The Federal Reserve meeting minutes that came out yesterday were no surprise. Well, except for one thing: If size matters, the Fed meetings are getting to be a very BIG deal. I might be off on my count, but it looks like 75-people attended the meeting.
Other than the usual FedSpeak like…
“Many participants judged that the inflation data received over the intermeeting period had been about in line with their expectations that inflation would move temporarily further below the Committee’s goal, largely reflecting declines in energy prices and lower prices of non-oil imports. They continued to expect that inflation would move up toward the Committee’s 2 percent objective over the medium term as the effects of these transitory factors waned and conditions in the labor market improved further.”
But this gets us focused on this morning’s first neuron collisions: Which way are rates going to go – and what will it mean? We assume that rates going up in the medium term means five-years or so, although definitions matter hugely.
I’ve always believe short-term was as long as a person could hold their breath. Long-term (and this is according to OECD data) marriages typically last 8-years in the USA anymore. So I guess four-years would be medium term; halfway between breathing and divorcing.
Here’s the problem with the Fed’s happy-speak: The Swiss have just started to sell 10-year bonds at a negative interest rate. That’s right – you have to pay the Swiss to take your money and hold it for 10-years
Part of the reason for the Swiss skating on the interest problem is the CHF is one of the few currencies out there that was (by law) 40% backed by gold until 2000. Ah, you’re thinking, those clever Helvetics! They seem to be adhering to the belief that a currency that holds something (other than ink, like the US currency) is a good idea.
Not so in America, which has more or less completely given up on “solid money” because it’s much more expedient to follow the dual mandate (full employment, stable prices) than actually have money of reliable value.
It’s for this reason that you may look forward to tomorrow’s report because we will be looking at the next Fed H.6 money stock report because it has been showing increases of M1 in the 15%+ range while M2 is going up at around 8.9% (basis: 3-months annualized).
That’s why Ures truly will be sitting on the edge of the recliner by late afternoon about 4:30 PM Eastern when the next confessional is expected.
Near as I can figure it, the disparity between the Swiss honest deflation scenario and the 75-fedsters thinking inflation will be along, is because the fedsters will be printing money in nearly Weimar-like wheelbarrow loads to put a thumb on the scales.
Even if you are managing 38-cents of personal savings, it’s worth reading Dimon’s annual report starting on page 30 where he takes up with…
“In the rest of this section, we will look at how
the table is set – what is going on that is the
same or different than in the past. Later in
this section, we will speculate on what might
happen differently if we enter a new crisis.”
And that’s where he gets into it. I won’t spoil the fun.
The market is still in ho-hum mode. We know that the Fed is printing hard enough (here, have some free money) to keep the appearance of normalcy intact. But we’re also mindful of the cost – the continued hollowing out of core value of America’s money.
Not that markets care much: The futures were about flat when I looked, but like Dimon commends in his shareholder letter: Think strategy in the long term but manage like an operator.
Whether you think Dimon’s writing is as polished as the annual gems issued by Warren Buffett (they’re so good that Berkshire has a whole archive of them over here) is a matter of taste.
And since I don’t have any (taste), I read ‘em both.
Market futures are about flat, Bitcoins are down to 242, Baltic Dry Index still dying at 580, and retail sales came in this morning OK, but people aren’t going wild with spending…
If you look closely, you’ll see diplomacy crashing on the rocks as Iran is now saying no nuclear deal unless sanctions are lifted.
Of course, the whole point of negotiations and sanctions is to force a good faith agreement and I’ve made clear what my expectations are. All in favor of giving peace a chance, but there’s hope through June 30…
Ending sanctions without an iron-clad agreement would be about the stupidest thing imaginable, so we can look forward to announcement of it shortly, deal or not.
Candidate-Bashing on the Left
Not to put too much of a point on it, but did you catch the very strong anti-Paul tone to the Washington Post’s coverage of Rand Paul’s first day in?
Or, how about the New Republic piece on Carly Fiorina where she’s labeled Palin 2.0?
To be sure, both have clay feet, but can someone explain to me why Fiorina (who actually landed a real CEO job at HP) and gets bounced on scandalous leaks is getting such a different ride in print that Hillary the Server Wiper?
The evidence (and this is only data, mind you) suggests an agenda…but only to those with an open mind who don’t care for either party…and that happens to include me…seem to be able to see it.
Red Dragon Rising, IV
In case you slept through the contrail/missile firing off Los Angeles a few years back, NORTHCOM is now publicly saying that indeed, China’s three nuclear missile packing submarines are a concern.
Oh wait! That was just a contrail, right?
But this makes my Christmas gift for Kennedy much simpler. Just one book ought to do it: The Demon-Haunted World: Science as a Candle in the Dark.
Where We’re Going
Oh, yeah – let’s see how national healthcare government style is working out in Kneeler Land, shall we? Prescriptions for toothpaste and sun cremes, is it?
Just think where we can go with corporations controlling government instead of the other way around.
…may be granted after all. Word that a terminally ill man is about to get a head transplant means there is hope Ures truly can be turned around at some point.
I’ve long suspected this kind of surgery existed – and is widely practiced in Washington – where they seem to be installing empties.
Land of Stupid Consumers
You know Society is in trouble when ComputerWorld runs an article like “Which smartwatch sucks the LEAST: Apple Watch, Android Wear, Pebble, or Samsung Gear?”
One of the joys of being a reprobate is seeing through the smoke: Watches are to tell you what time it is. I can find that on my phone, in the lower right corner on any of the 8 computer screens in my office, the 4 screens in the house (2 laptops, media server, music studio).
And if that doesn’t work, the clock on the kitchen stove works, as does the one of the dash of the car, the one in the truck.
If all else fails, the clocks on the kitchen stove and microwave work, along with the spawn of Satan on the bed stand that aggravates me on a daily basis.
Look: A $500 watch simply tells me that a person is either mentally impaired or has more money than sense, or both.
But since everything is a business model…