Posts Tagged ‘Kocherlakota’

Notes From Underground: The Fed Moves From Wall Street to Madison Avenue

August 31, 2015

Last week New York Fed President Bill Dudley opined that the economy looks great but is less compelling in regards to raising interest rates, while the Fed’s Vice Chairman insisted that we only want to do things right. There were also other Fed Presidents offering their thoughts and the markets became more confused. Each FOMC member seems to analyze the data and come to a different conclusion about the timing of a move to raises interest rates. Minneapolis Fed President Kocherlakota went from being considered a hawk two years ago when he proposed an initial target of 6.5% unemployment. Now he has moved his target ever lower and would prefer to wait until the economy runs a “little hot.”

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Notes From Underground: Janet — Klaatu Barada Nikto (The Day the Earth Stood Still)

July 29, 2014

Tomorrow is a big day for disseminating information with market-moving potential. The market is bored with war, pestilence and famine so it must be FED pronouncements and GDP data that can provide a volatility boost. The markets did twitch today as the European Union and the U.S. both upgraded the sanctions against Putin’s Russia. It will be very difficult for Russian banks and large energy consortiums to raise dollar- and euro-based capital. Even with the advent of new and improved sanctions the global equity markets barely moved, especially as corporate earnings in the U.S. continued its string of “beats.” The counter to the continued strength of the equity markets is the behavior of the global debt markets as European sovereigns from Spain to Germany have reached record low yields. The U.S. yield curves continue to flatten as investors continue purchasing 10- and 30-year debt driving long-term yields lower. Again, I will state that while the curves are flattening the 2/10 U.S. curve is not historically flat.

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Notes From Underground: Back To the Sixties–Output Gaps or Phillips Curves?

September 20, 2012

The FED hounds were unmuzzled after last week’s FOMC and “The Line it Is Drawn. The Curse It is Cast.” Bob Dylan must have been anticipating the difference of opinion that is developing within the Federal Reserve bank. In a speech last night, Dallas Fed President Richard Fisher said: “There are many superb PHD theorists among the 19 members of the FOMC and support staff. There are only a handful of us–four, to be exact–who have worked as bankers or in the financial markets.” Fisher  discussed holding back from further QE based on evidence from his business contacts. The Dallas Fed President was dismissed when,”Some suggested that perhaps my corporate contacts were not sophisticated in the workings of monetary policy.” (Hat tip to Professor K.W. for sending the piece). It seems that the collegial attitude is eroding at the FED if the ivory tower is not the place of residence. Today, it was the Minneapolis Fed President Kocherlakota who delivered what I consider to be an outlandish speech.

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Notes From Underground: Thanks For The Get Well Wishes…Now, Let’s Get Back To Work

March 28, 2012

While I was away, Mr. 37 revealed that he is a 37er so the markets OUGHT to take very seriously Ben Bernanke’s PROMISE to Milton Friedman that the FED will not make the mistakes of 1937 again. In the interview with Diane Sawyer and the speech delivered at The National Association For Business Economics on Monday, the Fed chairman displayed his 37er credentials in full force.

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Notes From Underground: Ben Bernanke pays homage to the BLUES MAGOOS (We Ain’t Got Nothing Yet)

August 9, 2011

Today the FED let it be known that they will MOST PROBABLY be on hold until mid-2013. The best outcome of this is that it removes the FED from the election campaign of 2012 and puts the burden on the 535 posers who pretend to represent anybody but themselves (yes, there are exceptions I know). The FED has done their “work.” Now it is time to get the fiscal house in order. The markets’ daily gyrations is representative of how uncertain the world’s capital feels: ONE DAY YOU’RE UP AND THE NEXT DAY YOU’RE DOWN. From Bernanke’s perspective, we ain’t got nothing yet.

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Notes From Underground: Is April EMPLOYMENT GOING TO BE A LION OR A LAMB?

March 31, 2011

The U.S. unemployment report will be issued on Friday  at the regular time: 7:30 CST. It seems that the consensus is for 210,000 nonfarm payroll, a rate of 8.9 percent and an increase in hourly wages of 0.2 percent. It seems that a 300,000-plus number is in the cards which is why the FED Presidents that are not of the perma-dove camp are ramping up the anti-inflationary rhetoric. Today, Minneapolis FED President KOCHERLAKOTA caused a late move in the DOLLAR, METALS and SHORT-DATED interest rates as he raised the possibility of the FED raising rates by 75 BASIS POINTS. The DOLLAR had been lower all day as month- and quarter-end positioning allowed the power trend funds to push their profitable positions in the desired direction, but KOCHERLAKOTA did cause a late reversal with his aggressive comments.

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