE RETAIL SALES is 0.3% increase so a strong number would be above 0.6%. If the theory of data dependence holds then it should be the SHORT END of the curve that gets sold and here is my reasoning: The 2/10 and 5/30 parts of the yield curve have steepened dramatically during the last two months as the market accepts the fact that the recent bout of weak economic data has pushed the FED further away from raising rates.

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Notes From Underground: To San Fran FED President John Williams, TAPER THY MOUTH

June 3, 2013

The markets were tossed back and forth again today as the sudden ubiquitous Fed President John Williams was letting the world know his views about curtailing the Fed’s bond purchases. Why is the Fed’s newest voice busy spouting about the bringing forward  tapering of bond purchases? It seems that Williams has decided that the U.S. economy is entering a virtuous cycle of rising home values, creating increased demand for autos and other large priced consumer durables. And then let’s add in the steady rise in equity values, as well as the repaired balance sheet of consumers, which will lead to job creation and possibly inflation. The question arises: Why does John Williams’ opinion carry so much weight? Because of his previous role as a DOVE on the FED board?

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Notes From Underground: The Significance of the WSJ OP-ED Piece … “Magnitude of the Mess We’re In”

September 23, 2012

A an op-ed piece in last weeks WSJ created a great deal of buzz in the financial media. Appearing a few days after the aggressive move by the FED, the opinion piece written by five eminent economists–George Schultz, Michael Boskin, John Cogan, Allan Meltzer and John B. Taylor–criticizes the Bernanke Fed’s QE policy from many different aspects. It is not the criticism that is significant but rather the stature of the economists that are calling the question of the FED’s continued one-dimensional response to the tepid growth following the deep recession of 2007-2008. The media would have the public believe that the only economists qualified to theorize on the problems at hand are those chosen by the FED and its research staff. The financial media bowed to the altar of Alan Greenspan– the Maestro, Oracle and whatever else–and thus the cult of personality was thrust upon the markets.

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