Jan 20th, 2020: Three Links, Three Tweets

By: Tho Bishop

Three Links

While we’re assured by the financial press that the Fed is full of Very Serious People, it’s alarming how clueless some members of the Fed seem to be about the current operations of the central bank. The latest example Neel Kashkari’s take that the injections into the repo market have no impact on equity pricing.

EconomicPolicyJournal: Stunning: Minneapolis Fed President Put Out Tweet Indicating He Doesn’t Know How the Fed Creates Money

Will Not-QE Soon Become QE4? Danielle DiMartino Booth thinks so. “The Fed will tell you it’s all technical in nature,” she said. “In their last minutes, they said that if they had to move into [longer] coupons, they would. So the table has been set.”

MarketWatch: The Federal Reserve is stuck in quantitative-easing hell

A decade of massive credit expansion in China has manifested in a variety of bubbles within the country, particularly in real estate. While the fallout from 2008 wasn’t nearly as severe in the country as it was in the west, it severely shook confidence in China’s stock market – which has never recovered pre-crisis times. Instead, Chinese consumers have focused on land and financial products offered by shadow banks. Now, the consequences of China’s debt saturated economy are starting to make the middle class anxious.

South China Morning Post: China’s middle class frets the ‘good times’ are over amid sliding house prices, stagnant wages

Three Tweets

#SouthKorea’s president thinks spending $51.2 bn on infrastructure will revive SK’s floundering #economy. The last decade of failed #govt spending programs suggest otherwise. #FreeMarkets, not white elephant infrastructure, will turn the economy around.https://t.co/XPI1LZwHuM

— Prof. Steve Hanke (@steve_hanke) January 20, 2020

Until the Fed did 3 quick rate cuts over the summer further intervening into “markets” to uninvert the yield curve. https://t.co/0gAXyqJ7lk

— Jason Burack (@JasonEBurack) January 17, 2020

Fed bugs are people with stubborn and unyielding belief in the abilities of central bankers, even in the face of history and current evidence to the contrary.

— Jeff Deist (@jeffdeist) December 30, 2019

Powered by WPeMatico