Monday, September 12, 2016


Jamie Dimond got in the act today on the subject of the discount rate.  "Sure, raise it.  Why not?  What's a quarter point going to do."

Jamie is right of course but he is also of the view that higher rates wouldn't hurt his bank's bottom line which is also probably true as long as the long end of the curve movers in tandem.  Problem is that has not happened lately but we should find out.

Anyway, Jamie started a conversation because it is generally believed that the CEO of J.P. Morgan has--or should have--some juice.  Not so fast there my friend.  Wasn't too long later that Lael Brainard, followed by the Presidents of the Atlanta and the Minneapolis Fed expressed their collective view that there was no real urgency to do anything right now.  Who has the stroke?  At the close the DOW was up 239 points.  Nice try at sanity, Jamie, but this is all politics now and the Fed's biggest Pol, Ms. Brainard, just scorched your idea.  Try again after the election.

This is becoming a joke except that the Fed is the only central bank out there that understands what game is afoot.  I doubt if they believe at this stage that this rate environment is going to do anything to stimulate the economy as opposed to the ECB and Mr Carney and the Bank of Japan, but they know for sure that if they move, the stock markets collapses and while the market is in no way a sound determinative as to the state of the economy, people take it as such and that is no good at all for an Obama third term.   For all of his ranting, Mr. Trump got it exactly right when he said that today.

And so we go on, bumping from meeting to meeting; from stentorian pronouncements to stentorian pronouncement; from rubbish to a garbage fill.  But at least football both Over Here and Over There is in full swing.  A retreat into sanity for those of us who have to deal with this stuff. I have more but I think I shall retreat to back into observation mode.


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