You had to know this was coming…
POWELL: 75 BPS INCREASES NOT SOMETHING CONSIDERING
— *Walter Bloomberg (@DeItaone) May 4, 2022
IOR was adjusted to 0.9% with the policy rate increase yesterday …. if they soon did 2 increases of 0.75% each that would put IOR at 2.4% and 2.4% on the $6T of balances they owe the support rate on would create a current liability of $144B annual and they currently only achieve about $110B of annual gross revenues…. They would become insolvent…
Therefore can’t happen scientifically….
Meanwhile Art Degree monetarist inflationista morons are still going all around the place saying “Fed is behind the curve! Fed is behind the curve!”… as if the Fed has any ability to increase the support rate any faster…
What most of this is about is the story tellers go out to try and get the outcome they want without having to do anything. To manipulate the expectations fairy like they manipulate the free market tooth fairy.
ReplyDeleteThey do the same with taxes. The true believers have to be appeased. So what is a politician to do? How can they square the circle?
Well the approach is to announce tax rises across the board to ‘bring down the deficit’ and ‘plug the gap in the finances’ - the usual rhetoric. However, to give people time to adjust, those taxes are to be delayed for several months.
The intent is to lay down a threat that taxes will rise, which satisfies those who want to ‘pay off the debt’ (aka confiscate people’s savings), but also adjust expectations so that spending is brought forward to avoid the effects of the tax rises.
In the late 1980s delaying the cancellation of double MIRAS (removing a tax relief is a tax rise) by six months helped trigger the Lawson Boom. It seems that the UK chancellor is hoping that the same effect can be used to drag the UK out of a post-Covid slump.
And if it doesn’t happen, then the proposed tax rises can be cancelled or delayed “due to prevailing economic conditions”. Even if it does the tax rises can be canceled “due to the unexpected recovery in the financial position”
As a political play it is a win-win.
As Neil explains here.......
https://new-wayland.com/blog/planning_for_tax_rises/
Drahgi was the exact same using the exact same strategy. What did Drahgi do ?
He tricked the world’s portfolio managers into selling euro by doing things that they think are inflationary, that they think are expansionary, things that cause a currency to go down, and those were negative interest rates and quantitative easing.
He played them like a fiddle and manipulated the expectations fairy.
All the world’s Western-educated who went to The University of Chicago and Stanford and the London School of Economics.They all believe that pumping up the money supply through quantitative easing and negative rates makes the currency to go down and it causes inflation.
He used fear and frightened portfolio managers around the world into selling their euros.
Fiscal policy, monetary policy doesn't matter they all use the same strategy to manipulate their fairies. Art has nothing to do with it. Apart from the art of bull.The gold bugs on the right are the ready made useful idiots who are the story tellers.
“ Art has nothing to do with it. ”
ReplyDeleteYo, It’s the main problem… ie academic methodology…
In short if all finance and economic students are trained/ brainwashed in a certain way. They can easily be manipulated.
ReplyDeleteJust ask Mike.
How he traded on the floor of the exchanges with that education. Compared with how he trades now using the knowledge of MMT.
In the beginning he was a useful idiot. The difference between now and then is like the difference between night and day.
You learn on the job. By speaking with people who know how it works.
Another thing Derek is there are very significant technical differences between the operating practices of the Fed and your BOE…
ReplyDeleteIn your favor…
Mike went to Penn they are one of a few that award Science Degrees.. this is very rare in the US academe of Economics…
ReplyDeleteProbably why he’s a contrarian… never really fit in with his crowd..,
Mike even brought out zombie trading
ReplyDeleteWhere you front run the zombies.
Same shit different day.
That's all that is happening here story telling to manipulate the zombies.
Mike is contrarian because he learned on the job.
ReplyDeleteAsk him or watch the dozen of videos he has made talking about the mistakes he made on the floor at the beginning because of his training.
His learning courses are full of stories about it.
The ones who understand it have been front running the zombies for 100's of years. Before the United States was created.
ReplyDeleteWhen I first moved to Glasgow I was playing 5 asides and got to know this Indian guy who was at Glasgow university.
ReplyDeleteOver a beer he told me his family were absolutely loaded and made their money by making and supplying construction sacks. The huge sacks that bricks and other stuff are delivered to construction sites in.
His family and other businesses families in Calcutta would meet up regularly and share their profit and loss figures before they were announced to the markets. Buy and sell each other's stock accordingly.
He told me Indians learned that from the British years ago.
Robert P Balan has been front running the zombies since 2018 and made $ millions.
ReplyDelete2021 Annual Performance: 2971.16%.
No 1 on seeking alpha using a front running strategy. Off of the back of the fairy tales told by the gold bugs.
The Hedge fund he worked for all knew how it worked.
"Over a beer" and the guy admits to collusion?
ReplyDeleteMust be mighty good ale :)