Posts Tagged ‘Fed’

This is for the birds

January 25, 2019

I thought I’d take a gander

at our nation’s slow meander

into polarized politics’ clown’d identities,

as chronic deficits  drain our amenities.

Meanwhile back at the ranch

not much chance in extending an olive branch

in  the present  state of our union,

cuz our leaders share no communion.

They find it advantageous to split  into camps

which somehow blows out our Liberty lamps.

So obsessed with the clown scenario showdown,

congress anoints the annual guvmint shutdown,

until  the farcical politics runs its course

while our nation’s deficit’s on a runaway horse.

Someday no credibility will be left in the US dollar

as Fed and Treasury in red ink they waller.

Someday dollars will be valued as turds,

cuz their politicking’s all for the birds.

ArguBrds

Glass half-Full

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Yes, Toto, we’re in a brave new swirl.

January 28, 2018

Today while perusing a post on the Seeking Alpha financial network I came across what appears to be a very sensible explanation of what we see in the world of finance and business today.

This no-nonsense analysis is occasionally echoed by other writers on the SA site, most notably Mr. David Stockman, former budget director for President Reagan.

He was a high-flyer back in the day, the pre-Greenspan days.

But here I make reference to a different contrarian analyst, Mark A. Grant,  upon whose article I stumbled upon this morning.

  https://seekingalpha.com/article/4140703-universe-edge-restaurant?sht=p3a1ld&shu=8wcf#comment-77507865

From a distance, I’ve been following the contrarian school of thought ever since the fall of ’08. I say “from a distance” because I am neither an economist, nor a significant investor. I am a mere citizen who happens to be a consumer, an American, an author and a semi-retired person, age 66.

This contrarian school of alarmist financial analysis generally demonstrates a perpetual amazement; their astonishment revolves around the credit-mongering house-of-cards built by the central bankers of our preset world (the Fed, EuroCBank, Bank of Japan, People’s Bank of Japan, etc.). It’s not that the contrarians have much respect for of the central bankers’ delicate arrangement of interlocking currencies and trade incentives; rather, their astonishment arises from the mystery of why it has not yet fallen apart and produced a new crash.

You see, this new international construct is not founded upon traditional economics, but rather (as it appears to this layman) upon that (at the time) new-kid-on-the-block upstart school founded in the 1930’s by Mr. Keynes; it’s all about governments and banks perpetually tweaking national/international money spigots to produce certain desired effects.

Our current zombified house-of-cards scenario has been at work for a decade or so now, ever since the crash of ’08, with its aftermath of Great Recession or great whatever-it-is.

Getting back to the source of this present article: This morning I was reading Mr. Grant’s take on the present situation and comparing it for the umpteenth time to the contrarian undertow that continues to make perfect sense. This bearish complaint corner has been going on for so long I’m beginning to wonder if the fiat-wielding central bankers have actually managed to change, by their manipulations, the fundamental nature of money.

Maybe we actually are now in a brave new world where the old rules of debit/credit will never again apply.

With all these electrons flying around the planet–all these monetized digital representations of presumed wealth and bank-enabled assets–haven’t we truly ditched the old gold-backed world of currencies-dollars, pounds, francs, marks, drachmas, denarii, Euros, rubles, shekels, yen, yuan, SDRs and zlotys?

Could Bitcoin and such be nothing more than a flash-in-pan death-throes sparkle signifying the end of our great age of post-BrettonWoods expansion? 

Might this extended wave of central banks’ Quantitative Easing actually turn out to be the debt-driven tidal wave that propels us into a land that prime forgot, where all the rules and practices of days gone by are tossed aside forever in the liquidity flood and trash heap of history?

ShipWrek

We’re getting to a precarious place now where the only solution will be to tear up the score-cards, balance sheets, and start over. The central governments of the world are forever indebted to the central banks of the world. It certainly seems that way to this observer. I’ll be surprised if we ever get back to what Mr. Smith called “the wealth of nations.”

We ain’t in Kansas any more, Toto. Exactly where we have landed is unclear. And it just might be that tapping our ruby-slippered heels of old-school analysis are gone with the wind.

When this whirlwind of fiat-instruments does wind down to a dull roar and all the chips fall where they may, who/what institutional entities  will have wrangled control of the new asset-spewing beast? Whatever that entity turns out to be–it (they) will be in a position to dole out the newly-zombified assets to the world’s surviving movers and shakers. I guess most of us out here in lala land will be quakin’ in our boots.

As for us commoners, we may all of us have to settle for a mere meal-ticket while the big chips get re-assigned.

A meal-ticket  on a card or a chip, of course.

What troubles me is: what new rules or allegiances will be demanded by the powers–that-be?

What will it cost us, John Doe/Jane Smith, to even get in the game?

King of Soul

the Cloud Spinnin’

December 27, 2017

Crave and Dis were out on the net

analyzin’ what people do and don’t get.

They were striving like fools to make some sense of it all—

how stocks keep risin’ while Main Street’s in free fall.

As usual they couldn’t figure it out

‘cuz market keep whizzin’ up but never fizzle out.

What go up used to now an’ then come down

but in so many algos price discovery cannot be found.

Cuz them high-freq algo rhythms keep chasing differentials,

slicin’ and dicin’ in microsecond sequentials.

zig-zagging through zero on them slashing trades

with prancer and dancer caught up in their daytrade charades.

Fed and BLS try keep it all on an even keel;

thus wheelers and dealers can do what they feel

using that leverage to drive the thing high

while down in the flyover folks jez gettin by,

Out in the hinterland folk be livin’ paycheck to paycheck

while markets swirl with big Reserve ratchet.

Main Street and mall be sunk in some kinda funk

while stocks get high and bonds tend toward junk.

So here’s Fed pumpin’ air and BLS blowin’ smoke

while dis-ployees on the street can now take a toke,

maybe ease da pain a bit and sluff off the stress

while scammers keep on lookout for nearest egress.

Meanwhile back at the tranche it’s a tale of two Worlds:

cuz Feds stir deposits in Central Banks’  swirl

to keep all dem fiats floatin’ and spinnin’

and keep all dem dealers winnin’ and grinnin’.

Meanwhile back at the ranch it’s a tale of two Worlds:

gridiron boys diss it as  star/stripes unfurl.

Now politicos polarize while civility disappears

and folks get edgy cuz all these changes raise fears.

The lefties said we gotta heal and gotta come together,

with blah blah blah, kumbaya and all this carbon-driven weather.

But then the Donald popped out and he stole the show

cuz flyover folk said the lefties gotta go,

Said they made war on religion and so made way for jihad.

“No, it ain’t about about carbon, transgender, nor deleting our God.”

Them lefties wanna keep all our icons sexy and cool:

men, women and all in between, let ‘em drool.

Yet here come them jihadis to slap hijab on women

so men can’t be tempted while breathin’ or swimmin’.

Maybe lefties should reconsider morality and a little self-control

before they snuff out the disciplines of that religion of old.

Now we have progressive elites vs. them rich one-percenters;

we have media elites with Berkeley dissenters,

while Joe Blow and Jane Doe threaten to take up arms

cuz their kids can’t be programmed by ungendered schoolmarms.

It’s a Tale of two World-views out there, I tell ya,

with debilitating ideologies and digitizing money.

But don’t freak out as you wander through this fair;

from now on we pull money from thin air.

I mean it used to be soil and toil, blood and sweat

as we toiled and toiled our assets to get.

But now the new age has risen upon us:

Everyone’s due their guaranteed bonus.

Such a tempest we have now

in the swirling deficit cloud,

it insures us all winning

so the world keeps on spinning.

Cloud

King of Soul

the Ole Firmer’s Almaniac

May 27, 2016

The ole firmer walked around the backside of the barn. His wearied eyes took a moment to focus on the horizon; dark clouds appeared to dominate that distant line; they’d been hanging there for quite a long while now. The immediate vicinity was clear, however, if BLS numbers are to be believed. Mixed signals here there and yon. The times they are a-changin’, thought he, and things ain’t ClasicBldgRuf
what they used to be.

The rules of the game have changed; the old computations are no longer working, with the ole firmer and his firm being blindsided by all the new manipulations, robo-washed sterile by robo-driven arbitragers as if someone behind the sprays and fluff were cleaning the clocks of commerce, wiping away the profits, constantly leveling the playing field and rendering the firmer high but not dry, now eyeless in nasdaq, then dumb in the dow, spooked by the S&P, then suddenly swept up again in a flood of liquidity, floating on Fed flotsam, pummeled by day trade dealers punting buyback fluff up and down the field. The firmer pondered all this while studying the broad side of his barn. Need to fix that roof-– the thought crossed his mind for the umpteenth time.

Then without warning, his step coincides with a pile of BLS. Oh shit, exclaimed he. Up on the rooftop, the ever-vigilant barnyard blackbirds squawked loudly, as if trumpeting their amusement at his misfortune.  Caw! Buyback! Caw! Quoth the raven: Evermore! Now and evermore! So shall your ascending P/E path be: driving under the influence of BLS, monitored by SEC, checked with OMB, hog-tied with Dodd-Frank, frothing high in P/E ratios, fearless Fannie and fawning Freddie sharpening pencils in the background, consuming FOMC reports, leaning on Fed puts, flummoxed at SEC stops, disgusted with IRS farts and bewildered by WTF surprises.

LOL . . . not.

The ole firmer’s labor participation rate was, and had been for awhile, after 89 months of zero-bound interest rates on the downward trajectory–headed south, as some folks say, although he  wasn’t comfortable with the phrase. And out there on what used to be the open prairie of Price discovery–that old crossroads of supply and demand– well, it has become well-nigh impossible to determine where, when, how and why, it seemed to the ole firmer.

This is what it felt like, he surmised, to be on Main Street in a Kmart world, then at Kmart in a Walmart world, now being disoriented in an Amazon jungle, no way out,  with the Fed ham-stringin all the supply lines so’s to simulate demand on a rising level. How this gmo steady-state staid new world of post-capital never-everland came about he’d never understand.

The old firmer would never understand. He felt like the onslaught of old-timers’ disease was gnawing away at his youthful entrepeneural sensibilities.

The obnoxious ravens on the roof calmed down, their screechy cawing now lapsing into a low zirping. Quoth the raven–Nevermore! There’s no real investment any more. No more frontier, no more exceptional expansion, no more manifest destiny, where do we go from here, caught between rocknroll and a hard face.

They say casinos are big now.

Where’s the high-flyin’ high-multiplyin’ authentic productivity? Inventories high, sales low. Slow go. What would Rockefeller do? Where’s JP Morgan when you need him? Carnegie’s steel has all been laid; Edison’s taking a nap  and Bell won’t answer the phone. No Ford nor Chevy on the horizon that I can see, thought he. Watson’s now a programmed response. Fairchild’s been implanted in a solid state econ. Gates is creaky; Jobs is gone– out there somewhere on that musky dark cloud horizon. What’s everybody doing?

Tappin’ on chinky glass, devolving in devices vices, sippin’ Singapore slings,  all sound and futility signifying no-growth, thought he, hobbling along on a programmed 2% inflation path. Old-timers like me can no longer hit the broad side of a barn with our antiquarian projections based on old-school free-market dynamics, rallies and hog bellies, bushels, widgets and gadgets, buy and sell orders ’til the bears come home, might as well lay bricks in mortars with all these start-up farters.

Out on the horizon, big dust-storm coming up. Bulls are at it again, trying to stampede their way out of the Everything’s OK corral, but Uncle Fed and Aunt Fannie shut ’em down every time.

Glass Chimera

An American poem

August 3, 2013

Punchbowl herds on de game Preserve

sippin up liquidity from de FedReserve,

dey spec and dey sling

dem dummy dollars, an’ sing:

Oh give me a home where the FedFunds do roam

and de sheep and de bulls graze on Loan,

where seldom is heard a deflative word

and Govment reports steer de herd.

 

Now down in de City

workfolk stay gritty:

burgerflippers on strike

suburbers take hike

while Fed pumps liquidity

jackin up mediocrity

de system reward passivity

instead of generatin’ activity.

 

While corpos say downsize

lefties get organize

obsesies say supersize

an’ children go unsupervise;

Den Anonymous  grab de tail

of dat lowlivin’ beasty grail,

scarin’ up rabble hell

against highrollin’ game Preserve shell.

 

Somewhere out here in mudville today

de prophets dey cry while de profits may play;

but dere’s no more renewal to tout,

cuz mighty America has struck out.

On de udder hand maybe not:

Have I understated our potential a lot?

 

O give me a land where innovators roam,

and de Feds on de Preserve get sent home,

where thee brave make a move and thee bold take a chance

at renewing our anthem, and reviving our dance.

 

Glass half-Full

Time for the fiscal cliff plunge?

September 9, 2012

Back in the 1930s,  the United Kingdom was the declining economic power of that age, as the United States is today. During those turbulent early ’30s, the Brits were having some trouble balancing their accounts, and they didn’t have enough gold reserves to back up the money demands being made on their financial system. So they forsook the gold standard as a means of backing up their currency, the pound.

About that time, as this 21st-century yeoman internet-reader (me) hath been able to ascertain, the Brit economist John Maynard Keynes figured out that, even though the currency was no longer backed up with gold, folks were still passing money around and doing business as if nothing had changed. This discovery became, by and by, the basis for all monetary activity throughout the world for the last eighty years or so.

Money is money, whether there’s a vault full of gold.gov somewhere in England or in Fort Knox or anywhere else in the monetized world. That’s the point. We’re still passing the stuff around as if it had real value, even though there’s no gold backing it up. People love spending it, and the love getting it. Perhaps they always will, even when money becomes mere electrons.

Now we are running out of money again, so the financial markets and the stock markets are obsessing about whether the Fed will bail out our money system yet again, for the third time, since the big thrill roller coaster ride of 2008.

This morning, I encountered an article online by a fellow, Joseph Stuber, who seems to actually know what he’s talking about, and can explain the current ramifications of this money dynamic better than I can:

http://seekingalpha.com/article/852831-market-euphoria-continues-as-we-get-ready-to-jump-off-the-fiscal-cliff?

Mr. Stuber mentions, right off the bat, one morsel of truth that John Maynard Keynes left behind; it is this statement:

“The market can stay irrational longer than you can stay solvent.”

That’s basically what happened in ’29.

These days, the  whizzbangs who run the markets will work hard milking profits out of the system for as long as they can.

In fact, every stock trader will wheel and deal and play chicken with their suckerish counterparties right up until the time that the whole money machine runs out of fuel (imagined value), in hopes that he will be able to exit the game before the house falls and somebody else is left holding the bag of severely devalued assets.

Some of the perceived value of this market pertains to what Congress and the Fed will do, or not  do, to retain the integrity of our currency and, therefore, the value our entire economy.

Mr. Stuber offers two possible scenarios of what may happen when Congress attempts to (or pretends to) deal with the fiscal cliff that awaits us, come January. The so-called fiscal cliff is the deficit debacle that Congress shelved for a year so they wouldn’t have to contend with its difficult choices before the election.

My layman’s rendering of Mr Stuber’s two scenarios (extreme paraphrasing) goes something like this:

If Congress make a deal, like they did last year, to extend  the expiring “Bush” tax cuts, then we will muddle through the next year or two just as we have been doing. High unemployment will become the new paradigm, a semi-permanent steady state of dysfunction and financial misery for sizable segments of our population, and nothing much will change, or maybe, who knows? it will all get worse.

If Congress doesn’t make a deal, and the tax cuts expire, and the so-called “automatic” austere cuts of last year’s sequestration deal are put into effect, then the long-awaited economic correction that we’ve been forestalling since fall of ’08 will, at last, take its toll on our high-on-the-hog standards of living, and it will not be pretty, and recovery will probably not roll into effect until, say, 2017, or so, when our overvalued economy tumbles to a new (lower) foundation for true growth to get a foothold.

Someone should mention this to Mr. Romney before he makes as many vain promises as his predecessor did.

We shall what happens on Nov. 6.

And we shall  see what happens  when Congress re-convenes after the election.

In Charlotte on Labor Day, I heard Chris Matthews mention that the Dow, which was at around 8000 when President Obama took office, is now hovering around 13,000. Chris’ implication was that the President must be doing a good job, or the Wall Street crowd would have pulled their rug out.

Perhaps that is true. I think that Mr. Obama has done as well as can be expected of any Democrat, under the circumstances that were passed to him.

But the question arises: what has the level of bubblish value in our stock markets got to do with anything that is happening in the streets and factories and households of our country?

Meanwhile, back at the ranch, or the apartment, as the case may be,  what about you, Mr. America, Ms. America? What will you do this week to pitch in and help solve the problem?

Glass half-Full