The Market Ticker
Commentary on The Capital Markets- Category [Federal Reserve]
Logging in or registering will improve your experience here
Main Navigation
Full-Text Search & Archives

Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.

NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.

The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

The Market Ticker content may be sent unmodified to lawmakers via print or electronic means or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media, to republish full articles, or for any commercial use (which includes any site where advertising is displayed.)

Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.

Considering sending spam? Read this first.

Right along with him on the pedestal will be Donald J. Trump who has repeatedly "urged" The Fed to further pump asset bubbles and insane "monetary policy" that has not and cannot work.

The claim is that there has been "no -- or very little -- inflation."  That's only true if you exclude everything that has ramped in price, such as health insurance, car insurance, car prices, various assets and more.

But if you accept that "there has been no inflation" then the Fed policy has been an abject failure since it was supposed to produce inflation.

Never mind the complete lie that The Fed "leads" the market where it wants to go.  It does no such thing.  In virtually every case the Fed Funds rate follows the 3-month Treasury Bill rate.  You can verify this for yourself by going to Fred and graphing it yourself; in virtually all cases the bond market moves first and The Fed follows.

 

So yes, right now the 3 Month Bill is saying the Fed has to cut.  The market is forcing The Fed to do so.  Not Trump.

The Fed is not "leading" the market or "setting" rates; it is following what the market has already done.  The data says that in fact The Fed is powerless to "set rates" in that if it could then it could drag the market around by the nose and yet it has NEVER done so.

What The Fed can do is "extraordinary things", and it further can project abilities it does not have, thereby leading people to do things they would not otherwise do.  The correct word for that is lying.

The cause of our imbalances in the nation is not with The Fed; it lies with Congress that spends in deficit.  This is monetary inflation, directly and immediately, and is responsible for all of the issues with political and monetary imbalances.  It is why we have had trillions of "buybacks" with borrowed money at real negative interest rates.  It is why health care costs go up double-digits and so does health insurance.  It is why a car costs $35,000 instead of $18,000.  It is why houses are both expensive and scarce.  It is why entrepreneurship is dying -- you and I cannot borrow at negative interest rates (we have personal guarantees backed by assets demanded of us) but large businesses can and do and as a result they can and do bury anyone who tries to produce a "better" anything that they're interested in.

It is why firms like Google, Twitter and Facebook can play their censorship games; you can't access below-zero real rates to build a competing service while they can and do and thus step on you without having to actually risk any of their own money or pay a real positive rate of interest to "borrow" whatever resource they desire.

That, along with rank corruption, is why Amazon didn't pay sales taxes despite having distribution centers all over the nation for nearly a decade, folded in every case when threatened with a lawsuit or indictment and didn't fight a single one of those battles, yet never paid a penny in back taxes, penalties or interest.  This conferred a roughly 6% margin advantage to them -- utterly insurmountable to any competitor.  If you tried any of that you'd be indicted in an afternoon and chains would be on your business' front door the next morning.  Literally hundreds of thousands of smaller firms and millions of employees have lost everything as a result of these scams.

It is why your wages in real terms have gone down over the last 20 years.  It is why, when all is said and done, 99.9% of the American population gets financially gang-raped every single year.

And yet that same 99.9% of America sits on its ass and listens to the braying of so-called "experts" who blatantly lie even though the facts as to what comes first and what follows next are incontrovertible and visible to anyone who cares to look while exactly nobody challenges them and, given that said nonsense is responsible for impoverishing and even killing huge numbers of people you have to wonder why there is not a gallows on every damned street corner including every corner in Silicon Valley and dozens more aren't being erected right now on the National Mall.

The sad part of it is that the strategy these people are employing will fail because mathematically it must, and when it does the lack of diligence and demand from Americans that this crap stop and those who have run it be deposed is going to be directly responsible for millions of deaths -- right here in the United States.  Our nation will fiscally fail and collapse, the clock is ticking and there is not much time left.

View this entry with comments (opens new window)
 



The Fed has claimed that this is a "liquidity crisis."

Really Ben? Then perhaps you can explain this?

Note that this is an intentional drain of "slosh", or liquidity, from the banking system. $125 billion in the last four days drained?

You wouldn't be trying to intentionally cause a bank failure or two to bolster your call for the $700 billion "bailout" plan, or perhaps intentionally lock the short-term credit markets, would you Ben?

If the market has a liquidity crisis, why would you be intentionally draining reserves from the banking system? Don't you think you ought to explain that to Congress?

View this entry with comments (opens new window)