tag:blogger.com,1999:blog-6616959642391988608.post3185182307828380871..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Market to Fed: no need to panicScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger17125tag:blogger.com,1999:blog-6616959642391988608.post-52338899511619174282022-07-16T04:31:17.418-07:002022-07-16T04:31:17.418-07:00I've got news for you. We are 6 months into a ...I've got news for you. We are 6 months into a full-employment recession characterized by a drastic fall in living standards. Real GDP and price indexes are disconnected from reality.Charleshttps://www.blogger.com/profile/00607057013050715435noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-19666578212478340172022-07-14T09:07:44.163-07:002022-07-14T09:07:44.163-07:00Thank you!Thank you!EHRhttps://www.blogger.com/profile/07574913749054167481noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-54315819066602284262022-07-13T17:24:16.666-07:002022-07-13T17:24:16.666-07:00@EHR
There are several viewpoints around RRPs (sup...@EHR<br />There are several viewpoints around RRPs (supply and demand issues) but IMO, the most convincing viewpoint involved the unusual degree of 'money' which appeared in the system (QE and commercial banks buying government debt) while the Fed eventually stopped the SLR (liquidity ratio) relaxation rule that had been put in place with Covid, a situation which made banks unable to Carlhttps://www.blogger.com/profile/01792779708580094262noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-49613221922966794092022-07-13T07:21:03.810-07:002022-07-13T07:21:03.810-07:00Intrigued by the comments on RRP and Scott's e...Intrigued by the comments on RRP and Scott's earlier post on IOR. These are very technical concepts out of reach of most readers, like your truly. So in the hope of opening up the discussion to digestible level, I did some research.<br />Seemingly, RRP is a post GFC mechanism to help set a more precise Discount Rate. Assuming the loan is merely overnight, the bank "sells" brieflyEHRhttps://www.blogger.com/profile/07574913749054167481noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-12113688770298900742022-07-13T06:57:28.129-07:002022-07-13T06:57:28.129-07:00Like I said:
The only tool, credit control device,...Like I said:<br />The only tool, credit control device, at the disposal of the monetary authority in a free capitalistic system through which the volume of money can be properly controlled is legal reserves. The FED will obviously, some time in the future, lose control of the money stock.<br />May 8, 2020. 10:38 AMLink<br /><br />Daniel L. Thornton, May 12, 2022 agrees with me:<br />“However, on Salmo Truttahttps://www.blogger.com/profile/13910212017849902362noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-34009830303954673622022-07-12T11:53:48.498-07:002022-07-12T11:53:48.498-07:00I have already heard from many shoppers on Amazon ...I have already heard from many shoppers on Amazon and at local retailers that the "inventory whip" referred to by Zerohedge (and indirectly here at CFB) has begun to show up in retail price data. <br /><br />The question for stock market investors is, has the market begun to look across the valley, or is the FED still so behind the curve that some devastating increases in interest ratescyclingscholarhttps://www.blogger.com/profile/03283855090445490940noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-20356090280826396592022-07-10T12:39:47.728-07:002022-07-10T12:39:47.728-07:00Powell's ultimate objective was the abject cap...Powell's ultimate objective was the abject capitulation to the erroneous Gurley-Shaw thesis.<br /><br />The FED:<br />Raised, then eliminated Reg. Q ceilings<br />turned the nonbanks into banks<br />increased reserve requirement exemption amount and the low reserve tranche<br />40 percent reduction in required reserves<br />payment of interest on IBDDs<br />elimination of reserve requirementsSalmo Truttahttps://www.blogger.com/profile/13910212017849902362noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-21545576940755092792022-07-10T04:09:55.012-07:002022-07-10T04:09:55.012-07:00-On frauds
It appears that peak fraudulent behavio...-On frauds<br />It appears that peak fraudulent behavior is a leading indicator, as to when a cycle turns for the worse, when committed, but is a lagging indicator, when revealed.<br />-On China<br />More comments would be welcomed. The property market is soo important in China's economy so it appears that they (central planners) cannot afford (socially speaking) a downturn. In China, centralCarlhttps://www.blogger.com/profile/01792779708580094262noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-27904137935395228692022-07-09T09:51:07.353-07:002022-07-09T09:51:07.353-07:00Hi Carl: I enjoy reading your thoughtful comments...Hi Carl: I enjoy reading your thoughtful comments here to Scott's analyses. IMO, reliance on central bankers is hardly un-American-- what would be the alternative, sir? A return to the gold standard? That would plunge millions of people around the world into greater poverty almost overnight-- how does that serve America's interests? <br /><br />Thankful for this forum-- would also Chris_in_NJhttps://www.blogger.com/profile/01882159035633041622noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-32951231958538391412022-07-09T05:19:53.991-07:002022-07-09T05:19:53.991-07:00"The larger story is that a strong dollar mea..."The larger story is that a strong dollar means the world's demand for dollars is very strong, and that is helping to soak up all the extra M2 that was printed in prior years... "<br />This is an interesting statement which does not resist rational analysis though.<br /><br />USD move from the US to foreign lands with negative trade balance but, apart from some adjustments of Carlhttps://www.blogger.com/profile/01792779708580094262noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-82587410187645052862022-07-08T10:15:19.842-07:002022-07-08T10:15:19.842-07:00For the first time ever I find myself uncomfortabl...For the first time ever I find myself uncomfortable with Scott’s assessment.<br /><br />Sure M2 growth has slowed, but what if it has been too high for much longer than the Covid years, and seems all this created a mountain of debt that is now ready to bite us back, in particular with inflation with no end in sight, and this time no growing China to bail us out with cheap goods and surpluses. <brJean-Pierre Deslandeshttps://www.blogger.com/profile/02089882925568071398noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-44746745777658004302022-07-08T07:53:22.045-07:002022-07-08T07:53:22.045-07:00The number of unemployed people per job opening is...The number of unemployed people per job opening is at an all time low.<br /><br />https://www.bls.gov/charts/job-openings-and-labor-turnover/unemp-per-job-opening.htm<br /><br />So, while a rise in the ratio is typically called a recession, it will be different to have it rise from such a low level.<br /><br />Closing that Gap will help ease inflation pressure, but it will take a while too.Andrewhttps://www.blogger.com/profile/01390035459036380103noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-44580832702552037462022-07-08T04:47:56.972-07:002022-07-08T04:47:56.972-07:00The Fed shouldn't but of course they WILL rais...The Fed shouldn't but of course they WILL raise rates too much...stevehttps://www.blogger.com/profile/07387986994469835875noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-16837804736338515882022-07-07T22:42:37.625-07:002022-07-07T22:42:37.625-07:00Excellent review of the situation, IMHO.
I hope t...Excellent review of the situation, IMHO.<br /><br />I hope the Fed does not overtighten. Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-41986219352353202992022-07-07T09:39:35.168-07:002022-07-07T09:39:35.168-07:00"The larger story is that a strong dollar mea...<i> "The larger story is that a strong dollar means the world's demand for dollars is very strong, and that is helping to soak up all the extra M2 that was printed in prior years... " </i><br /><br />Very helpful. And bon voyage to Italy! If you catch-up with Mario Draghi while there, don't believe a single thing that cat has to say. :-D Chris_in_NJhttps://www.blogger.com/profile/01882159035633041622noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-47304990704584457132022-07-07T07:14:24.451-07:002022-07-07T07:14:24.451-07:00Hi Scott,
Great post as always. I think its a bit...Hi Scott,<br /><br />Great post as always. I think its a bit premature to claim victory on inflation. China is the wildcard here. They have not fully reopened. Once they re-open, what happens to commodities? I would guess, commodities will go up. Once China fully re-opens and commodities go down, then I think we can claim victory on inflation. Cheers. alpacinohttps://www.blogger.com/profile/07265086870669315096noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-2528832534946917152022-07-06T15:40:15.210-07:002022-07-06T15:40:15.210-07:00The U.S. $ is rising because the E-$ is contractin...The U.S. $ is rising because the E-$ is contracting. Eliminating required reserves makes the domestic $ more competitive. <br /><br />Contrary to the FED's accountants, RRPs drain both reserves and the money stock. They should be a subtraction from both the FED balance sheet's assets and liabilities - not just a swap in liabilities (regardless of term limits as the operations are Salmo Truttahttps://www.blogger.com/profile/13910212017849902362noreply@blogger.com