Category Archives: Federal Reserve

Banking, Budget, Deficit, Federal Reserve, Fiscal policy, Fixed Income, Government, Inflation, Macro, MMT, US Treasury, USA

Fiscal Free Lunch

Posted on by Sean Corrigan
[This is the first of a series of short bulletins called, ‘The Course of the Exchange’, in memory of John Castaing’s widely-read updates, posted in Jonathan’s Coffee House in Change Alley, 300 years ago]

With the latest CBO estimates for the US Federal budget for August just in, we are again in a position to take stock of the scale of the burden which the COVID-19 lockdowns and more general restrictions have imposed upon the nation’s finances. It does not make for happy reading.

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Banking, Central banks, China, Commodities, coronavirus, COVID19, ECB, Equities, Europe, Federal Reserve, Forex, Gold, Government, Inflation, Japan, Macro, Metals, money supply, Revenues, Tech, UK, USA

The Fall Approaches

Posted on by Sean Corrigan

OPEN ACCESS FOR A LIMITED TIME ONLY.
It’s not just the leaves that often turn when the year begins, with gathering pace, to slip towards its chilly end. Markets often do, too.

Given this backdrop, the sell-off in the Nasdaq – in the marvelled-at ‘Growth’ stocks, in the FAANGs, and in Tesla – comes at a moment which is particularly intriguing for reasons which go far beyond whatever coup SoftBank may or may not have attempted and whether those irritating Lockdown Livermores have finally gotten their comeuppance.

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Austrian Theory, Central banks, Economics, Federal Reserve, Fiscal policy, Inflation, Keynesianism, Liberty, Macro, MMT, Money, money supply

MMT Vessels Make The Most Noise

Posted on by Sean Corrigan

As a sort of Keynes-manqué, Stephanie Kelton’s moment in the limelight is being granted her for much the same reason as was that of her more illustrious predecessor: she is telling free-spending politicians what they always want to hear – viz., that their habitual incontinence is statesmanship of the highest order.
With our good professor never missing an opportunity to remind anyone and everyone that her book – a veritable almanac of economic hocus-pocus – tops the non-fiction charts (surely a gross miscategorization if ever there was), we must therefore re-emphasize our view that the REAL peril of Magic Money Tree economics – aka MMT – is what it means for the private sphere in general and the scope for genuine entrepreneurship in particular, NOT whether it causes prices to rise or not. The question is one of liberty, not inflation; real prosperity, not growth.

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Austrian Theory, Central banks, Corporatism, Credit, Economics, Entrepreneur, Federal Reserve, Fiscal policy, Inflation, Intervention, Liberty, Macro, MMT, money supply, Planning, Production, Saving, savings glut, Technocracy

Saturn Devours His Children

Posted on by Sean Corrigan

A recent Wall St Journal article gave vent to a scare-story full of Underconsumptionist claptrap, carried under the catchy headline: “The Coronavirus Savings Glut”. Ironically, and only a day later, the paper ran a second piece entitled “How Coronavirus Upended a Trillion-Dollar Corporate Borrowing Binge and Kicked Off a Wave of Bankruptcies

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Bank of England, Central banks, COVID19, CPI, ECB, Economics, Federal Reserve, Fiscal policy, Government, Inflation, Japan, MMT, Money, Productivity, UK Treasury, US Treasury, Wages

After the Fall of Caffa

Posted on by Sean Corrigan

While politicians anxiously check the shifting weather-vanes of public opinion and scientists squabble over facts as well as interpretations, central banks are resolutely doing what they do best – wildly exceeding their briefs and trying to drown all problems in a flood of newly-created money. As ever, the underconsumptionists worry that a lack of demand will usher in deflation, in spite of all such efforts. Some of us, however, worry more about what it will do to supply. Here, we explain why.

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Austrian Theory, Banking, Central banks, Credit, Cycles, Deflation, Economics, Federal Reserve, Fiscal policy, Inflation, Money, US Treasury

Money v Supply

Posted on by Sean Corrigan

With many commodity prices touching multi-year lows and with mounting fears for real estate valuations and car-lease residuals, numerous commentators seem convinced that ours is now a deflationary future. QE failed to raise CPI by anywhere near what the spin promised, they say, partly because it was ‘unsupported’ by fiscal policy. Therefore, if we don’t get Roosevelt, we’ll get Brüning, they conclude, and, meanwhile, we need the Fed to cut rates below zero, said one prominent pundit on April 5th. We replied:-

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Bonds, Central banks, Commodities, Credit, Equities, Federal Reserve, Hedge Funds, Japan, Primary Dealers, Volatility

Squawk Box: Oil and more

Posted on by Sean Corrigan

Ahead of my remote appearance on CNBC Squawk Box Europe on April 3rd, I prepared a few notes for the guys which I am happy to share here with you. The main topic, ahead of the emergency OPEC meeting which briefly bolstered crude prices that week was, unsurprisingly, oil but we did also discuss the outlook for the wider economy.

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coronavirus, COVID19, Credit, Federal Reserve, Fiscal policy, US Treasury

Throw me a Lifebelt!

Posted on by Sean Corrigan

As governments took ever more drastic action to close markets and confine people to their homes, the question loomed of how to mitigate some of the worst consequences of this self-imposed state of siege. A Twitter thread of March 10th offered up some initial thoughts, here lightly edited.

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Bonds, Central banks, Credit, Federal Reserve, Fixed Income, futures, Hedge Funds, High Yield, Money, Primary Dealers, repo, UK Treasury, Volatility, Yield Curve

Overstretch

Posted on by Sean Corrigan
21
Feb

Markets have paradoxically both been on edge – and in the throes of euphoria – since the repo shock in mid-September, being at the same time alarmed and yet strangely reassured by the Fed’s frantic backpedalling and the $400+ billion boost to its balance sheet which this entailed. Extreme levels of overstretch are everywhere apparent.

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Central banks, Federal Reserve, Fixed Income, High Yield, NFP, Revenues, Volatility, Wages, Yield Curve

Fed’s a-Flutter

Posted on by Sean Corrigan
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