“Some people without brains do an awful lot of talking, don’t you think?” – L. Frank Baum, The Wizard of Oz.
So, today, a report from the Federal Reserve to Congress, from the brainless to the brain dead.
Federal Reserve policymakers see an economy that may be past full employment, financial market prices that are high and overall growth that continues to gather steam.
Those conditions remain appropriate for further interest rate increases, though inflation pressures remain fairly muted for now, according to a key report to Congress the central bank released Friday.
The monetary policy report provided a wide-ranging view of conditions for new Chairman Jerome Powell, who took the Fed’s reins earlier this month. Powell will present the report along with remarks during congressional testimony Tuesday.
“The FOMC expects that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will remain strong,” the report said, echoing language from prior Federal Open Market Committee meetings.
Translation: We still have absolutely no idea what we’re doing but things seem well regardless.
I sincerely hope this Friday afternoon finds you well.
The first video interview for FP, with my old friend and investor Russell Wilder. Watch for insights on what moves the markets and how it affects your goals.
Remember to SUBSCRIBE on YT!
The whole article:
Janet Yellen issued her final official interview as Fed Chairman: Lil High...
Janet Yellen ended her long career at the Federal Reserve with concerns over how high the stock market has surged under her watch.
The S&P 500 has soared 315 percent since the March 2009 bear market lows and about 53 percent since she took over as chair of the central bank in 2004.
Yellen said in an interview with CBS News that market valuations are the source of some concern as she headed into private life following a 14-year Fed career, the last four as the chair. She spoke as the market finally took a breather from what has been a breathtaking move higher, with the Dow industrials falling 666 points Friday.
“Well, I don’t want to say too high. But I do want to say high,” she said. “Price/earnings ratios are near the high end of their historical ranges.”
In addition to elevated equity prices, Yellen also said commercial real estate is “quite high” compared with rents.
Irrational exuberance is what it’s called. Hype and craziness not backed by reality. Stocks too damned high!
Aunt Yellen speaks. 666. Not liking where this is going…
Says she’ll now devote more time to her monkeys… Freaking News.
But not to worry – another wise, Creature-approved acolyte of economic deception will be along Monday… The interests of the bankers are in good hands. And, it’s really them that matter the most, right?
One of those days, friends, one of those days. After some six months of success in self-medicating a minor mechanical problem, I wisely decided to check the old covert bug out vehicle into automotive convalescence. Prayers if you will, donations should you have them (only $500 will feed a starving Jeep…).
Anyway, I was all set to shoot a Hawaiian preppers video for FP. Tomorrow! And more collected and so forth – will post here.
I leave you with fond thoughts of the US Debt Clock.
I consult these numbers from time to time. They sing a song, tell a story, for those willing to listen. Give them a try tonight.
Dobry vecer, priatelia.
One side says the modern US economy is built upon little more than debt and threat of force.
Another side says things are fine, the Fed knows what its doing, and everything is supported by real value.
(Other sides say things too.)
Of the first two sides, which might be worried about the following headline?
“If China stops buying Treasuries, the market could suffer,” strategists at Jefferies said. “Treasury financing needs are going to rise significantly in 2018 and beyond relative to recent history, so Treasury is going to be looking for as many sources of demand as they can find.”
The news worried markets.
Treasury prices fell, boosting yields. The dollar also dropped against most currencies and gold rose. U.S. equities declined.
Hmmm. How can this be? Things are fine. They know what they’re doing.
One might almost think the debt does matter after all.
Even The Goldman Sachs sees clouds forming:
A prolonged bull market across stocks, bonds and credit has left a measure of average valuation at the highest since 1900, a condition that at some point is going to translate into pain for investors, according to Goldman Sachs Group Inc.
“It has seldom been the case that equities, bonds and credit have been similarly expensive at the same time, only in the Roaring ’20s and the Golden ’50s,” Goldman Sachs International strategists including Christian Mueller-Glissman wrote in a note this week. “All good things must come to an end” and “there will be a bear market, eventually” they said.
As central banks cut back their quantitative easing, pushing up the premiums investors demand to hold longer-dated bonds, returns are “likely to be lower across assets” over the medium term, the analysts said. A second, less likely, scenario would involve “fast pain.” Stock and bond valuations would both get hit, with the mix depending on whether the trigger involved a negative growth shock, or a growth shock alongside an inflation pick-up.
I suppose fast pain beats slow and tortuous.
In related news, there was a large cigar:
A VERY large cigar.
Bill Gates, Jeff Bezos, and Warren Buffett have a combined wealth greater than the poorest half of all Americans. Three men with more money than 160 million other people in the same country.
The three richest people in the US – Bill Gates, Jeff Bezos and Warren Buffett – own as much wealth as the bottom half of the US population, or 160 million people.
Analysis of the wealth of America’s richest people found that Gates, Bezos and Buffett were sitting on a combined $248.5bn (£190bn) fortune. The Institute for Policy Studies said the growing gap between rich and poor had created a “moral crisis”.
In a report, the Billionaire Bonanza, the thinktank said Donald Trump’s tax change proposals would “exacerbate existing wealth disparities” as 80% of tax benefits would end up going to the wealthiest 1% of households.
“Wealth inequality is on the rise,” said Chuck Collins, an economist and co-author of the report. “Now is the time for actions that reduce inequality, not tax cuts for the very wealthy.”
The study found that the billionaires included in Forbes magazine’s list of the 400 richest people in the US were worth a combined $2.68tn – more than the gross domestic product (GDP) of the UK.
“Our wealthiest 400 now have more wealth combined than the bottom 64% of the US population, an estimated 80m households or 204 million people,” the report says. “That’s more people than the population of Canada and Mexico combined.”
The report says the “billionaire class” continues to “pull apart from the rest of us” at the fastest rate ever recorded. “We have not witnessed such extreme levels of concentrated wealth and power since the first gilded age a century ago.”
David McNew/Getty/The Guardian.
This isn’t a piece on class envy – at least not mine is not. Who knows what the trained squirrels at the Guardian were up to. If this money were earned honestly, then there would be no problem, regardless of any “inequality”, real or fancied.
Some, many of whom are hoarse from howling at the moon last night, might propose to seize all of this wealth and redistribute it. Unlike Scrooge McDuck, these three real characters do not have $250 Billion in gold coins and cash in the basement of some mega mansion. It’s (almost all of it) invested in their companies and earning more money while created goods, jobs, and services. It’s not liquid. Taking it would collapse a sizable portion of the economy. Killing the goose … all for $1,500 per poorer half class member. Once…
Stick to the helpless screaming, SJWs.
The rest of you know I am (mostly) concerned with the truth. So, what is the truth behind Gates, Bezos, and Buffett?
Bill Gates became filthy rich by selling software. My perspective dictates the products are second-rate at best, a bill of goods bought from a high-class carny. Yet they remain extremely popular. The people get what they think they want. Gates gets richer. Okay.
Bezos runs Amazon. Some say this business is a modern monopoly, responsible for killing all the bookstores of the world. I have a vested interest here. Periodically Amazon sends me money for book sales. The checks are small but they do come. Thus, in my view, Saint Bezos and his beautiful creation can do no wrong. I wish them success as this directly benefits me. If you don’t like that, then you probably don’t read and, therefore, don’t really have a dog in the fight. Bugger off.
Buffett is held forth as the ultimate investor. Making and creating Billion$ while humbly living in the same small house for 50 years, the paragon of Wall Street virtue. That’s part of the truth.
The other part involves his direct manipulation of the economy. Watch the following video for a funny analysis of how this works (a cartoon, no less – for the people!):
First, for the ardent pendatrists, consider the cloud cover in the cartoon. How is that consistent with the digital trees??? What say your television shows?
Now. If you happen to consider the substance, then know this: what Buffet and a few others do is not technically illegal. It should be as should be the whole central banking scheme. However, since we’re past the days of the law, why not make money (take money) from the existing corrupt system?
That’s where the problem lies. And howling at the moon, beating the bongos, and voting will not fix it.
This must be just like bankin’ in paradise
And I don’t send the taxes home.
-My apologies to David Lee Roth…
The second largest data leak in history, the Paradise Papers, shows how the truly wealthy avoid paying taxes.
The world’s biggest businesses, heads of state and global figures in politics, entertainment and sport who have sheltered their wealth in secretive tax havens are being revealed this week in a major new investigation into Britain’s offshore empires.
The details come from a leak of 13.4m files that expose the global environments in which tax abuses can thrive – and the complex and seemingly artificial ways the wealthiest corporations can legally protect their wealth.
The material, which has come from two offshore service providers and the company registries of 19 tax havens, was obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with partners including the Guardian, the BBC and the New York Times.
The project has been called the Paradise Papers. It reveals:
Millions of pounds from the Queen’s private estate has been invested in a Cayman Islands fund – and some of her money went to a retailer accused of exploiting poor families and vulnerable people.
Extensive offshore dealings by Donald Trump’s cabinet members, advisers and donors, including substantial payments from a firm co-owned by Vladimir Putin’s son-in-law to the shipping group of the US commerce secretary, Wilbur Ross.
How Twitter and Facebook received hundreds of millions of dollars in investments that can be traced back to Russian state financial institutions.
The tax-avoiding Cayman Islands trust managed by the Canadian prime minister Justin Trudeau’s chief moneyman.
A previously unknown $450m offshore trust that has sheltered the wealth of Lord Ashcroft.
It’s how Apple hides $252 Billion!!!! from the tax man.
They reveal how Apple sidestepped a 2013 crackdown on its controversial Irish tax practices by actively shopping around for a tax haven.
It then moved the firm holding most of its untaxed offshore cash, now $252bn, to the Channel Island of Jersey.
Apple said the new structure had not lowered its taxes.
It said it remained the world’s largest taxpayer, paying about $35bn (£26bn) in corporation tax over the past three years, that it had followed the law and its changes “did not reduce our tax payments in any country”.
One assumes that these elites and giant organizations earned the money, most of it. It’s theirs. Wanting to keep as much as possible is understandable: 1) it’s theirs, and 2) they can use the money to grow the economy. Otherwise, if taxed, the money gets spent on subsidies to ag. companies, bombing brown people, and compensating bankers for the most important kind of nothing.
The hypocrisy (and shock) comes in when one realizes these are usually the same types that rig the system for their own benefit, leaving the rest of us to pay the bills. And our paying isn’t enough. They lecture us. Regulate us. Rule us.
Carlin, Carlin, Carlin, Carlin: “It’s a Big Club. And You ain’t in it! You and I are not in the Big Club.”
I foresee this changing little, if anything. Heck, forget I brought it up. And God help whoever brought this to light. The last such intrepid reporter was car-bombed.
A less Christie-fied Jersey. BBC/Getty.
Jerome Powell has been nominated to replace Janet Yellen at the Federal Reserve helm.
President Donald Trump nominated Jerome Powell to run the Federal Reserve once current Chair Janet Yellen’s term expires, in a move widely expected and one unlikely to disturb the roaring stock market.
Trump made the announcement during a Thursday afternoon ceremony in the Rose Garden.
The move follows an extended period of speculation over who would be named to head the central bank, whose aggressive policies have been considered central to a climate of low interest rates, surging job creation and booming asset prices.
“Today is an important milestone on the path to restoring economic opportunity to the American people,” Trump said with Powell standing to his right and the prospective chairman’s family nearby. The president said the Fed requires “strong, sound and steady leadership” and Powell “will provide exactly that type of leadership.”
“He’s strong, he’s committed and he’s smart, and if he is confirmed by the Senate, Jay will put his considerable talents and experience to work leading our nation’s independent central bank,” Trump added.
He’s also been in bed with the Fed and the banks for a generation. This year he echoed the Bernanke’s 2008 banking sentiments (never been stronger [just before implosion]).
Maybe times have changed. Maybe cycles have changed. If not, then we are now overdue for another recession or worse.
It could be he is just what the doctor (not Dr. Paul) ordered. Or, he could be set up as a blame catcher for the inevitable. We’ll find out shortly.