At Last – – FT Says Fed on Ropes as Yellen Seeks to Fend off Trump Blows

After a fusillade of excoriating and in many ways unprecedented attacks on the Federal Reserve by the Republican presidential candidate, Janet Yellen, the US central bank’s chair, finally hit back.
Ms Yellen last Wednesday dismissed as emphatically wrong Donald Trump’s claims that she and her institution were keeping short-term interest rates low at the behest of the Obama administration. ‘Partisan politics play no role in our decisions,’ she declared.
Mr Trump is throwing punches at a time when the US central bank is under assault from both sides of the partisan divide, and at a time when polling suggests public confidence in its leadership has declined during a subpar economic recovery.
Some experts say the Fed is vulnerable and that the populist attacks could fuel demands by politicians for tighter constraints on its policy freedoms. Mr Trump ‘is tossing a lot of fuel on the fire’, says Sarah Binder, a professor of political science at George Washington University. ‘It intensifies the partisan criticism of the Fed and keeps the Fed in the politicians’ crosshairs.’ Mr Trump’s interventions by no means mark the first time the Fed has been turned into a political punching bag. Previous Fed chairs have been the subject of barbs during presidential campaigns – including in 2011 when Republican candidate Rick Perry accused former Fed chair Ben Bernanke of ‘treasonous’ behaviour by conducting quantitative easing. Past administrations have seen outbreaks of tension with Fed chiefs, including under presidents George HW Bush and Richard Nixon.

This post was published at David Stockmans Contra Corner on September 28, 2016.

They Are Not Fixed! U.S. Banks Need Billions of New Capital Under New Fed Tests

Wall Street would have to come up with billions of dollars in additional capital in a proposed revamp of the Federal Reserve’s annual stress tests that could also scrap some provisions that lenders have criticized.
As the Fed has signaled for months, it is considering changes that would raise the minimum capital that the biggest banks need for a passing grade, Fed Governor Daniel Tarullo said Monday. But the Fed is also mulling concessions that Wall Street has sought, such as eliminating its assumption that lenders would continue to pay out the same level of dividends and buy back shares during periods of financial duress, he said.
The plan shows that even after a litany of new rules and capital demands imposed on the biggest banks in response to the financial crisis, regulators still aren’t satisfied that Wall Street is safe enough to endure another economic tsunami. Tarullo, the Fed’s point person on regulation, conceded that the proposal ‘would generally result in a significant increase in capital requirements’ for the largest lenders.
The overhaul tries to incorporate all the new capital requirements into the stress tests, which already represent the highest hurdle that U. S. banks must clear to show they can survive a hypothetical crisis. A particularly heavy mandate for Wall Street giants is an extra surcharge each firm has to maintain based on their size and complexity. For JPMorgan Chase & Co., that surcharge means an extra 3.5 percentage points of capital.

This post was published at David Stockmans Contra Corner by Jesse Hamilton, Bloomberg Business ‘ September 27, 2016.

We Are Stuck In Depression Until The Legend Of The ‘Maestro’ Finally Dies

ALHAMBRA PARTNERS / September 23, 2016
Alan Greenspan is confused – again. The man who admitted to the world a decade ago he didn’t know much if anything about interest rates is now trying to change that reputation by suggesting yet again interest rates are set to rise. In testimony before Congress in February 2005, the then-Chairman of the Federal Reserve actually said:
For the moment, the broadly unanticipated behavior of world bond markets remains a conundrum. Bond price movements may be a short-term aberration, but it will be some time before we are able to better judge the forces underlying recent experience.
To an economist, it was a ‘conundrum’ especially where econometrics and statistics and take the dominant view (if it can be called that). That is one facet to the Greenspan story that is so odd yet so compelling in all the wrong ways. Though he was an economist by schooling, he had more practical experience in the ‘real’ world. He served on boards of such illustrious companies as Alcoa, General Foods, even Mobil. But he was also a director for JP Morgan and Morgan Guaranty.
He should have known better, as his infamous 1966 essay on gold reveals. Thus, we can reasonably assume that what transformed his worldview was not economics (small ‘e’) but rather power. Not only had he been appointed to major corporate boards, he was heavily involved in politics, including the kinds that are the stuff of conspiracy theories.

This post was published at David Stockmans Contra Corner by Jeffrey P.Snider via.

Get Ready For The Mother Of All Stock Market Corrections Once Central Banks Cease Their Money Printing

Undue tightening by the US Federal Reserve could set off a perfect storm of recessionary effects
Global stock and bond markets have been all over the place of late. Rarely have investors been so lacking in conviction. Confusion as to future direction reigns, and with good reason after the spectacular returns of recent years.
For how much longer can stock markets keep delivering? Is there another recession on the way, or to the contrary, is growth likely to surprise positively, underpinning current valuations? Economic turning points are never easy to spot, but right now it’s proving harder than ever.
The immediate cause of all this uncertainty is, however, fairly obvious. It’s the US Federal Reserve again, and quite how far it is prepared to go with the present tightening cycle. Few expect policy makers to act at this week’s meeting of the Federal Open Market Committee.
Even so, a number of its members have once again been making hawkish noises, and another rise in rates by the end of the year is widely anticipated.
Indeed, it is on the face of it quite hard to see how the Fed can avoid such action. Already at 2.3pc, core inflation in the US is trending higher. The US labour market continues to tighten, and money growth, for some a key lead indicator, is strong.

This post was published at David Stockmans Contra Corner By JEREMY WARNER, The Telegraph ‘ September 22, 2016.

The Fed’s Decision Was So Bad – – Even Bill Gross Was Speechless

After the Federal Reserve decided to leave interest rates unchanged, bond guru Bill Gross told CNBC he was barely able to speak.
‘I’m choked with emotion and hardly able to speak,’ the portfolio manager at Janus Capital Management said in an interview with CNBC’s ‘Power Lunch.’ ‘After hawkish talk at Jackson Hole from [Fed Chair] Yellen and [Vice Chair] Stan Fischer, who even said there’d be two hikes in 2016, they’ve chosen to defer once more a necessary hike to normalize short-term interest rates and provide savers, in my view, with at least a bit of thin gruel to work with to provide for education, retirement and health-care needs.’
He believes the contradiction between what Fed officials have said leading up to the meeting and the outcome of the gathering is leaving investors ‘very confused.’

This post was published at David Stockmans Contra Corner By Michelle Fox via CNBC ‘ September 22, 2016.

Fed Seeks to Prohibit Companies from Merchant Banking to Promote Lending

The Federal Reserve wants to take away the ability of Goldman Sachs and other banks to invest in companies rather than acting as bankers and lending. The U. S. banking regulators are urging Congress to prohibit merchant banking where firms buy stakes in companies rather than lend them money. They are pushing for limits on Wall Street’s ownership of physical commodities after lawmakers accused Goldman Sachs and other banks of seizing unfair advantages in metal and energy markets in recent years.
Merchant banking has generally become the business of making private equity investments in non-financial firms, in particular, equity investments that have a venture capital character. Based upon a report on a multi-agency study of banks’ investment activities required by the Dodd-Frank Act, they highlighted ways to fix potential risks that regulators didn’t think were handled by the Volcker rule ban on certain trading and investments. However, Congress needs to pass legislation and they are subject to bribes that we call lobbying, which presents the greatest hurdle to actually changing anything. The Fed’s recommendations on merchant banking would end the ability to operate mines, warehouse metals, and engage in shipping oil.

This post was published at Armstrong Economics on Sep 22, 2016.

Note to Joe Q Public on Fed Policy: Promise in September, Deliver in December

‘Do you remember the 21st night of September?’
So begins Earth, Wind and Fire’s classic anthem to the disco era. The words are simple, some even nonsensical, but then there’s that beat. In the words of National Public Radio, it’s ‘the song that never ends.’ Forever timeless, ‘September’ endlessly infuses energy at wedding receptions, with some couples even choosing the 21st of September to say, ‘I do.’ What is it about that one joyous cadence-rich melody that continues to deliver equal measures of both happiness and hope? There may be no clear cut answer other than how good it makes you feel, but it is one sure fire way to crowd the dance floor. ‘September’ is so infectiously irresistible even hardened partisan politicos can’t help but bust a move – it roused the crowds of faithful at both the Republican and Democratic national conventions in 2008.
The beat was no less infectiously irresistible for then-struggling songwriter Allee Willis who caught the break of a lifetime when she was asked by EW&F’s leader Maurice White to co-write the band’s next album. As she recalls upon opening the door to the session, ‘They had just written the intro to ‘September.’ And I just thought, ‘Dear God, let this be what they want me to write! Cause it was the happiest sounding song in the world.’
The rest is history made in studio in 1978. With their creative juices flowing, this team closed their eyes, saw clear blue skies and then a star-filled night to be danced away. Willis does recall one niggle with the lyrics – that constant ‘ba-dee-ya’, that essentially meaningless refrain. When she insisted it be changed, White put his foot down to the benefit of generations of dancers who can’t help but break into their boogying best the minute they hear the song. ‘I learned the greatest lesson in songwriting from him,’ Willis said of White, ‘which was never let the lyric get in the way of the groove.’
We have to wonder what Atlanta Federal Reserve Dennis Lockhart will remember when he next hears, ‘Do you remember the 21st night of September?’ The date happens to coincide with his last September Fed meeting, marking the third at which markets had been set up for a hike only to be told to sit tight and wait for December.

This post was published at David Stockmans Contra Corner by Danielle DiMartino Booth ‘ September 21, 2016.

Monetary Insanity: When It Doesn’t Work – – Just Promise To Keep Doing It Until It Does

On July 14, 2006, the Bank of Japan raised its benchmark overnight rate off zero for the first time since introducing the world to ZIRP in 1999. In doing so, the BoJ noted that the Japanese economy in its view continued to ‘expand moderately’ and that risks inside the economy were ‘balanced.’ The central bank also sought to reassure, further commenting that despite one 25 bps rate hike ‘an accommodative monetary environment ensuing from very low interest rates will probably be maintained for some time.’
These words, all of them, should sound frighteningly familiar, as they are being redeployed in nearly exactly the same phrasing by the Federal Reserve. Whether or not the FOMC votes for a second rate hike today still remains to be seen, as before that ‘news’ there is first the BoJ once more admitting that its prior efforts didn’t actually work. For the record, Japanese officials actually carried out two hikes, a second coming in February 2007 just in time for the open minded to finally see what really had been going on in the global economy.
In other words, the Japanese policymakers made the same mistakes as are being made today. They assumed absence of further contraction was the same as recovery. In the singularly binary model of orthodox economics, if an economy isn’t in recession it must be growing; so if the economy isn’t in further recession and the economy is barely growing or even stagnating then it is assumed that growth is just being delayed. By the middle of 2006, the Bank of Japan believed there were enough signs the economic postponement had ended.

This post was published at David Stockmans Contra Corner on September 21, 2016.

What Will Result From Sideways?

The economy of 2015 started out ‘unexpectedly’ weak before succumbing to ‘global turmoil.’ It was the events of last summer that began to sow serious doubts about not just the economic narrative seeking to dismiss weakness (‘transitory’) but rather central banking and QE itself. The repeat in January/February further eroded mainstream credibility, particularly since only a few weeks before the Federal Reserve in particular pronounced full health. It was an embarrassing but poignant ‘dollar’ rebuke.
In the middle of 2015 just prior to the outbreak of the ‘dollar’ ‘run’, it was perhaps somewhat understandable for the layperson or the general public to wonder what was going on. Any disruption in terms of the domestic economy did seem as Janet Yellen was claiming. For all the grief even by late July last year, everything seemed to be limited to overseas events; a fact which economists and policymakers played up whenever they could. They should have known better.
I wrote at the end of last July that what was going on overseas was yet another warning even though it may not have seemed like it had anything to do with the United States:
Sticking with purely financial expression of the eurodollar standard it is easy at times to forget such monetary influence has very real consequences. That is true in the US in particular, as even though the recovery is both deficient and waning it isn’t the disaster it is in other, connected places. It was, after all, the rise of the eurodollar standard as a wholesale system starting in the middle 1990′s that more tightly stitched the global economy, an open system architecture that eludes, still, the grasp of monetary policymakers. As such, they have a great tendency to miss and misapprehend what is really happening and because of that they will simply make it all worse without much hope for an upside.

This post was published at David Stockmans Contra Corner on September 20, 2016.

Will the Bank of Japan cause a Global Bond Tantrum?

As investors anxiously await the key monetary policy decisions from the Federal Reserve and the Bank of Japan next week, there have been signs that the powerful rally in bond markets, unleashed last year by the threat of global deflation, may be starting to reverse. There has been talk of a major bond tantrum, similar to the one that followed Ben Bernanke’s tapering of bond purchases in 2013.
This time, however, the Fed seems unlikely to be at the centre of the tantrum. Even if the FOMC surprises the market by raising US interest rates by 25 basis points next week, this will probably be tempered by another reduction in its expected path for rates in the medium term.
Instead, the Bank of Japan has become the centre of global market attention. The results of its comprehensive review of monetary policy, to be announced next week, are shrouded in uncertainty. So far this year, both the content and the communication of the monetary announcements by BoJ governor Haruhiko Kuroda have been less than impressive, and the market’s response has been repeatedly in the opposite direction to that intended by the central bank.
As a result, the inflation credibility of the BoJ has sunk to a new low, and the policy board badly needs to restore confidence in the 2 per cent inflation target. But the board is reported to be split, and the direction of policy is unclear. With the JGB market now having a major impact on yields in the US, that could be the recipe for an accident in the global bond market.

This post was published at David Stockmans Contra Corner By Gavyn Davies, Financial Times ‘ September 19, 2016.

Second Half Rebound – – MIA Again!

Retail sales declined last month for the first time since March and manufacturing production slipped, government data released Thursday showed. Meanwhile, prices businesses receive for their goods and services were unchanged last month, a sign of still-soft demand at home and abroad. Companies also remain cautious about building up too much inventory, new figures showed.
Recent economic gauges, including evidence of a slowdown in August hiring, suggest the economy could be constrained for the rest of the year to a growth rate only slightly above the expansion’s overall 2% pace – the weakest of any since World War II.
Forecasters long expected an acceleration in the economy starting in the summer after nine months of economic growth around a 1% rate. The uptick was expected to deliver firmer wage growth and price gains, and put Federal Reserve policy makers in a position to lift the central bank’s benchmark interest rate by this month.

This post was published at David Stockmans Contra Corner on September 16, 2016.

BOJ Bond Buying And Japan’s ‘Crooked’ Yield Curve

In Japan, the yield hunters have become the hunted.
Investors who refused to swallow negative yields to hold Japan’s shorter-dated bonds are suffering, as an index of sovereign debt maturing in 20 years or more has lost 9 percent this quarter. The yield on 2036 bonds climbed to the highest since March 16 as BOJ Governor Haruhiko Kuroda noted last week that low long-term yields hurt returns on pension and insurance investments, even as he signaled there would be no reduction in easing with a policy review due Sept. 21. A 20-year debt sale Tuesday drew the lowest demand in six months.
‘JGBs are responding unreservedly to the BOJ’s message that it’s not desirable for superlong yields to be too low,’ said Takafumi Yamawaki, the chief rates strategist in Tokyo at JPMorgan Chase & Co. ‘The problem is we don’t know what the BOJ’s desired level is, and that’s created an atmosphere of paranoia in the market.’
The intensity of Japan’s bond selloff has sparked concern the market will become the epicenter for a global rout, just as it led a record rally in the first half of 2016. Federal Reserve officials are cautioning against waiting too long to tighten policy, while the European Central Bank is playing down the prospect of further stimulus. DoubleLine Capital Chief Investment Officer Jeffrey Gundlach is among those recommending investors prepare for bonds to fall.

This post was published at David Stockmans Contra Corner By Kevin Buckland and Shigeki Nozawa, Bloomberg Business ‘ September 13, 2016.

Janet – – You’re Gonna Have Some ‘Splainin To Do!

For those who might not get the intended pun in the above title, it’s a play on words Ricky Ricardo (Desi Arnaz) would use when demanding his wife Lucy (Lucille Ball) as to explain whatever mischief or crisis she suddenly found herself in on the ‘I Love Lucy’ show. I think it fits the bill today as to describe just what type of ‘mischief’ or ‘crisis’ the now Chair of the Fed., Janet Yellen may now find herself painted into. The only issue that’s not laughable for the comparison is the fact that Lucy’s escapades were fictional. Ms. Yellen’s are going to be on public display in an all too real reality – although it might be quite the spectacle rivaling anything on current reality television.
As I’m typing this it has been less than 48 hours since presidential candidate Donald Trump gave a speech in Philadelphia calling for a vast expansion of the military. Already there are arguments across the media about ‘how to pay’ for such an expansion. As usual the main stream outlets are throwing ‘cold water’ all over such an idea. After all, it’s easy to say ‘We can’t afford it!’ Easy to say yes, but the problem is – the same outlets have praised how easily we could afford, and ‘can do more!’ to cure the ills of this current economic malaise via The Federal Reserve and its toolbox of monetary magic.
Now let me say this directly, and as forcefully as I can so that there is no misinterpretation of what I’m stating here: I am not endorsing one candidate or another. I’m not saying I agree or disagree with either’s positions or proposals. That is for you to decide. What I am stating is a factual based retort that has ramifications for all of us because regardless of who wins, the facts are the facts, and it will be from the next victor of the ‘bully pulpit’ that the current Fed. Chair will need to explain why she can – or – why she can’t do ‘X’ when it was they themselves who are the ones that showed the world how money ex nihlo truly works.

This post was published at David Stockmans Contra Corner by Mark St. Cyr ‘ September 8, 2016.

More Indications of Labor Slowing – -Yellen’s Favorite Index Hits The Skids

The Federal Reserve’s Labor Market Conditions Index (LMCI) fell to contraction again in August. After rebounding in July for the first positive reading of 2016, the LMCI dropped to -0.7 in the latest update. As usual, revisions have reshaped the levels of indicated problems throughout the past two years, but overall the trend remains. From this view of the labor market, the economy is surely slowing even if taking two years to suggest by how much.
As I wrote earlier today, I believe that is the natural tension between an economy that ‘wants’ to grow but can’t due to monetary suppression. This is nothing to do with quantitative easing or ‘stimulus’ in broad terms, except that it further shows that no form of central bank policies has had the effect of increasing the money supply to the real economy.
What Friedman actually meant, and what we can observe now, is that low interest rates indicate tight monetary conditions for the real economy. On that score there is no mystery about ‘tightness’ so much that even labor statistics and the seemingly impenetrable services economy are now openly displaying it. You look at the TED spread and see that ‘something’ changed in August last year; you look at the ISM Non-manufacturing PMI and sure enough, same thing. Where eurodollar decay had before cut a great deal off global economic growth (the depression), the ‘rising dollar’ variant of it seems to be that much worse in that it is pushing the real economy into active deceleration and contraction (some places already alarmingly deep).

This post was published at David Stockmans Contra Corner on September 7, 2016.

Mission Creep – How the Fed will Justify Maintaining its Excessive Balance Sheet

FOMC have changed their normalizing strategy several times and we now see the contours of yet another shift. The Federal Reserve was supposed to reduce its elevated balance sheet before moving interest higher as it would be impossible to increase the fed funds rate in the old fashioned way when the market was saturated with trillions of dollars in excess reserves. When it finally dawned on the FOMC that selling large quantities of TSY and MBS into the market was probably not a very bright idea, they created the O/N RRP to be able to raise rates without draining the financial system of reserves beforehand. Still, the thought of selling, or more accurately not rolling over, trillions worth of government debt, when SWF’s and foreign FX managers are desperate to raise USD is still not something the FOMC even want to contemplate.
So a case needs to be built for the FOMC to justify maintaining its bloated balance sheet indefinitely; conveniently enough ex-FOMC member Jeremy Stein with his Harvard colleagues Robin Greenwood and Samuel Hanson did just that in a paper called ‘The Federal Reserve’s Balance Sheet as a Financial-Stability Tool’ presented at the Jackson Hole Symposium.
Their argument is simple. When the FOMC starts to raise rates, demand for positive yielding cash-like instruments will increase, thus re-enabling financial institutions to use the commercial paper market to fund themselves cheaply and enjoy a positive carry on their maturity transformation. As our chart below shows, commercial paper outstanding, with extremely short duration, grew exponentially prior to the GFC as financial institutions used the wholesale market to fund illiquid and longer dated positions.

This post was published at David Stockmans Contra Corner by Eugen Von Bohm-Bawerk ‘ September 3, 2016.

Heaps Of Lies

Since truth hardly matters anymore, we all get numb to the day-to-day barrage of falsities and outright lies that come at us every day. But something clicked today and caused me to simply stop and take it all in.
And even “take it all in” is an exaggeration on my part. I couldn’t take it all in if I wanted to. I simply paused this morning as I perused the headlines and let the lies and corruption wash over me for a moment.
Let’s start with The Federal Reserve. Not only is this organization named in a way that is intentionally trying to deceive you, their mission of sparking inflation through the endless creation of new fiat cash (upon which their owners can charge interest) is theft on a grand scale. All of your hard work, in the form of your accumulated savings, is being constantly devalued and stolen by these criminal bankers. But no, you’re told that The Fed is this omnipotent, altruistic and benevolent organization that works for the American people. Wrong! They work for their owners, first and foremost. And who are their owners? Their member Banks.
And then there’s this notion that The Fed must now raise the Fed Funds rate because “the economy is robust and strong”. Really? Last I checked, Q1 GDP came in at just 1.1% and the just-revised estimate of Q2 GDP is also just 1.1%. Even today, productivity has declined again while US manufacturing levels have collapsed to economic contraction levels.
Again, you’re being lied to. A Fed Funds rate hike by The Fed is NOT designed to benefit you or the general economy. Instead, it’s designed to benefit The Fed’s member Banks. How and why is hard to know but, like every other Fed decision from TARP to QE, the moves the FOMC and Fed make are ALL designed with The Banks’ best interests at heart, not yours. Is this what you are told on CNBS or BBG? Of course not. Instead, just lies and deception in order to pump an agenda.

This post was published at TF Metals Report on September 1, 2016.

Bill Gross says negative interest rates are nothing but liabilities

Call bond-market veteran Bill Gross a ‘broken watch.’ He doesn’t care.
His gripe about negative interest rates and a flood of debt, which he considers a risk, not a fix, for a global economy that’s still limping out of the financial crisis, is challenged daily by resilient demand for the bonds he’s bearish on. But even if being ‘right’ eventually is a hard sell right now, he’s not backing down, Gross said in his latest monthly commentary.
‘The problem with Cassandras, such as Gross and Jim Grant and Stanley Druckenmiller, among a host of others, is that we/they can be compared to a broken watch that is right twice a day but wrong for the other 1,438 minutes,’ Gross wrote. ‘But believe me: This watch is ticking because of high global debt and out-of-date monetary/fiscal policies that hurt rather than heal real economies.’
Germany, Switzerland, France, Spain and Japan are among countries that have negative yields on government-issued debt. Their hope is that cheap, even free, borrowing raises inflation and revives asset prices that can filter through economies; they argue extreme policies have been needed. Gross and others have argued that rates, including those at the Federal Reserve, at near zero or below won’t create sustainable economic growth and actually undermine capitalism.

This post was published at David Stockmans Contra Corner By RACHEL KONING BEALS, Marketwatch ‘ September 1, 2016.

War On Cash: Discontinue Professor Rogoff’s Stupid Commentary, Not the $100 Bill

In a recent opinion piece for the Wall Street Journal, Harvard economist Kenneth Rogoff declared that there’s ‘little debate among law-enforcement agencies that paper currency, especially large notes such as the $100 bill, facilitates crime.’ Rogoff would like to discontinue the $100 in order to – try not to laugh – reduce crime.
Can the eminent economist really be so nave as to presume that the disappearance of a piece of paper would prove effective at making the U. S. (and the world) more honest and safe? Apparently he does, while lightly acknowledging what economists refer to as the ‘substitution effect.’ If $100 Federal Reserve notes prove scarce, then similar euro and Pound bills will do the job, as will 10,000 yen notes. If $100 bills simplify big criminal transactions, wouldn’t little gold coins simplify crime even more?
While Rogoff is fully focused on the problems presented by $100 bills for government, he ignores how problematic it is that our government is so large and intrusive as to want to take away something that we the people (law abiding and not) find convenient. Did it ever occur to Rogoff that maybe there are too many laws and too many crimes as opposed to too many $100 bills? To you the reader, if cocaine and heroin are legalized tomorrow, will you become users?
As opposed to wanting to abolish the $100 bill in order to increase our individual freedoms, Rogoff seeks an end to the $100 to increase the size and scope of government. A principle reason Rogoff is in favor of abolishing the C-note is because ‘Cash is also deeply implicated in tax evasion, which costs the federal government some $500 billion a year in revenue.’ Lower federal revenues are apparently bad in the eyes of Rogoff and his ilk, but they’re surely good for the rest of us. Ignored by Rogoff, or worse, understood by the Keynesian thinker, is that a dollar collected by the IRS is an extra dollar for Congress to spend.

This post was published at David Stockmans Contra Corner on August 30, 2016.

Trump is Goldman’s Golden Goose

The reporting of Susanne Craig of the New York Times and David Cay Johnston, who won a Pulitzer Prize for his reporting when he was with that paper, and has recently published The Making of Donald Trump, combine to allow us to draw a critical insight about Trump and Goldman Sachs. From Susanne Craig, we learn:
[A]n office building on Avenue of the Americas in Manhattan, of which Mr. Trump is part owner, carries a $950 million loan. Among the lenders: the Bank of China, one of the largest banks in a country that Mr. Trump has railed against as an economic foe of the United States, and Goldman Sachs, a financial institution he has said controls Hillary Clinton, the Democratic nominee, after it paid her $675,000 in speaking fees.
Goldman Sachs is infamous for two things, both of them relevant here. Its senior managers encourage the most incestuous of relationships between the government and the firm. The revolving door is an exclusive penthouse elevator that rockets Goldman executives back and forth from positions of immense power in government and the firm. As the then President of the Federal Reserve Bank of Kansas City (now, Deputy Chair of the FDIC) told a small group of us several years ago: ‘For the last 20 years we’ve been holding an auction to fill the position of U. S. Treasury Secretary – and of late Goldman Sachs has been winning.’
Second, Goldman is infamous for ripping off its clients. It is the place that structured deals like Abacus to deceive and rip off its customers. Matt Taibbi aptly dubbed them the Vampire Squid.

This post was published at Wall Street Examiner by William Black ‘ August 23, 2016.


The Federal Reserve bank is well-known for its secrecy. But in an attempt to reach out to the people it claims to serve, the monolithic bank just created a Facebook page . . . and it’s probably really regretting that decision.
Unlike Twitter, where the Fed decides which comments to reply to – and therefore which show up publicly on its page – its public Facebook page, launched Thursday morning, is not as restrictive. In fact, the Board of Governors of the Federal Reserve System page has been relentlessly trolled since it went up.
The Federal Reserve bank was originally crafted largely by bankers, including JPMorgan Chase & Co. It has never been fully audited since the Federal Reserve Act was passed in 1913, yet it enjoys an omnipresent status in the United States. As the Fed’s Facebook page points out, ‘Over the years, its role in banking and the economy has expanded.’
People have protested the banking institution since it was created, but it remains one of the best-guarded, most opaque institutions in the country.
A congressionally mandated audit by the Government Accountability Office in 2011 found the Fed had loaned out $16 trillion dollars to big banks around the world. As noted by Senator Bernie Sanders at the time, ‘This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.’
Sanders’s press release highlighted a more specific conflict of interest:

This post was published at The Daily Sheeple on AUGUST 23, 2016.