Tag Archives: Federal Reserve

Confirmation Friday!

06 Friday Mar 2020

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Yesterday, I quipped: “Like a deadly virus, but to infect everything and everyone. The sorcerors couldn’t stand being away:” I’m not the only one drawing the correlation; Zerohedge noticed too.

The coronavirus is now exposing a far more deadly disease: Namely, the poisonous brew of easy money, cheap debt, sweeping financialization and unbridled speculation that has been injected into the American economy by the Fed and Washington politicians.

…

So both a renewed financial and economic crisis and an abrupt change of course lie dead ahead. The 30-year era of False Prosperity is over.

Accordingly, the Turbulent Twenties have begun. This will be a decade when the chickens come home to roost. It will be a time when the cans of delay and denial may no longer be kicked down the road to tomorrow.

To the contrary, the 2020s will mark an era when today’s economic and political fantasies are crushed by America’s accumulated due bills.

Bubbles will be burst. Speculators will get carried out on their shields. Easy money wealth will evaporate. Fiscal trauma will ensue. The national joy ride will end.

The decade of reckoning that lies ahead is rooted first and foremost in the fecklessly incurred mega-debts of the private and public sectors alike. Together they have soared to the staggering sum of $75 trillion.

That’s 5X more than the $14 trillion outstanding three decades ago.

Even Yahoo! Finance has open eyes: “Liquidity Concerns Build as Key Market Stress Indicator Surges”

Given the massive electronic paper printing of late, is this a crisis of liquidity drying up? Or is it a drought? We may soon find out.

Return of REPO BUCKS!!!

05 Thursday Mar 2020

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Like a deadly virus, but to infect everything and everyone. The sorcerors couldn’t stand being away:

Big banks’ demand for central bank cash remained very strong on Wednesday, leading the Federal Reserve Bank to add a fresh $100 billion to the financial system.

The Fed added the money via what’s called an overnight repurchase agreement operation, or repo. Eligible banks, called primary dealers, sought $111.48 billion from the central bank, exceeding the $100 billion cap the Fed places on overnight repos.

When a $100 BILLION!!! (OVERNIGHT!) falls short.

3,583 Reasons the Fed will Act

28 Friday Feb 2020

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Done deal. They’re going to do something, probably something spectacular if understated (underhanded). The precious GDP, as daily measured by the stock market indexes, must be saved at all costs.

Stocks took another steep dive Friday, deepening a multi-day rout fueled by fears about the coronavirus’ impact on the global economy.

The Dow Jones Industrial Average fell 357 points on Friday, capping a week in which the blue chip index fell 3,583 points or 12.4%. The Dow is down 16.3% from its recent peak on Feb. 12.

The S&P 500 stock index lost 11.5% for the week and is now down 14.6% from the all-time high it reached only last week.

From Repo operations to Sicko tactics. What times! If you’re not a bankster, sorry but you’re on your own. Get one of those trendy masks.

Hey! Maybe we’ll get free masks when we file ourtaxes.

Repo Madness

07 Tuesday Jan 2020

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2020 is off to a rocking great start! That is if you’re a criminal banker. And, the money just flows!!!

… means the Fed just injected a total of $99BN to keep the levitation party going, and confirms that the repo market remains paralyzed.

Worse, any attempts to drain liquidity from the repo market, or generally slow down the shrinkage of the balance sheet, will be met with failure. It is also another indication that the repo market now holds the Fed hostage, with Powell now trapped in not only injecting liquidity via QE4, i.e., the monetization of T-Bills, but continued reliance on repos in the $250BN range.

Of course, should the Fed threaten to pull even a bit more liquidity than the market is comfortable sacrificing, and stocks get it. The flip side too: as long as the Fed keeps growing the balance sheet at a rate of about $100 billion per month, the market meltup will continue.

Best economy ever! As they boasted the other day, it is now virtually recession-proof.*

*”virtually recession-proof” does not preclude the (mathematically certain) proposition of depression or total collapse.

The Wealth Tax We Need (but will Never Get) – from TPC

31 Tuesday Dec 2019

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Taxes…

Wherein Perrin PROPOSES a Tax

I know. I was shocked too. But, it’s a new year (happy 1998!) and we must all change with the times. Everyone can agree that if America needs something, then it’s a privatized college football league. If there’s anything else, then it’s another tax. All the cool politi-critters are a squeaking away about it – like fat stupid rats locked in the cheese factory. If the peeps could be roused from the sofas and the Netflix-Sackler Family comas, then they’d be on-board too. And, this is not an idea that I come to lightly. Careful study of the articles even here at TPC gives credence to the popularity of the phenomenon.

MB lamented both the death and the fiscal failings of The Textile Man: “There’s so many folks out there that bust ass every October & December to make those property tax payments & here he was just not paying them.” Our esteemed editor, just last week, pondered why the home county folks “don’t pay their damned property taxes…” Seriously, you scofflaw slackers! If you don’t turn over your money (and, is it really ever “yours”?), then how can the good Sheriff continue to pay Commy Traig or whomever hundreds of thousands of dollars per year!? Any and all local political corruption depends on your financing. Do your damned jobs!

Da hit the national tax scene hard, heavy, and nobly with his Letter to the 2020 Democratic Nominee: “we still need a wealth tax for the good of us all.” Here, here! You darn tootin’ we do!

I have not spoken with Bess, Kayla, Fred, the Sheriff, or the Sharif about this, but I know for certain they are all in agreement.

Da was right – we need a wealth tax. It’s time for the truly wealthy to pay their fair share. And, truly, who’s wealthier than … The Federal Reserve? Back in October, I replied, in agreement, to Mr. Millsaps heartfelt thoughts as follows: “How about a 100% tax on all Federal Reserve assets, real, fake, and potential? I’ve got an idea…” Well, I do. Here it is…

ALL AT TPC…

Is This the Annual Repo Number???

27 Friday Dec 2019

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I’ve been morbidly interested in the Fed’s latest act of national homicide for whatever reason. It’s been more than difficult to keep track of exactly how much fake money they’ve pumped out. This could be it:

Global stock markets have been on a torrid run in 2019, adding more than $17 trillion in total value, according to Deutsche Bank calculations.

The value of global equities began the year just under $70 trillion but has now surpassed $85 trillion, according to a chart from Deutsche Bank’s Torsten Slok.

The banner year for equities has been helped by easier monetary policy and political developments around the globe.

Central banks around the world have taken a more dovish approach, boosting markets. The Federal Reserve has cut its benchmark interest rate three times this year, and the European Central Bank cut its already negative rates even further.

$17 Trillion in dove shit! Ridiculous, I know. The real number is probably much higher.

But It’s So Convenient

20 Friday Dec 2019

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Get your direct deposit today?

With reports of direct deposits failing to clear still ongoing, Bloomberg reported that the Federal Reserve was investigating “the second significant disruption in 2019 of a payments service administered by the U.S. central bank.”

As we first reported earlier (see below) key transactions – most notably funding via direct deposits – were delayed after ACH – which stands for the Fed’s Automated Clearinghouse System – experienced delays, but it is now up and running.

“The FedACH service, which processes transactions for commercial banks, is currently operating normally after experiencing delays in processing yesterday afternoon and early this morning,” Jean Tate, a spokesman for the Atlanta Fed which hosts the central bank’s Retail Payments Office processing ACH transactions, said in an e-mailed statement, despite reports that some banks bank clients still had not received their monty.

“Some customers experienced delays in receiving confirmations of yesterday’s transactions. Federal Reserve technical staff continue to investigate the root cause of the issue.”

Not to worry! The sorcerors are looking into it. “Monty,” the root cause of all evil…

A Wealth of Taxes

17 Tuesday Dec 2019

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Large corporations, those wily government entities, pay next to no taxes.

About 400 of America’s largest corporations paid an average federal tax rate of about 11% on their profits last year, roughly half the official rate established under President Donald Trump’s 2017 tax law, according to a report released Monday.

The 2017 tax law lowered the U.S. corporate tax rate from 35% to 21%, but in practice large companies often pay far less than that because of deductions, tax breaks and other loopholes.

In the first year of the law, the amount corporations paid in federal taxes on their incomes – their “effective rate” – was 11.3% on average, possibly its lowest level in more than three decades, according to a report by the Institute on Taxation and Economic Policy, a left-leaning think tank.

Yeah, yeah. Whatever. This did get me thinking though. My comrades over at TPC, two of them, have of late been defending taxation with zeal. One promoted the “wealth” tax. That… How about a corporate wealth tax? One aimed primarily at private banking corporations? One in particular. This particular private bank has assets and wealth that must be imputed given the bank’s unique ability to create such out of thin air. I suggest a putative assessment of infinity. The tax could be levied accordingly. Now, since we have no need for infinite money, I think a rate (or number) sufficient to PAY OFF EVERYTHING should do it. One time. No more debt of any kind. And then, abolish said private bank and send its owners packing. Yes?

Voodoo Economic News

17 Tuesday Dec 2019

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Trade. Stock market. Interest rates. BAWK! The sorcerors wave their magic wands and all is well(?).

The trade deals, while not nearly as ambitious as Trump promised, have lessened one of the biggest drags on the U.S. economy: uncertainty. While some industries still face significant tariffs and final details remain in flux, business leaders say at least they know what the situation is likely to be in 2020, offering more clarity than they have had since Trump’s trade war commenced nearly two years ago.

“Tariffs will be much more stable for quite a while,” Larry Kudlow, Trump’s top economic adviser, told The Washington Post. “Some of the obstacles to growth, including the Fed and trade uncertainties, are being removed, and that will have a powerful positive impact on the economy.”

Hold up. Did Kudlow just say they’re removing the Fed???