Easy Money
If you have access, Bloomberg’s video interview of Jim Bianco is worth a play: Wall Street Sees ‘Easy Money’ With Yellen at Treasury
Partial Transcript
“Risk markets are celebrating Yellen as Treasury Secretary in a way that suggests she is heading both the Fed and Treasury. They are celebrating ‘easy money’ Treasury Secretary but technically the Treasury Secretary doers not set monetary policy and is not supposed to influence it.”
“Her skill set is well qualified for Federal Reserve Chair. As a diplomat, as a chief negotiator , if that’s what the Biden Administration wants, her skillset is not Christine Lagarde’s skill set when it comes to negotiating things like budgets or sanctions or tariffs. She may grow into the job but it is a big unknown right now.”
“I think all Wall Street sees is easy money and they are happy with the idea, but over the long term there are going to be questions where she fits in that spectrum.”
Great Inflation Debate: When and How Big?
Also see Great Inflation Debate: When and How Big?
In a guest post, Jim Bianco at Bianco Research shares his views on inflation and when the Fed will hike.
Bianco: We have argued the 0.33% low in 10-year yields on March 9 marked the end of the 39-year bull market. Rates should be moving higher, but they are being suppressed via massive QE. At some point we expect the “horse” to tear the post from the ground and start running with higher yields.
I also have comments from bond bull Lacy Hunt on what might get him to change his mind.
Mish
Debt driven Markets were already insanely overvalued before Covid, now in the midst of a out of control pandemic, with undeniable social/economic consequences and NEVER seen before stratospheric debt mountains, asset records are being broken again. Tell me that everything is all right and that the house of cards won t fall apart dramatically any time soon ! Mind you, I am an investor myself, a plain vanilla one, with buy and hold strategies mostly, so I do reap benefits occasionally but my portfolio is still down 2% for the year, my banker says I belong to the lucky ones…. Yet I am worried ,something is VERY, very wrong here ….
Greenspan, Bernake, Yellen and Powell should be remembered as the four horsemen of the apocalypse. The four of them have destroyed the Dollar and the middle class. They continue to blow bigger and bigger bubbles and when they pop, they put it on the American citizen’s credit card and ride off into the sunset with a multimillion-dollar consulting deal. Putting Yellen in charge of the Treasury is the same as putting the Arsonist in charge of fighting fires, she would be a busy lady, QE fires for everyone.
When I first heard about Covid-19, my first thought is that this is going to be the greatest thief of money from the middle class and transferred to the rich. 2008 was a trial run, the powers that be, took the training wheels off and started the money creation. Two things had to be done in order to ensure success, they needed to allocate money for the people in the form of unemployment benefits, crumbs for the little people, $600.00 a week was enough to keep low wage worker quiet, so they wouldn’t revolt when they saw the trillions given away to the corporatist. Next was the PPP for business owners, but more important were the friends with shady businesses that could claim millions by massaging the rules and were allowed to go bankrupt and walk free.
We need term limits, age limits (60 and under if you want to run), Diane Feinstein is 87 years old, no one that old should be making policy for the future generations. She should take all the money she screwed the American people out and ride into the sunset. Republicans, you have your own group of criminals too. Lobbying, known in the real world as bribes are made by guys and girls in suits. Apple cries about how high corporate taxes are in America, but pays no Federal Taxes, yet has no problem spending a half a billion dollars a year “LOBBYING” government, am I the only one who sees a problem with this?
America, where free market capitalism goes to die.
OTB CDC forced by lawsuit to release county-by-country data–some eye-openers here
Seems I’m not happy with Fed leadership under both Democratic and Republican administrations. I’m against dual mandate.
market still below trend growth
The day of reckoning for easy money is coming. Just wait.
My goodness, wasn’t the market supposed to collapse if Biden was elected?
Now we had Trump come out, like the groundhog, celebrating Dow 30,000…
A “sacred” number…
Thanks, Biden!!!
Wall Street is celebrating Yellen’s appointment, aka easy money to infinity and beyond! Biden’s victory is secondary.
So easy to divide and conquer the powerless masses and set them against each other. Hee, hee. Fiddle dee dee
Mish, it seems that you opened up the Community section today for a minute, and instantly you were spammed again. It seems clear that you can’t open it ever again. I’ll make a suggestion: why not have the community section available only to posters who have been a member in good standing for some period of time, say 3 months, and 20 posts, or if that’s not enough, double it.
It’s sad to have to do that, but you have to do what you have to do. Otherwise there will be no community section at all.
Great suggestion – and improvements are underway. But underway might mean “a while”. Platform changes are coming as is a move to Disqus for commenting is one of those things.
Unfortunately, my understanding is there will be no improvements until “all at once happens”.
Not my decision. But I will pass the idea on. It is a very good one. Perhaps this is easy enough to try.
Thanks for your patience.
And president Camacho is yet again celebrating a new stock market high, the (only) kept election promise, never made.
I premise, most of the voters see it as an evil Wall Street vulture feasting on the body economic.
Dystopia has become mainstream, normalcy is an aberration.
Party Hardy folks, we’re going Venezuela.
https://tradingeconomics.com/venezuela/stock-market
Everything seems so rosy. Like we’re finally making progress on ALL fronts SIMULTANEOUSLY.
You just have to think that the Fed and the Treasury are more apt to be “hand-in-glove” cooperative on monetary policy. Powell is on recored for several months now saying more stimulus was going to be needed to get us past COVID…..Yellen, too, has said as much.
I can’t see a Biden-Harris team going toward austerity in the circumstances, which might be about to get much worse, for a few months at least. The Pandora’s Box (helicopter money) has been opened already….and failure to helicopter more is (in the short tun) going to result in a lot of defaults of various kinds before the winter is over.
It there ever has been a time to helicopter, this is it. Just helicopter it further downstream instead of giving 80% of it to the rich this time.
I hope that they have learned the lesson that bailouts for few and austerity for everyone else is a losing proposition. I have my doubts. I believe that they will give us another snowjob. A leopard can’t change its spots and neither can they. They sincerely believe that they have won. I am not talking about the election, I mean the economic and cultural wars.
It’s actually quite shameful that the political class in this country panders so completely to the rich, while pretending to do something for people who are hurting….but you’re right……if they do it any differently, this will be the first time.
It all has to do with corporate capture of the government, huge money in political campaigns, and the sad realization that politicians don’t have to be accountable to regular citizens….just the elite .1% class who sponsor them……nobody else matters.
“How Did You Go Bankrupt?” “Two Ways. Gradually and Then Suddenly.”
That is happening to them. They lost their credibility in finance and economics slowly and then all of a sudden. It is now gone . The same process is happening in the cultural field. Most of them haven’t realised it yet and they still believe that they are looked up to and admired. They are despised.
There’s some real validity to the bankruptcy idea transposed to how the political class believe they are thought of. Same for MSM.
Hoisted by their own petard.
Is the rhetoric of working for the many, not the few, an ‘ism’?
Populism, socialism or communism.
The leaders of the tribe wandered off years ago and didn’t realise they had left the herd behind. Only new leadership out of the abandoned herd can properly address the problems. Bottom up starting with education and values. It will take a while. The status quo doesn’t have the drive to make the necessary changes. Same in the UK. A leader from the herd needed, Trump was never that for the US. Somewhere such a person is waiting, perhaps just a kid right now.
Great comments.
What stimulus? With a Republican Senate, the Senate will reawaken to the horrors of deficits (totally forgotten during the Republican control of the WH) and therefore end of stimulus. Yellon and Powell will get a few crumbs that benefit Republican interests. Keep buying those stocks.
What you say makes sense in the near term. But the 2022 elections are right around the corner. If there is no stimulus now, it will be OBVIOUS who is to blame — McConnell’s obstructionist-nihilist GOP Senate. They’ll get slaughtered in 2022.
And that assumes the GOP wins at least one of the two Georgia seats, even odds at best.
I see McConnell agreeing to $2T in a compromise.
Without stimulus you’ll hear the air escaping out of the stock market bubble, mebbe even the real eastate bubble