Fed chief Powell’s actions prodding Trump to change Fed’s structure

The Federal Reserve is believed to be raising rates on this coming Wednesday by a quarter point putting the Fed Funds Rate at 2.5%.

Fed chair Jay Powell, while saying the Fed is data dependent for future rate changes, seems to have walked back a bit his projected three raises in 2019.

However if the Fed is data dependent as Powell has said, the Dec. 19 decision should be to stand still if you are solely working off the dual mandate of the Fed to be guarding against inflation, while creating full employment.

The Fed’s biggest concern when it came to inflation was asset bubble inflation as in the stock market rise since President Trump’s election. If you look at wages, producer prices and consumer prices there is little in the pipeline suggesting that inflation will be above the targeted 2% annual growth that the Fed targets.

While Powell was Trump’s pick to lead the Fed after Janet Yellen stepped down, I believe Treasury Secretary Mnuchin was the driving force behind the pick and Trump knew little of Powell’s thoughts on economic and monetary policies.

The President’s tweets on Fed moves and speeches tells us that Powell & Co have a differing agenda than The White House when it comes to the economy.

Powell’s four rate hikes since March have certainly taken the wind out of the sails of stocks and house prices. These are the assets of the American people and Trump sees Powell as undermining his economic growth prospects for these people.

After a decade of near-zero rates, where Americans were battered by no interest on savings and low-to-nil wage gains, the Fed needs to get its foot off of the brakes and that is what the president is saying.

Only through growth — and that’s what the tax cut was meant to spur — can the US move forward on reducing its $21 trillion debt level. If you give a tax cut and then cut the economy at its knees with tightening credit, then you set yourself up for a deflation/stagflation scenario that could arrive closer to the 2020 election cycle.

This is not lost on President Trump. And this is why we are hearing about structural change coming to the Federal Reserve in 2019.


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There’s a second Clinton Foundation federal probe

Plenty of new drops on Wednesday have people scrambling. The biggest news I believe that could be the most concerning to the DC swamp is the Clinton Foundation probe(s).

News comes as Federal Attorney John Huber is to give House panel an update on his investigation into Clinton Foundation wrongdoing. Well now there appears to be a second secret probe opened by ex-Attorney General Jeff Sessions at the same time.

Perhaps one in civil proceeding looking at tax and charitable mess, while the second investigation is focusing on criminal charges. That would seem to be a natural bifurcation of duties.

The second appointment was kept quiet in order to work behind the scenes to argument Huber’s public case. Not sure how this tacit is more successful, since the secret panel and the Huber’s public panel have not generated any news of their respective finding as yet.

I’ll be the first to admit that I am not well versed in these federal probes, but it appears Huber will drop some startling evidence in his hearing on Thursday. Will there be an announcement of indictments? Not sure on that.

Those charges may be brought after the new year, when the March 1, 2018 Executive Order “2018 Amendments to the Manual for Courts-Martial, United States” goes into effect, although at this time these probes appear to be civil, I believe there will be criminal charges for conspiring with enemies of the US.


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Stock market gyrations, Google’s China fire

What is going on in the stock market?

The volatility and price swings of shares just does not ring true to this veteran market watcher. The year-end market moves this year defy logic. As many economic reports — while always questionable, but the only barometer used by the Street — show things are still better than the numbers from the Obama era economic malaise, they seem to fall on deaf ears.

This type of volatility has to be coming from institutional investors since the gyrations are so violent and sudden. I don’t think the incoming Democratic-controlled House is the root, since markets prefer divided government as they’re less likely to get any meaningful regulations through Congress.

Fed chairman Jay Powell needs to step aside and let his previous rate hike work through the economy and see where we stand in six months. Since there are words to that effect the Fed will more likely raise rates next week and that is baked into the market, but the language in the press conference will have greater impact.

One theory I believe is that the black box computer trading programs may have reach a critical level where the algorithms control far more shares than human decision makers, which gives you markets swing back and forth with more than 500 points in less than an hour on very little news.

Many market pros have their own interpretations, which are rooted in the past, but I think this market is being honed to towards more non-traditional sources of “news”. While veteran market makers would here rumors that could create price swings but there was discretion. Now these algorithms may take “rumors” or fake news with more seriously without discernment.


Does anyone else find it odd that hours after Google CEO Sundar Pichai testified in front of the House Judiciary Committee on a host of issues including the search giant developing a censored product for China a fire develops in its offices there.

Breaking: Fire breaks out in Raycom Info Tech Park, which houses Google’s office, in the Zhongguancun technology hub in Beijing, China.

https://twitter.com/PMBreakingNews/status/1072705722746585088📁

Was the order given to cover tracks on the program called Dragonfly, which was a government-approved search engine for the Chinese market, which is heavily censored by Google for access to the market.

On Tuesday Pichai was questioned numerous times during his testimony of censored search. Each time he answered with a variation of “We have no plans at this time to launch in China.”

Perhaps that comment is now true since the fire has pushed back the launch of any product.

 

 

More evidence Trump is fed up with Federal Reserve

As the US came off the eight years of Federal Reserve controlled economy during the Obama administration’s anemic efforts to grow out of the Great Recession.

In January 2016, I wrote the most viewed post in the history of this blog. It touched on what I called  The Greatest Transfer of Wealth in History.

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Perhaps the Yellow Vest protests will lead to an EU Winter

The Paris “Yellow Vest” riots over the weekend has been going on for a month now with numbers growing.

The media blackout here continues with the narrative being the French do not like rising “fuel taxes”.

President Trump over the weekend exposed the bigger issue of what the French people are dealing with over President Emmanuel Macron’s extremist climate change policies.

Very sad day & night in Paris. Maybe it’s time to end the ridiculous and extremely expensive Paris Agreement and return money back to the people in the form of lower taxes? The U.S. was way ahead of the curve on that and the only major country where emissions went down last year! 

Macron, who chastised Trump at the Armistice Day celebration last month on the president’s nationalistic policies like tariffs, is facing his citizens wrath for taking the globalist view that the only way to change people’s behavior is to punish them through higher taxes.
The former Rothschild & Cie banker is being branded as an elitist who is taxing the poorer French people to fund his globalist agenda. While Macron backed off from raising fuel taxes for a few months, a reportedly, 136,000 protesters hit the streets of Paris this weekend to show the government that this is about his wider agenda.
Parisian shopkeepers, who rely on holiday shoppers, will be decimated as the French capital was on lockdown the past two weekends. The daytime peaceful protests are being followed up at night by marauding bands of younger unemployed men from just outside Paris looting storefronts as police forces are stretched to handle the daytime protests.
The Macron government, not facing election until 2022, however it has a difficult decision to make. Will it be able to lead this uber-globalist agenda such as the Paris Climate Accord and watch the namesake city burn or will the French people prevail to wrestle back control of their government?
This could be the start of the EU Winter, which like the Arab Spring some years ago, gave the people back some nationalistic control.