The good news from the market’s perspective could hardly be better.
The Fed meeting Wednesday with no change in rates, but they are taking a little money off the table. While previously, they’d run at a $120-billion a month rate, the latest implementation order says in part: [with my comments in brackets…]
“Effective November 4, 2021, the Federal Open Market Committee directs the Desk to:
- Undertake open market operations as necessary to maintain the federal funds rate in a target range of 0 to 1/4 percent. [Don’t rock the boat.]
- Complete the increase in System Open Market Account (SOMA) holdings of Treasury securities by $80 billion and of agency mortgage-backed securities (MBS) by $40 billion, as indicated in the monthly purchase plans released in mid-October. [No change from the $120-billion a month, lol -g]
- Increase the SOMA holdings of Treasury securities by $70 billion and of agency MBS by $35 billion, during the monthly purchase period beginning in mid-November. [This is still $105 billion monthly…g]
- Increase the SOMA holdings of Treasury securities by $60 billion and of agency MBS by $30 billion, during the monthly purchase period beginning in mid-December. [So from mid Dec into 2021 we’ll run at $90-million – which – if I’m not mistaken – is still $1.08 trillion of making up money a year…g]
- Increase holdings of Treasury securities and agency MBS by additional amounts as needed to sustain smooth functioning of markets for these securities. [Make up…whatever…]
- Conduct overnight repurchase agreement operations with a minimum bid rate of 0.25 percent and with an aggregate operation limit of $500 billion; the aggregate operation limit can be temporarily increased at the discretion of the Chair. [Read this as “If shit goes south, throw tapering overboard…”]
- Conduct overnight reverse repurchase agreement operations at an offering rate of 0.05 percent and with a per-counterparty limit of $160 billion per day; the per-counterparty limit can be temporarily increased at the discretion of the Chair. [The Big Boyz club is still open for bidness…-g]
- Roll over at auction all principal payments from the Federal Reserve’s holdings of Treasury securities and reinvest all principal payments from the Federal Reserve’s holdings of agency debt and agency MBS in agency MBS. [See how they don’t give a clue as to the amounts involved here? You need your Fed Report Decoder Ring and B-school Merit Badge for this one. Point seems to be principle from Treasuries (all those bonds they’ve been buying) will be used to keep MBS from imploding…g]
- Allow modest deviations from stated amounts for purchases and reinvestments, if needed for operational reasons. [Another easy out if shit blows up…essentially, do what you need to and “modesty” will be defined after the fact if necessary…]
- Engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve’s agency MBS transactions.” [Keep the craps game going…]
Welcome to Moral Hazard
Morning’s like this, I ponder the Big Questions of Life (BQoL). Like: “Which is more dangerous: testosterone of money borrowed from a bankster?”
Let’s think about moral hazard for a minute. The Central Bank is not classically supposed to regulate by setting interest rates in the general economy. Just adjust rates. Nowhere does it say they can effectively OWN America. But, as you can see, this is precisely what has happened. The Federal debt goes UP and (magic!) so does the Fed balance sheet. By jiggering all kinds of activities, the Fed runs America, plain and simple.
See, it works like this: If you own a home – free and clear – and you sell it for some easy round number – like a million bucks. What happened? The effective money supply went up by a million dollars. You – like a banker – just created “money.”
This is the Fed’s problem in a nutshell: People are making up money at every turn and calling themselves rich. Doesn’t matter if you’re carrying a contract on a property sale, collateralizing mortgage debt and then borrowing against those future payments…or even playing the derivatives game (betting on the bets kind of thing)…America’s addicted to money. And at some point we don’t want to be around for when it all blows up. Yes, crypto, too, is all made up money.
Let’s Compound $1
One dollar compounded by 10% monthly grows in Months 100 to $11,388.93. 8.33 years by simply earning 10% per month.
At month 200? 16.7 years? One stinking dollar swells to $172,641,160.42
Month 300? That SINGLE compounding dollar is a mind-bending pile of $2,162,819,005,114.43 dollars.
Month 400? World will be printing like crazy – all because of $1 given to a compounding Bankster. Who now owes you $29,804,970,270,682,300.00. Round off: $30 quadrillion the following month. All done with a single dollar, 10 percent monthly over 33.41 years. About half of an economic long wave cycle.
The Fed will have been around about 1,284 months come late December,
Job Cuts Still Low, but Up
As should be obvious, a ton of people left the workforce due to CV-19. And since we now live in a socialist republic (here, have a mandate), people are figuring if Trump and Joe can pass out cash a few times, why not all the time? Given the answer (however wrong) why bother working?
International Trade: Gap Crap
We warned you a week or two back that the ADVANCE data said we were going to hit a wall. With the Trade Deficit up in the advance data 9.2% for the month. Not the kind of thing you want to have happen, because it means we are making ever less and importing always more.
Want to see and improvement? Keep looking. Because this is today’s reality:
The Global Supply Chain is broken. The reasons China didn’t go to the G20 Climate Joke was simple: They account for the majority of the world’s coal used and the G20 is smart enough (though barely) to understand that slapping any regs on China would collapse the Globalist House of Cards.
The Productivity report from Labor is also out: Of course, fewer workers will mean soaring productivity…at least so-went the hype…until this just dropped:
“Nonfarm business sector labor productivity decreased 5.0 percent in the third quarter of 2021, the U.S. Bureau of Labor Statistics reported today, as output increased 1.7 percent and hours worked increased 7.0 percent. This is the lowest rate of quarterly productivity growth since the second quarter of 1981, when the measure decreased 5.1 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the third quarter of 2020 to the third quarter of 2021, nonfarm
business sector labor productivity decreased 0.5 percent. The four-quarter rate is the lowest rate since the third quarter of 2011, when the measure also declined 0.5 percent.”
None of which augers well for jobs which continue slogging along as 2017 levels despite another million or two illegal immigrants thanks to the Biden administrations law-breaking open borders policies.
So when you read happy-talk like October jobs report: America is getting back to work, realize people may be going back to work, but they aren’t doing as much when they get there. Sheesh.
After these real crappy economic measures, the happy talk still had the Dow even and S&P up 7. Must not have a fentanyl shortage in NYC.
Democrats and Brick Walls
The demagogue party can (or at least should) see a brick wall ahead in 2024. As always, though, they will argue over whether they should tap the brakes on stupidity, or just drive through the wall.
On the pedal to the metal side: Democrats insist they NEED to get Biden’s spending plans passed to ‘have something real’ to run on. Which to us looks like “Let’s spend what we don’t have, to fund things we can’t deliver, to people who already know we’re full of shit…” Pedal to it.
You know who the “raging Cajun” is, right? While we’re inclined to disagree with him on….well, everything….even a broken clock gets things right now and then. As in James Carville blames ‘stupid wokeness’ for Democratic losses.
He might want to teach a remedial demo class on poll reading. And cite Poll: Americans Overwhelmingly Oppose Biden’s Spending Agenda.
So keep an eye on the wall – let’s avoid brakes and talk the future of America into the wall some more…
The headline UK authorizes Merck/Ridgeback Biotherapeutics’ antiviral molnupiravir to treat mild-to-moderate Covid-19 has us wondering “‘Zis like an ivermectin, kinda thing?”
Who? What Vice President Harris will do in Paris next week. Shop? Eat?
Why is everyone crazy? World Protests | SpringerLink New book. Download the summary pdf.
Computationally useful out of CBS-62 in Detroit: The How-To: Is Your Computer Screen Really Aging You Or Is Blue-Light Skin Care A Scam? We Put Them To The Ultimate Test. Computing is much nicer if you just turn on the night light option and knock back the blues by leaning red… Say, maybe this is making people nuts, too: Too much blue light?
ATR: Post Notice Hell
With our move to a new server – and changes in one of our internal content management services – our daily delivery of an email has blown-up. And this time, the problem is…well, complicated.
All started last week when I moved from a “regular” server from our hosting provider to a super-duper “five times faster” one. Yes, it was faster, but occasionally, something on the server side wouldn’t work right. So I went back to slower but more reliable tools.
Then I noticed (and readers told me) “I’m not getting my daily email notice…”
These were auto-generated by a service called MailChimp.com which looks at my RSS feed (which you can too, look here). The MailChimp system says that RSS feed isn’t valid…but while some RSS validators agree (which might make it a Yoast SEO plugin problem) others say it’s a fine site map. Among these, Google Search Console says it’s fine, validates, and we have over 4,200 posts indexed.
Answers are not simple on this one: MailChimp used to be a simple-to-use platform. But now. getting a simple trouble-shooting task done, seems to involve a “customer experience map.” (When we used to hand-code this site, it was a simple flow chart held in the coder’s head. Now, it’s choicing for children.)
Needless to say, this is excruciating. Yoast can say Google’s the litmus test. MailChimp can point at the W3C validation service. Ye gads.
There are a number or other ways to skin this cat, but picking the best and getting it done? Well, there’s time involved.
But that’s what’s going on…
The arrival of fall is assuredly here. For Zeus the Cat has started to come indoors at night.
With the arrival of fall, I’m back on noodles – something I tried to give up over the summer. Exceptions were made for spaghetti and the odd Stroganoff. Now? Back to the old-time favorites: Rose Brand Chinese egg noodles with oyster sauce and chicken broth is good. A big bowl of cold somen noodles with mirin, dashi soup base, low-sodium soy sauce, and a 1/2 tablespoon of ginger juice is also excellent.
Hot weather is not generally noodle weather (except for the cold Japanese somen which pairs with yakitori chicken nicely.)
High of only 62F is ahead and then 38 tonight. Cold front dumped rain and left. Which means a coming ShopTalk Sunday discussion will have to involve moving 3D printers into heated spaces.
Never stops, does it? Keep waiting for those “nothing to do years” of retirement to show up. So far, no sign of ’em.
Hell, I’m writing up plans now to retire from retirement!
Write when you get rich,