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Normality
Despite presiding over a massive expansion of the same experiment in ultra-accommodative monetary policy that was mercilessly derided by some pundits, market participants and armchair economists prior to his tenure as Chair, I think it's fair to say that Jerome Powell has a better reputation among critics than his predecessors.
If that's even a semblance of accurate, it's not difficult to explain. While it's exceedingly difficult to feel sorry for someone who's both healthy (as far I know anywa
Can treasury outspend the fed? If our elected “take advantage” of monetary policy to better the lives of disadvantaged Americans in absolute terms will this not make them even poorer than “the gods” in relative terms?
My kids are old enough to understand monetary policy, barely, and what you described has been in place as they were born (2006). To them, it’s more than normal. So, yeah, it’s now the norm.
Twelve years, that has to be a world record time when adjusted for scope.
Classic recency bias.
The political/bureaucrat class has managed to convince some people that destroying price discovery, suppressing volatility and pushing investors into a single global concave trade is “the only way”.
Vol and risk can’t be destroyed, only transformed or transferred.
Symptoms of this situation are becoming more and more frequent (feb2018, oct/dec 2018, april 2020, etc…) and, in classic black swan fashion, the one event that truly pushes CB intervention into its logical demise will come as unexpected and profound as ever.
Talk about “recency bias.” Take a look at a timeline of life on Earth. Then plot humanity’s existence on it. Then plot the existence of “markets.” The idea that there are “rules” and certain immutable truths is patent nonsense. None of this stuff actually exists. It’s just make-believe lines on your screen. Wall Street folk don’t understand this. At all. There are no natural laws that govern any of this. Bonds aren’t rocks. Stocks aren’t trees. We can change the rules anytime we want, because all of this stuff only exists in our imagination. If we disappear tomorrow, so does all of this stuff that we pretend is real.
How’s that for “profound”?
If I have understood you correctly from your ‘body of writings’ – as long as we (humans) continue to believe, we are “good”. Once something comes along to replace where we put our beliefs- things can be shaken up/turned upside down.
I hopefully have another 40 years of cognitive function- and at this point in time, I am not worried about complete/absolute disruption. A slow, methodical change(s), should be able to be absorbed into our core beliefs.
I believe in SPY and today reinforced my belief.
You have perfectly expressed my beliefs and more pointedly than I could. How is it possible to make sense of non-sense?
Unfortunately, this fed and congressional joint effort allows us to ignore things like the seizing up of overnight markets in 2019. The essential plumbing of the global economy is not well enough understood or maintained. I was taught that when a large or unusual event occurs and no one talks about it, that means it is not priced into the markets and is very important. I also see almost no one in the US paying attention to the eurodollar markets and what they can tell us. Similarly, we are still in denial about the role of leverage in all financial markets.
well written effort per usual … undoubtedly Powell was one of the happiest people alive to see Trump vacate office .. I believe Powell will want another term health allowing … just a traditional two cents thought, not in a two cents wealth tax advocacy…
Yes, chicken and steak, but perhaps more like veganism vs. meat-eating. One seems foreign and unnatural, yet it works (even better?) nevertheless.