Get the best daily market and macroeconomic commentary anywhere for less than $7 per month.
Already have an account? log in
Albert Edwards: ‘There’s Too Much Linear Thinking Out There!’
It won't surprise you to learn that SocGen's Albert Edwards isn't particularly optimistic about the Fed's capacity to normalize policy without collapsing various Jenga towers on the way to a dovish about-face that'll be every bit as embarrassing as it was inevitable.
"For all the Fed's newfound bravado and bluster, we know by now that any attempt to 'normalize' interest rates will end in elephantine pivots, pirouettes and ignominy," he wrote, in a note dated Thursday.
Edwards touched on a numb
I’m guessing no one ever called Albert the life of the party.
“there’s quite a bit to worry about… a water crisis, “the unfolding collapse in gulf stream currents and its dire consequences on food production,” – Oh good. Jerome is aware of the slowing down of the AMOC and it’s effect on global climate in general and rainfall in particular.
https://www.technologyreview.com/2021/12/14/1041321/climate-change-ocean-atlantic-circulation/
Where can someone buy some catastrophic hedging? Asking for a friend named Jerome.
Other than agreeing with Albert on his thesis two thoughts come to mind.. One ..you can run but you can’t hide… and the second is that all trails will lead to a discussion of MMT
Powell and the Fed governors and bank presidents are working hard to talk dirty about 4 hikes and runoff so they may need fewer and any runoff will be in the future. Personally think the Fed should get out of the balance sheet game completely. Go back to raising and lowering rates. Keep the balance sheet the same amount. Why risk killing liquidity when the dealer community no longer puts as much capital acting as a buffer to stabilize the financial markets – the worst side effect of the Volker rule.
H-Man, Henry Kaufman suggests we need 50 bps in March from the Fed. Not a bad idea?