No Vision
100 Basis Points and Perhaps QE
The Wall Street Journal comments Trump Calls for a Big Fed Rate Cut, Again Criticizes Central Bank Chairman.
While the president has blamed the state of the economy on the Fed pushing interest rates too high last year, many in business and at the Fed say Mr. Trump’s own trade policies have triggered market jitters and slowed business investment.
White House and campaign aides acknowledge privately that a recession would threaten Mr. Trump’s 2020 re-election campaign, which has made a booming economy a central selling point. On Tuesday, the White House has arranged a call in which National Economic Council Director Larry Kudlow is expected to reassure state and local officials about the state of the economy.
Asked in an interview on Fox News about possible economic alarm bells, White House counselor Kellyanne Conway on Monday played down the chance of a slowdown.
“It’s nice to have the mainstream media finally covering the economy, but they only cover it when they can use Sesame [Street’s] Grover word of the day, ‘recession,’ ” she said.
2011 Flashback
https://twitter.com/Hipster_Trader/status/1163477017435750400
“No Recession in Sight”: Translating Trump and Kudlow
Today’s Trumpian Tweets fit right in with my precious post “No Recession in Sight”: Translating Trump and Kudlow.
I doubt it, but perhaps a huge cut would buy a three-month recession delay.
That may or may not be enough time to help Trump in the 2020 election.
Mike “Mish” Shedlock
If a lower dollar is good for everybody (US and the rest of the World), why stop at 100 basis points, why not make it go to par with the Japanese yen? Then everything would be fantastic.
Economy ,at least what little is left of the private sector collapsed a decade ago,only thing that has grown in 10 YEARS is………GOVERMENT! And with the vast majority receiving a check from govt ,a subsidy from govt,a govt contract,govt handout,govt loan,govt this,govt that el presidente is right……..only thing left on the collapse carousel is….wait for it……if you said big govt ,you are correct!
The best economy in the universe, got it.
If it wasn’t for accumulation of debt up the wazoo, which necessitates ever lower interest rates to keep the economy from imploding, we would be in a deep shite. And the downward spiral keeps turning. When it stops and it will, basic food will be at a premium.
Really enjoyed the Jon Stewart show. Sad that a comedian had to be the only one hoo bothered to peek behind the curtain. My favorite segment – bar none – was when Stewart would queue up a video of some politician saying one thing … and then follow it with another video of same politician saying the exact opposite.
BTW, we will be in a full blown recession come April of 2020. This will, needless to say, change the dynamic. Even with low interest rates, the problems cannot be solved with more debt. 90% of GDP was debt induced according to latest NYFed numbers. Expect the unexpected after low growth is done.
Politics and the presumption of power…It is hard for me to see Powell right now ,having to reduce the funds rate at all. We’ve been fortunate to have a healthy economy with low unemployment and inflation, relative to other developed nations now strongly venturing into negative yield territory. We, on the other hand, had been raising interest rates, beginning to work down the balance sheet, and now have reduced the funds rate 25 basis points and advancing the balance sheet draw-down cessation by two months.
Is a recession coming here? Right now we’ve got a bifurcated economy with manufacturing/production (11 percent of GDP) flagging and the much larger goods and services sector (circa 60 percent) still in the positive mode. Sure, we’ve seen Germany with a recent negative GDP posting following a manufacturing (20 percent of GDP) drag with goods and services area finally also keeling over. Are we going to follow? Who knows? It’s up to the consumer who is still buying.
With $23 TRILLION in debt and $75 TRILLION in unfunded mandates, they cannot wait to implement MMT. The only way “forward” at this point (if you could call it that) is to print, print, print, and use some fancy sounding name to describe it. Trump is just the messenger.
In reality, the only way forward is to NOT print. But rather to render printing impossible. And then, to default. Anything else, is just more of the same backward slippinng.
You can always count on Americans to do the right thing – after they’ve tried everything else.
Winston Churchill
Read more at https://www.brainyquote.com/quotes/winston_churchill_135259
There is very little printing going on. They are just entries on a spreadsheet and money is created out of thin air. The credit system is bigger than ever. Credit is not money.
The only reason credit is being extended to zombies and deadbeats, is that everyone tacitly “knows” that ultimately, it will be exchanged for printed money. Otherwise, as the dumb indoctrinati have been told to tremble in fear over, the “syyyysteeem will colaaaapse..”
It is just exchanged for electronic money. As the system relies on credit and electronic money more, it just turns into a system of electronic exchange, which is more and more opaque. The lines between credit and electronic money are getting more blurred. I work for a company right now with Series A investment from a large Japanese company. Our CEO said the check from them for a licensing deal deposited last week. But this is literally just an electronic transfer payment from one bank to another. Who really knows if its credit or money at the source. It likely was extended as credit from Bank of Japan to the intermediate lender to us.
Trump really needs Negative interest rate, for treasuries and for mortgages, to avoid a recession before the election.
If the economy is strong then why is a rate cut needed ? Anyone…anyone know the answer ? Something something D O O economics…>V O O D O O ecnomics <
Let’s use MMT to buy Greenland.
Gag order on Federal Reserve Bank Presidents a few days ago and now President Trump calling for 100 bps cut and more QE. I imagine something is going to blow.
Looking for the (by) October Surprise.
Doubt it will be the surprise he wants.