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Collateral 'Cloning'
26 april 2021 · 1 uur 2 min
PART 01: Government stimulus seems to work sometimes (e.g. US recessions after WW2). Other times it clearly fails: 1970s USSR, 1980s S. America and Africa, 1990s Japan, and USA post-2008. Presidents Bush (ECA 2008), Obama (ARRA 2009) and Trump (TCJA 2017) tried and failed. Will Biden be any different? Lees meer
PART 02: When public debt rises to around 90% of GDP economic growth falls by 1% each year. A review of Carmen Reinhart and Kenneth Rogoff's study and a look at global debt levels in 2008, 2011 and 2020.
PART 03: US Treasury Securities are the financial system's best collateral. But quantitative easing pulls Treasuries out of the system! In response market participants are 'forced' to repledge the SAME security more and more and more and more and more and more (and more and more and more and more and more and more and more and more and more and more and more and more and more and more)!
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The motion picture event of the summer: (Con)Tango & Cash. When an international smuggling ring uses the local commodity exchange to send gold into backwardation, two macroeconomists take matters into their own hands... and onto the spot market.Starring Travis 'the President' Kimmel as Contango, "You can take delivery of lead -- punk."
And Steven 'the Monarch' Van Metre as Cash, "You know how I promised to let you close out that trade?"
"Yeah man, you did Cash! You did promise!"
"I lied."
With Grant Williams as the polite British guy, “Well chaps, you put the mockers on, didn’t you?”
This motion picture will never be rated. Available only on-demand at Real Vision.
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Twitter: https://twitter.com/JeffSnider_AIP
Twitter: https://twitter.com/EmilKalinowski
Alhambra YouTube: https://bit.ly/2Xp3roy
Emil YouTube: https://bit.ly/310yisL
Art: https://davidparkins.com/---------HEAR IT----------
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Apple: https://apple.co/3czMcWN
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LIVE! Reaction: Answering the St. Louis Fed
22 april 2021 · 21 min
In 2014 the St. Louis Federal Reserve noted that despite a MASSIVE increase in money the expected 4 to 6% inflation did not materialize. The researchers suggest it was a "liquidity trap". Yes, and no. But mostly no. Lees meer
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Twitter: https://twitter.com/JeffSnider_AIP
Twitter: https://twitter.com/EmilKalinowski
Alhambra YouTube: https://bit.ly/2Xp3roy
Emil YouTube: https://bit.ly/310yisL
Art: https://davidparkins.com/---------HEAR IT----------
Vurbl: https://bit.ly/3rq4dPn
Apple: https://apple.co/3czMcWN
Deezer: https://bit.ly/3ndoVPE
iHeart: https://ihr.fm/31jq7cI
TuneIn: http://tun.in/pjT2Z
Castro: https://bit.ly/30DMYza
Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Pandora: https://pdora.co/2GQL3Qg
Breaker: https://bit.ly/2CpHAFO
Castbox: https://bit.ly/3fJR5xQ
Podbean: https://bit.ly/2QpaDgh
Stitcher: https://bit.ly/2C1M1GB
PlayerFM: https://bit.ly/3piLtjV
Podchaser: https://bit.ly/3oFCrwN
PocketCast: https://pca.st/encarkdt
SoundCloud: https://bit.ly/3l0yFfK
ListenNotes: https://bit.ly/38xY7pb
AmazonMusic: https://amzn.to/2UpEk2P
PodcastAddict: https://bit.ly/2V39Xjr----EPISODE #66TOPICS----
00:05 In the pre-2007 period an increase in money supply lead to an increase inflation but...
02:59 ...the post-2007 period displayed a break in the relationship (or did it?!)
04:57 Possible causes include: labor slack, banks not lending, and 'too credible' central banks
06:59 Another cause (perhaps likely?) is the Liquidity Trap.
08:16 If the Fed controls interest rates, then a liquidity trap explanation sounds legitimate
10:58 If the Fed controls interest rates, then raising rates will unwind a liquidity trap
14:39 In 2005 Greenspan testified to Congress that a fundamental monetary assumption had failed
17:57 The Fed identified market desire for safe, liquid instruments but got the "why" wrong
19:39 The St. Louis Fed paper was published in April 2014, just as the third crisis had begun--------REFERENCES--------
St. Louis Fed's … -
Like 1970s, Like 2010s But Opposite
19 april 2021 · 1 uur 6 min
-----PART 01 SUMMARY------
US President Jimmy Carter told the nation that the US dollar's devaluation "is clearly not warranted by the fundamental economic situation". In fact, it was unreservedly deserved as the necessary consequence of prolonged official incompetence. Lees meer-----PART 02 SUMMARY------
US producer prices surged in the month of March. But Federal Reserve chairman Jay Powell said they won't last, that they are "transitory". HE IS RIGHT! But the reason he gives - the covo - is not correct. No, the reason is the same one since 2007: the global, silent depression.-----PART 03 SUMMARY------
On February 23rd the US Treasury 2-year auction put in some record-low bids. But then, on February 24th, the snowflake (or feather, or spark... maybe all three at once) came, so that by the 25th perceptions had reversed (melo)dramatically. Had Death come for US Treasuries?---------SPONSOR----------
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Twitter: https://twitter.com/JeffSnider_AIP
Twitter: https://twitter.com/EmilKalinowski
Alhambra YouTube: https://bit.ly/2Xp3roy
Emil YouTube: https://bit.ly/310yisL
Art: https://davidparkins.com/---------HEAR IT----------
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Apple: https://apple.co/3czMcWN
Deezer: https://bit.ly/3ndoVPE
iHeart: https://ihr.fm/31jq7cI
Tu… -
LIVE! Reaction: Answering The Economist
16 april 2021 · 15 min
The Economist says, 'No! They are white knights to be held in reserve; don't sully them with politics.' Jeff Snider agrees on the 'No!', but for entirely opposite reasons. Lees meer
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Alhambra YouTube: https://bit.ly/2Xp3roy
Emil YouTube: https://bit.ly/310yisL---------HEAR IT----------
Vurbl: https://bit.ly/3rq4dPn
Apple: https://apple.co/3czMcWN
Deezer: https://bit.ly/3ndoVPE
iHeart: https://ihr.fm/31jq7cI
TuneIn: http://tun.in/pjT2Z
Castro: https://bit.ly/30DMYza
Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Pandora: https://pdora.co/2GQL3Qg
Breaker: https://bit.ly/2CpHAFO
Castbox: https://bit.ly/3fJR5xQ
Podbean: https://bit.ly/2QpaDgh
Stitcher: https://bit.ly/2C1M1GB
PlayerFM: https://bit.ly/3piLtjV
Podchaser: https://bit.ly/3oFCrwN
PocketCast: https://pca.st/encarkdt
SoundCloud: https://bit.ly/3l0yFfK
ListenNotes: https://bit.ly/38xY7pb
AmazonMusic: https://amzn.to/2UpEk2P
PodcastAddict: https://bit.ly/2V39Xjr----EPISODE #64TOPICS----
01:08 Central bank mission creep is a result of their failure at the original job: manage money
04:38 When and why were central banks given independence and assumed a political detachment
07:14 Both governments and central bankers have taken an expansive view of the latter's mission.
08:06 Politicians do not want to tackle difficult issues, shirking their duty to central bankers
11:30 A central bank's original mission is money - not employment, not inflation.--------REFERENCES--------
The perils of asking central banks to do too much: https://econ.st/3fZNZt5
Alhambra Investments Blog: https://bit.ly/2VIC2wW
RealClear Markets Essays: https://bit.ly/38tL5a7---------WHO-----------
Jeff Snider, Head of Global Investment Research for Alhambra Investments with Emil Kalinowski. Art by David Parkins. -
The Gospel of Bernanke's Global Savings Glut
14 april 2021 · 1 uur 5 min
Karen King of the Harvard Divinity School wasn't the first 'professor' to discover "the long-buried secret of Jesus' marriage." That distinction belongs to fellow Harvard faculty member Robert Langdon, protagonist in Dan Brown's 2003 novel, The Da Vinci Code. Langdon was a fiction. King on the other hand was not; she held the very real Hollis Professorship of Divinity established in 1721 - the oldest, and arguably most prestigious, endowed chair in America. And there she was, in Rome, just seven years after serving as a consultant for the novel's film adaptation, to present at the International Congress of Coptic Studies. Like Langdon she would cast a stone at 2,000 years of patriarchal tradition. Lees meer
King had in her possession a business-card-sized papyrus, bearing 30-some Coptic words, including this astounding sequence: "Mary is worthy of it... Jesus said to them, My wife... she is able to be my disciple..." King proposed the fragment was a fourth-century Coptic translation of a late-second-century Greek gospel. She called it the Gospel of Jesus' Wife - "something that would stick", she later explained.
Incredulous complaints emerged almost immediately: the handwriting appeared blatantly modern, misspellings were "monstrous". One bemused Egyptoligist noted the copyist would, "have benefited from one more semester of Coptic." Still King persisted; she leveraged her institution's reputation and that of her office to engineer a defense from the prestigious Harvard Theological Review. Not until two years later, when the forger was revealed, did she conditionally concede the scrap was "likely a fake".
Ariel Sabar, the author of Veritas, the 2020 book which chronicles the affair, summarized King's behavior thusly: “[I]deological commitments were choreographing her practice of history. The story came first; the dates managed after. The narrative before the evidence; the news conference before the scientific analysis.” In this, the 63rd episode of Making Sense, we review…
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The Monetary Shadows
6 april 2021 · 1 uur 15 min
"I glanced at the list, running over names (probably misspelled) that meant nothing to me, with my hand on the butt of my righthand gun. That one now contained a very special load. According to Vannay, there was only one sure way to kill a skin-man: with a piercing object of the holy metal. I had paid the blacksmith in gold, but the bullet he’d made me – the one that would roll under the hammer at first cock – was pure silver." The scene is from The Wind Through the Keyhole, a 2012 Stephen King novel. It's not unheard of for the horror/fantasy-master's characters to call on silver to battle something from the dark and murky gray. Lees meer
From his 1986 novel, IT: "But that, of course, is only a joke, and not a very good one; there is only one story left, at least one he remembers, and that is the story of the silver slugs – how they were made in Zack Denbrough's workshop on the night of July 23rd and how they were used on the 25th." A great yarn, to be sure, but as members of an advanced civilization we KNOW there's nothing in the shadows with blood-red eyes and tentacles. Then again... that's precisely why Count Dracula moved to cosmopolitan London in Bram Stoker's 1897 classic.
You see, the superstitious peasants of Transylvania knew the preternatural was real. Not so post-Enlightenment England where mucus-oozing pores and frightful claws were disclaimed. And what better place to hide disgusting aberrations, but in the shadows of denial and willfully forgotten knowledge?
Today, enlightened monetary-scientists placate us with soothing expectation policies that the shadows harbor no ill-proportioned beasts. But supposing there were. Is there a silver bullet we could roll under the hammer? In Part 2 of this, the 62nd Episode of Making Sense, Jeff Snider discusses one candidate: the Eurodollar Futures market. But first, two researchers for the Federal Reserve uncover the horror of quantitative easing. Then we conclude with the fantasy of government stimulus.
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LIVE! Reaction: Answering Jay Powell
31 maart 2021 · 17 min
So says Federal Reserve Chairman Jerome Powell in a recent Wall Street Journal opinion column. Jeff Snider listens and reacts to Powell's case that the disruption wasn't the Fed's fault and that the central bank did the best it could. Lees meer
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Alhambra YouTube: https://bit.ly/2Xp3roy
Emil YouTube: https://bit.ly/310yisL---------HEAR IT----------
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Stitcher: https://bit.ly/2C1M1GB
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ListenNotes: https://bit.ly/38xY7pb
AmazonMusic: https://amzn.to/2UpEk2P
PodcastAddict: https://bit.ly/2V39Xjr----EPISODE #61 TOPICS----
01:03 Is a central bank's job to prevent crisis or to make the crisis less worse?
04:34 The Fed's goal should've been to maintain US dollar exchange rate stability and liquidity
06:01 US Treasuries were being sold by the market in March 2020, but why?
10:28 Powell says the recovery is continuing apace and on a good trajectory
12:21 The employment recovery took place almost entirely in the first months, but sideways since
14:34 What role does the mainstream media have in explaining what standard to hold the Fed to?--------REFERENCES--------
Jerome Powell on the Pandemic Year: https://on.wsj.com/39kdnp6
One Year Later: Why No ‘V’?: https://bit.ly/3dhBaY0
Alhambra Investments Blog: https://bit.ly/2VIC2wW
RealClear Markets Essays: https://bit.ly/38tL5a7---------WHO-----------
Jeff Snider, Head of Global Investment Research for Alhambra Investments with Emil Kalinowski. Art by David Parkins. Podcast intro/outro is "Habitual" by A… -
Commemorating QE's 20th Anniversary
29 maart 2021 · 1 uur
Jeff Snider is in his element in Episode 60, in which he observes the 20th anniversary of quantitative easing and notes the unsettling twist in oil futures; also, he reacts to the Federal Reserve Chairman who recently likened the Fed's actions last year, to the heroic Dunkirk evacuation. Lees meer
Your podcaster on the other hand comes out of the gate staggering by slandering everyone's favorite nation: New Zealand. Operating under the false impression that The Hobbit was a documentary, this podcaster opens the show asserting New Zealand is home to all manner of fantastic creatures like the platypus, narwhal, orcs and elves. The YouTube comments were aflame with polite indignation. The narwhal belongs to the Arctic, not Antarctic. Worse yet, the platypus is endemic to the only country in the world that doesn't care for New Zealand: Australia.
To make amends this podcaster watched BBC Planet Earth with New Zealand's fourth most popular guitar-based digi-bongo acapella-rap-funk-comedy folk duo: Bret McKenzie and Jemaine Clement. So dear audience, please squint your ears at the start of the episode. When you hear "platypus", receive Fiordland Crested Penguin, which is twice the size of a normal-sized man. When you hear "narwhal", instead pick up Kakapo, a parrot that identifies as an owl. When you hear "orcs", perceive Kiwi, like the bald eagle but flightless and with fur. And when you hear "elves", glean Weka another flightless bird with the legs of a witch, a taste for pickled olives and a cholesterol problem.
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Alhambra YouTube: https://bit.ly/2Xp3roy
Emil YouTube: https://bit.ly/310yisL---------HEAR IT----------
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Apple: https://apple.co/3czMcWN
Deezer: https://bit.ly/3ndoVPE
iHeart: https://ihr.fm/31jq7cI
TuneIn: http://tun.in/pjT2Z
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Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Pandora: https://pdora.co/2GQL3Qg
Breaker: https://bit.ly/2CpHAFO
Castbox: https://bit.ly/… -
Anniversary Special: Top-10 Podcast Intros
23 maart 2021 · 45 min
March 23, 2020 is a day that no financial market participant will forget. It was the day that America's S&P 500 put in its low and stock prices began their climb to "what looks like a permanently high plateau." More importantly, it was the day that Making Sense debuted. Yes, Jeff Snider and I decided that what the world really needed in the time of Covid and financial Armageddon was another financial podcast, and that we were going to give it to them. To commemorate the anniversary I proposed to Jeff that we do a retrospective. Jeff responded that he would love to - really. But he was reading through the Federal Open Market Committee's August 20, 1974 Memorandum of Discussion - again. Lees meer
And so instead, let me provide you with a retrospective of sorts, by playing the Top 10 Podcast Introductions as voted on by me, the introducer. Starting with Episode 14 and continuing through Episode 58 I introduce the points of discussion with the purpose of ensnaring you, the dear listener. In two to three minutes I have to convey to you the topics in an educational or funny or poignant or enthusiastic or absurd way. Sometimes I use a metaphor, other times a literary reading. Sometimes it is a suckescess... sometimes I can't pronounce the word success. Either way, it is an adventure. Here are the Top 10 Podcast Introductions of Making Sense, Season 1.
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Twitter: https://twitter.com/JeffSnider_AIP
Twitter: https://twitter.com/EmilKalinowski
Alhambra YouTube: https://bit.ly/2Xp3roy
Emil YouTube: https://bit.ly/310yisL
Art: https://davidparkins.com/---------HEAR IT----------
Vurbl: https://bit.ly/3rq4dPn
Apple: https://apple.co/3czMcWN
Deezer: https://bit.ly/3ndoVPE
iHeart: https://ihr.fm/31jq7cI
TuneIn: http://tun.in/pjT2Z
Castro: https://bit.ly/30DMYza
Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Pandora: https://pdora.co/2GQL3Qg
Breaker: https://bit.ly/2CpHAFO
Castbox: https://bit.ly/3fJR5xQ
Podbean: https://bit.ly/2QpaDgh
Stitcher: … -
Interview: Izabella Kaminska
22 maart 2021 · 1 uur 48 min
Welcome to Making Sense. Jeff Snider and I are joined by a very special guest, Izabella Kaminska who has accomplished many accomplished things, including being the editor of FT Alphaville, the Financial Times blog. Though to refer to Alphaville as a mere blog, would be a gross disservice. No ladies and gentlemen, it is much more than that. It is the modern-day equivalent of the 17th-century London coffeehouse. Lees meer
Both, forums for transactions, spirited debate, and the exchange of information, ideas - and lies! - though Alphaville is pointing them out for our benefit. Strangers, no matter what their social standing or political allegiance, are always welcomed into lively convivial company. The topics, then like now: the stock exchange, insurance, auctioneering, politics, arts... Then? The 'not-so-old' masters. Now? NFTs. Both the contents of the 17th-century coffee mug and Alphaville could be described the same way: "'black as hell, strong as death, sweet as love' and shot through with grit."
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PART 01: Financial journalism, the necessity of skepticism, public distrust of media, press reticence to cover underclass concerns, reportage to clarify versus to convince and technology's impact on news.01:44 The nature of FT Alphaville relative to mainstream financial media
08:55 The importance of skepticism and critique in Alphaville's coverage of markets
13:26 According to Gallup, Americans have very little to no confidence in newspapers
22:42 Media reticence to cover 'unsophisticated', 'conspiratorial' working class concerns
33:41 Drawing attention to and clarifying versus reporting to confirm, conclude and/or convince
43:42 Technology's impact on journalism - past, present and prospective.
PART 02: Work furlough as proto Universal Basic Income, a labor force under Modern Monetary Theory, naïve accedence of Environmental-Social Governance, socialism, communism and corporate-capitalism.
46:37 Political determination of economic outcomes via f…
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LIVE! Reaction: Answering Paul Krugman
18 maart 2021 · 20 min
Will stagnation follow the Biden Boom? So asks New York Times columnist (and Nobel memorial prize winner) Paul Krugman. Jeff Snider listens and reacts to Krugman's lament that, though the relief bill is done, recovery may be harder. Lees meer
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Apple: https://apple.co/3czMcWN
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iHeart: https://ihr.fm/31jq7cI
TuneIn: http://tun.in/pjT2Z
Castro: https://bit.ly/30DMYza
Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Pandora: https://pdora.co/2GQL3Qg
Breaker: https://bit.ly/2CpHAFO
Castbox: https://bit.ly/3fJR5xQ
Podbean: https://bit.ly/2QpaDgh
Stitcher: https://bit.ly/2C1M1GB
PlayerFM: https://bit.ly/3piLtjV
Podchaser: https://bit.ly/3oFCrwN
PocketCast: https://pca.st/encarkdt
SoundCloud: https://bit.ly/3l0yFfK
ListenNotes: https://bit.ly/38xY7pb
AmazonMusic: https://amzn.to/2UpEk2P
PodcastAddict: https://bit.ly/2V39Xjr----EPISODE #57 TOPICS----
00:01 Paul Krugman, NYTimes columnist, believes the Biden stimulus will not be enough
02:31 Will a stimulus bill with a huge sticker price be enough to overcome "Secular Stagnation"?
05:28 A growing consensus of economists believes the last decade may not have been very good
08:18 Bond markets are not signaling the recovery has been very good so far
12:09 What is the solution to secular stagnation?
15:38 There is agreement that the economy is very unhealthy, stimulus may not be enough--------REFERENCES--------
Will Stagnation Follow the Biden Boom?: https://nyti.ms/2OtQ5pK
Alvin Hansen and Secular Stagnation: https://bit.ly/2NkJUns
Hey Kid, Want Some Communism? : https://youtu.be/bKHzn2UaqLU
Communism - Don't Call it a Comeback: https://youtu.be/FhBQhRLmTQc
Alhambra Investments Blog: https://bit.ly/2VIC2wW
RealClear Markets Essays: https://bit.ly/38tL5a7---------WHO-----------
Jeff Snider, Head of Global Investment Research for Alhambra Investments with Emil Kalinows… -
False Dawn(s)
15 maart 2021 · 1 uur 5 min
Space, the final metaphor. Why do central bankers offer spirographic, retrograde answers? Because they operate within a Ptolemaic paradigm - a geocentric model of our monetary system in which the central bank is the hub around which all else revolves. Why is unobservable, offshore credit fundamentally important? Because like dark matter and dark energy, this shadow money represents the broad majority of material and heat that constitute our monetary universe. Lees meer
Which brings your podcaster to the 21st chapter of "The Courage to Act" authored by Ben Bernanke. There, the former chairman defends the Fed's second quantitative easing in 2010 because of an economic "false dawn". No mere rhetorical flourish, the false dawn is a regular astral phenomenon. Each autumn and spring, the northern and southern latitudes respectively, will observe a triangular diffusion of light rising above the horizon. It seems to herald recovery from the darkness.
But Sol won't come. Not yet at least. Light, yes. But the wrong kind. Instead of a medley of warm colors refracted by the near atmosphere, the false dawn is a sterile white, originating far beyond our Earth, in cold space. Officially known as the Zodiacal Light, we witness interplanetary dust particles reflecting sunlight.
Perhaps not surprisingly, Bernanke's book had no further chapters on economic false dawns despite their taking on an astronomical regularity, arriving again and again and again in 2011, 2014 and 2017. Jeff Snider, part-time monetary sleuth and full-time cosmos student, recognizes the difference between reflation's false dawn and recovery's warm glow. In this, the 56th episode of Making Sense, we review the light coming over the horizon from negative repo rates, surging M2 money supply and rising US Treasury yields. We find it cold, fallow and gray.
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PART 01: Learn why rates in the repurchase agreement market went negative. What might it mean for economic recovery, not only in the United States … -
LIVE! Reaction: Answering Martin Wolf
10 maart 2021 · 18 min
Wolf ponders what central banks should target (e.g. inflation, asset prices, social justice, nominal GDP). Incredibly at no point in the article was targeting actual money supply considered. WILD! Lees meer
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Apple: https://apple.co/3czMcWN
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Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Pandora: https://pdora.co/2GQL3Qg
Breaker: https://bit.ly/2CpHAFO
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Podbean: https://bit.ly/2QpaDgh
Stitcher: https://bit.ly/2C1M1GB
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Podchaser: https://bit.ly/3oFCrwN
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SoundCloud: https://bit.ly/3l0yFfK
ListenNotes: https://bit.ly/38xY7pb
AmazonMusic: https://amzn.to/2UpEk2P
PodcastAddict: https://bit.ly/2V39Xjr--------REFERENCES--------
What central banks ought to target: https://on.ft.com/38eLtu7
Alhambra Investments Blog: https://bit.ly/2VIC2w… -
It was a dark and stormy depression...
8 maart 2021 · 1 uur 7 min
"The pen is mightier than the sword." "The great unwashed." "Pursuit of the almighty dollar." These are prhases we have all heard and they come from a single source: 19th century English writer and politician Edward George Earle Lytton Bulwer-Lytton. Bulwer-Lytton was a successful novelist, poet and playwright. His political accomplishments included nine years in Parliament, serving as the British Colonial Secretary, and being offered - AND TURNING DOWN - both a lordship of the Admiralty AND the Crownship of Greece (i.e. king)! Today he is remembered for writing... the worst opening sentence in the history of the English-speaking peoples: Lees meer
"It was a dark and stormy night; the rain fell in torrents — except at occasional intervals, when it was checked by a violent gust of wind which swept up the streets (for it is in London that our scene lies), rattling along the housetops, and fiercely agitating the scanty flame of the lamps that struggled against the darkness."
Episode 54 reviews articles by Jeff Snider covering: the Treasury inflation-protected securities curve inverting, the life span of a post-2008 reflation, the curious appreciation of the Chinese currency, as well as how Fed officials in 1937 convinced themselves of an impending inflationary storm (in the middle of an economic depression). None of those articles open in the Bulwer-Lytton style -- precisely the opposite! And yet many - some, a few... someone... And yet this podcaster wonders, how might a Eurodollar University educated author open their novel?
It was a dark and stormy depression; bank reserves fell in torrents — except at occasional intervals, when they were checked by a breath of reflation which swept up economists (for it is in the Eccles Building that our scene lies), rousing along the academics, and fiercely inflating the faith in a recovery that struggled against the darkness.
-------SUMMARY------
PART 01: The US Treasury inflation-protected security curve has gone upside down. Indeed,… -
LIVE! Reaction: Answering Jon Hilsenrath
3 maart 2021 · 17 min
Should speculative ventures be included in calculations of inflation? What about productive investment? Housing? All transactions? Or just consumer prices? Lees meer
----------WHERE----------
Vurbl: https://bit.ly/3rq4dPn
Apple: https://apple.co/3czMcWN
Deezer: https://bit.ly/3ndoVPE
iHeart: https://ihr.fm/31jq7cI
TuneIn: http://tun.in/pjT2Z
Castro: https://bit.ly/30DMYza
Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Pandora: https://pdora.co/2GQL3Qg
Breaker: https://bit.ly/2CpHAFO
Castbox: https://bit.ly/3fJR5xQ
Podbean: https://bit.ly/2QpaDgh
Stitcher: https://bit.ly/2C1M1GB
PlayerFM: https://bit.ly/3piLtjV
Podchaser: https://bit.ly/3oFCrwN
PocketCast: https://pca.st/encarkdt
SoundCloud: https://bit.ly/3l0yFfK
ListenNotes: https://bit.ly/38xY7pb
AmazonMusic: https://amzn.to/2UpEk2P
PodcastAddict: https://bit.ly/2V39Xjr
AlhambraTube: https://bit.ly/2Xp3roy----------WHEN----------
01:02 John Hilsenrath says the Fed has failed to hit its inflation target for "several" years.
02:48 Is the Fed keeping interest rates low or is it the market? Which is the cart? The horse?
03:31 Should asset price increases be included in measures of inflation?
05:08 How to interpret rising housing prices with falling apartment rental prices?
08:15 Asset price bubbles - whose responsibility are they? The Fed? Other regulators?
11:32 The TIPS market has inverted - near-term up, long-term trending down.
13:13 Economists have long struggled whether / to what degree to include asset price inflation----------WHAT----------
Inflation Problems Depend on Where You Look for Them: https://on.wsj.com/3b1E9nB
Alhambra Investments Blog: https://bit.ly/2VIC2wW
RealClear Markets Essays: https://bit.ly/38tL5a7----------WHO----------
Jeff Snider, Head of Global Investment Research for Alhambra Investments with Emil Kalinowski, not spending money on haircuts. Art by David Parkins. Podcast intro/outro is "About to Explode" by Daxten and Wai at Epidemic Sound. -
Anomalies? Or Triggers?
1 maart 2021 · 57 min
The theme of Making Sense Episode 52 is how an environment reacts to an anomaly. Resilient systems keep these aberrations constrained. But fragile ones can retroactively redefine what had earlier been labeled as an "irregularity", "oddity" or "operational error" to something altogether more unsettling: "cause", "spark", "trigger". Lees meer
In part one, Jeff Snider continues his multi-week review of historical breaks to the smooth functioning of interbank payment and messaging systems. This time a look at a sequence that led to a week-long disorder to Fedwire in August 1990. Part two, also a continuation of a multi-week review, ponders what may be causing the disquieting twist in the US Treasury yield curve. Is the demand for short-term collateral a disqualification of reflation, as was the case during 2013's so-called Taper Tantrum? Lastly, some words on oil and the developing Texas power market credit crisis, in which electric retailers failed to make $2.1 billion in required payments and put the largest power generation and transmission cooperative into bankruptcy.
Fedwire "operational error[s]". Unsettling demand for Bills. Texas margin calls. An approaching quarter-end seasonal low point in liquidity. A looming regulation-mandated US Treasury cliff on April Fools' Day. All anomalies... in a resilient system.
----------WHY----------
PART 01: Fedwire, the interbank system that transmits billions between 9,000-plus members, broke on Wednesday. The Fed says, "operational error" implying mere technical trivia - an anomaly. Why do some breaks stay mere anomalies while others trigger volatile, systemic consequences?PART 02: The US yield curve has twisted as Bill yields fall and Bond yields rise. We review a similar situation in 2013 popularly known as "the Taper Tantrum", WHICH WAS NOT A TAPER TANTRUM! Then - like now - a collateral scramble in Bills and a relief sell-off in Bonds.
PART 03: What does the oil market (production, demand, inventory) in the USA tell us about…
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Reading Around: Pettis On Tariffs and US Jobs
26 februari 2021 · 24 min
Michael Pettis of Carnegie Endowment for International Peace. Read by Emil Kalinowski. Art by David Parkins. Intro/outro is "The Village Idiot" by Justnormal at Epidemic Sound. Lees meer
----------WHAT----------
How Trump’s Tariffs Really Affected the U.S. Job Market: https://bit.ly/2P7qHWJ----------WHERE----------
Pettis' Writings: https://carnegieendowment.org/experts/444
Pettis' Twitter: https://twitter.com/michaelxpettisVurbl: https://bit.ly/3rq4dPn
Apple: https://apple.co/3czMcWN
Deezer: https://bit.ly/3ndoVPE
iHeart: https://ihr.fm/31jq7cI
TuneIn: http://tun.in/pjT2Z
Castro: https://bit.ly/30DMYza
Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Pandora: https://pdora.co/2GQL3Qg
Breaker: https://bit.ly/2CpHAFO
Castbox: https://bit.ly/3fJR5xQ
Podbean: https://bit.ly/2QpaDgh
Stitcher: https://bit.ly/2C1M1GB
PlayerFM: https://bit.ly/3piLtjV
Podchaser: https://bit.ly/3oFCrwN
PocketCast: https://pca.st/encarkdt
SoundCloud: https://bit.ly/3l0yFfK
ListenNotes: https://bit.ly/38xY7pb
AmazonMusic: https://amzn.to/2UpEk2P
PodcastAddict: https://bit.ly/2V39Xjr -
FT: "Do Not Rule Out a Market Panic Next Month"
22 februari 2021 · 1 uur 17 min
Part 01: (01:30 to 38:27) What are monetary technocrats / financiers doing to save the world economy? We review: yield curve control in Australia (and Japan!), American regulators tip-toeing away from a once-favored LIBOR alternative, and the ecstatic economic expectations of German financiers. Lees meer
Part 02: (38:27 to 1:05:19) A Financial Times column warns of a US Treasury Bill air-pocket in March. Learn the little-known history of a mid-market, 1970s German bank that compelled regulators to move towards capital and supplementary leverage ratios. The very ratios that may now trigger a panic.
Part 03: (1:05:19 to 1:17:00) Learn how to reconcile a positive surge in retail sales with a nightmare string of 'record' jobless claims and lousy sentiment reported by the University of Michigan consumer survey. Perhaps pent up demand? Maybe. An unusual, poorly explained seasonal adjustment boost? Maybe too.
----------SPONSOR----------
But first, this from Eurodollar Enterprises! The motion picture event of the summer: (Con)Tango & Cash. When an international smuggling ring uses the local commodity exchange to send gold into backwardation, two macroeconomists take matters into their own hands... and onto the spot market.
Starring Travis 'the President' Kimmel as Contango, "You can take delivery of lead -- punk."
And Steven 'the Monarch' Van Metre as Cash, "You know how I promised to let you close out that trade?"
"Yeah man, you did Cash! You did promise!"
"I lied."
With Grant Williams as the polite British guy, “Well chaps, you put the mockers on, didn’t you?”
This motion picture will never be rated. Available only on-demand at Real Vision.----------WHERE----------
Vurbl: https://bit.ly/3rq4dPn
Apple: https://apple.co/3czMcWN
Deezer: https://bit.ly/3ndoVPE
iHeart: https://ihr.fm/31jq7cI
TuneIn: http://tun.in/pjT2Z
Castro: https://bit.ly/30DMYza
Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Pandora: https://pdora.co/2GQL3Qg
Breaker: https://bit.ly/2CpHAFO
Ca… -
LIVE! Reaction: Answering Philip Stevens
21 februari 2021 · 21 min
After decades of market liberalism and fiscal fundamentalism, policymakers are returning to Keynes. Jeff Snider reacts to two recent articles: "Bond yields are not good predictors of inflation" (Peterson Institute for International Economics) and "Why economists kept getting the policies wrong" (Financial Times). Lees meer
----------WHERE----------
Vurbl: https://bit.ly/3rq4dPn
Apple: https://apple.co/3czMcWN
Deezer: https://bit.ly/3ndoVPE
iHeart: https://ihr.fm/31jq7cI
TuneIn: http://tun.in/pjT2Z
Castro: https://bit.ly/30DMYza
Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Pandora: https://pdora.co/2GQL3Qg
Breaker: https://bit.ly/2CpHAFO
Castbox: https://bit.ly/3fJR5xQ
Podbean: https://bit.ly/2QpaDgh
Stitcher: https://bit.ly/2C1M1GB
PlayerFM: https://bit.ly/3piLtjV
Podchaser: https://bit.ly/3oFCrwN
PocketCast: https://pca.st/encarkdt
SoundCloud: https://bit.ly/3l0yFfK
ListenNotes: https://bit.ly/38xY7pb
AmazonMusic: https://amzn.to/2UpEk2P
PodcastAddict: https://bit.ly/2V39Xjr
AlhambraTube: https://bit.ly/2Xp3roy----------WHEN----------
01:02 Two economists write that bond yields are not good predictors of inflation
03:20 Bond yields have failed to predict inflation for 70 years in the US; three other countries
05:31 Why economists kept getting the policies wrong
08:01 Was monetarism was derailed by poor philosophy? Or because measures of money failed?
11:43 Monetarism ditched, so first came currency exchange targeting then inflation targeting.
13:26 Positive Economics, econometrics promised wonderful, impossible things
16:11 Central Bankers use mathematics as a shield against criticism
18:42 We are back where we started, time to dust off Keynes General Theory.----------WHAT----------
Teenagers baffled by rotary phone: https://youtu.be/oHNEzndgiFI
Bond yields are not good predictors of inflation: https://bit.ly/2Zz7dwd
Why economists kept getting the policies wrong: https://on.ft.com/2ZwAgAw
Alhambra Investments Blog: https://bit.ly/2VIC2wW
RealClear … -
Reading Around: Myrmikan on System-Critical Short Squeezes
18 februari 2021 · 26 min
Financial historian Daniel Oliver's essay on the systemic consequence of the 1907 short squeeze on United Copper Company and lessons for today. A reading, by Emil Kalinowski. Lees meer
----------WHO----------
Daniel Oliver of Myrmikan Capital, LLC. Read by Emil Kalinowski. Art by David Parkins. Intro/outro is "Alienated" by ELFL at Epidemic Sound.----------WHAT----------
The Final Pop: https://bit.ly/37sfwOH----------WHERE----------
Myrmikan's Writings: http://myrmikan.com/
Myrmikan's Twitter: https://twitter.com/MyrmikanEmil's Twitter: https://twitter.com/EmilKalinowski
Art: https://davidparkins.com/Vurbl: https://bit.ly/3rq4dPn
Apple: https://apple.co/3czMcWN
Deezer: https://bit.ly/3ndoVPE
iHeart: https://ihr.fm/31jq7cI
TuneIn: http://tun.in/pjT2Z
Castro: https://bit.ly/30DMYza
Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Pandora: https://pdora.co/2GQL3Qg
Breaker: https://bit.ly/2CpHAFO
Castbox: https://bit.ly/3fJR5xQ
Podbean: https://bit.ly/2QpaDgh
Stitcher: https://bit.ly/2C1M1GB
PlayerFM: https://bit.ly/3piLtjV
Podchaser: https://bit.ly/3oFCrwN
PocketCast: https://pca.st/encarkdt
SoundCloud: https://bit.ly/3l0yFfK
ListenNotes: https://bit.ly/38xY7pb
AmazonMusic: https://amzn.to/2UpEk2P
PodcastAddict: https://bit.ly/2V39Xjr -
Interbank Netting: The Pressure to Get to Zero
16 februari 2021 · 1 uur 19 min
Having studied monetary policy for several years it was only natural that your podcaster spent considerable time contemplating the essential elements of fiction. Some experts say there are five components to it; others put the tally at six, even eight! But at the core it has always been the three elements: plot, setting and character. Lees meer
Plot was perfected, in the Western tradition at least, in the late 16th century by Shakespeare with the 5-act dramatic structure. Setting, given short-shrift for millennia, did not achieve co-equal status until the gothic novels of the mid-18th century. And character? Scholars point back 28 centuries to The Iliad: heroism, cowardice, pride, hubris - wrath. But the scholars are wrong. Character wasn't perfected first, but last. Not until the 1980s action drama The A-Team did this element of fiction reach its zenith.
The American television masterpiece synthesized what the Great Books dared not imagine into the now classic quartet: Colonel John "Hannibal" Smith as the brains; Lieutenant Templeton "Faceman" Peck as the looks; Sergeant Bosco Baracus the muscle; Captain H.M. Murdock the wildcard. The casting blueprint can be observed most everywhere; in the arts, at the office; even family the dinner table. Central banking is no exception. In the role of the brains is Ben "Hannibal" Bernanke. The looks? Lady Lagarde. The muscle? Jay "Mad Dog" Powell. The wildcard? The audience will naturally point to Haruhiko Kuroda and, before January 28th, the audience would have been correct.
On that day Isabel Schnabel, Member of the Executive Board of the European Central Bank, gave a speech extolling the virtues of the sovereign-bank-corporate nexus. That is technocrat-speak for the government-guaranteed private-bank loans to private enterprise. Schnabel endorsed these "crucial" national loan schemes and encouraged Europe's capitals to continue them, warning any premature end would be "destabilising". Put another way, the baton that represents the…
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LIVE! Reaction: Answering The Economist
15 februari 2021 · 18 min
Jeff Snider reacts LIVE! to an article from The Economist. The magazine offers three arguments why the US economy might overheat in 2021: evidence that the downturn is temporary; generous fiscal stimulus; and the Federal Reserve’s monetary-policy strategy. Lees meer
----------WHERE----------
Vurbl: https://bit.ly/3rq4dPn
Apple: https://apple.co/3czMcWN
Deezer: https://bit.ly/3ndoVPE
iHeart: https://ihr.fm/31jq7cI
TuneIn: http://tun.in/pjT2Z
Castro: https://bit.ly/30DMYza
Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Pandora: https://pdora.co/2GQL3Qg
Breaker: https://bit.ly/2CpHAFO
Castbox: https://bit.ly/3fJR5xQ
Podbean: https://bit.ly/2QpaDgh
Stitcher: https://bit.ly/2C1M1GB
PlayerFM: https://bit.ly/3piLtjV
Podchaser: https://bit.ly/3oFCrwN
PocketCast: https://pca.st/encarkdt
SoundCloud: https://bit.ly/3l0yFfK
ListenNotes: https://bit.ly/38xY7pb
AmazonMusic: https://amzn.to/2UpEk2P
PodcastAddict: https://bit.ly/2V39Xjr
AlhambraTube: https://bit.ly/2Xp3roy----------WHEN----------
00:55 Why won't a large fiscal stimulus (e.g. Biden's 9% of US GDP) save a post-2008 economy?
03:39 Why won't a large fiscal stimulus overheat a post-2008 economy?
06:46 Why aren't the positive employment gains of July-December 2020 positive?
08:13 Why isn't a pool of excess savings indicative of potential activity in a post-2008 economy?
11:38 Did the Federal Reserve learn the right lesson from the 2013 "taper tantrum"?
14:19 Why won't the Fed's new "average inflation" strategy not make save a post-2008 economy?----------WHAT----------
The Economist, Fire without Fury: https://econ.st/3qnkWSu
Alhambra Investments Blog: https://bit.ly/2VIC2wW
RealClear Markets Essays: https://bit.ly/38tL5a7----------WHO----------
Jeff Snider, Head of Global Investment Research for Alhambra Investments with Emil Kalinowski, seeing what the tide brought in. Art by David Parkins. Podcast intro/outro is "Chasing Visions" by vvano at Epidemic Sound. -
Devolution of Financial Memory
8 februari 2021 · 1 uur 3 min
Sophocles won 24 of the 30 literary competitions he entered, placing second in the rest. Of his 120-plus plays, only seven survive. Eratosthenes, calculated the Earth's circumference with breathtaking accuracy. As Chief Librarian of the Library of Alexandria he oversaw the collation of hundreds of thousands of works. But not even his own "On the Measure of the Earth" survived the Library's progressive destruction by war, negligence and cultural revolution. Lees meer
Rashid-al-Din Hamadani created the first world history, taking advantage of his location at the crossroads of a Mongol empire with access to European, Arabic, Persian, Indian, Mongol and Chinese scholars. Hamadani, not wanting his masterpiece to be lost to time, arranged to have the work copied in Arabic and Persian every year and distributed. But his patron's death and royal intrigues cost him his station and us his work; no complete copy survives.
Several scholars, dizzy by the thought of humanity's lost knowledge, tried their hand at wistful, melancholy catalogues of what might have been. Thomas Browne wrote Musaeum Clausum, "an imagined inventory of 'remarkable books, antiquities, pictures and rarities of several kinds, scarce or never seen by any man now living.'" Besides Seneca's epistles to St. Paul, this hidden library houses history's most famous box within which was the perfume of infection responsible for the 17th century Plague of Milan.
Of course there's a difference between the tragedy of lost knowledge and the tomfoolery of what was willfully forgotten. It is the latter which financial market participants specialize in. John Kenneth Galbraith lamented that, "There can be few fields of human endeavor in which history counts so little as in the world of finance." James Grant concurs, laconically noting that, "Progress is cumulative in science and engineering, but cyclical in finance." And so, in Episode 45 the Rashid-al-Din of the Eurodollar will help us un-forget the three reflations since 2007 a…
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Modern Monetary Hypnosis
24 januari 2021 · 48 min
As many listeners have long suspected, your podcast host did, as a child, run away and join the circus. Not dissimilar from a traditional childhood, it was your classic Gypsy camp. If children misbehaved, we would be "lock[ed]... into stocks, or throw[n]... into a cage and hoist[ed]... into the flytower... dangling precariously over the stage." Our ringmaster, Giuseppe Grimaldi "was horribly morbid, living in perpetual fear of death, and especially of being buried alive. When he finally died... his will directed that his eldest daughter cut his head from his corpse just to be certain." Sure, perhaps quirky, but certainly not the oddest troupe - not Pandemonium Carnival. Lees meer
So, looking to make a career of it your podcaster tried his hand at clownship. But, by that time, famous clowns like Pagliacci, Pennywise and Pogo were, despite slaying their audience with their routines, giving a bad name to the profession. So then, this host turned to tarot card reading and hypnosis. Despite earning some minor acclaim in London as Madame Simza, your host simply didn't have the chops and was forced to turn to the only option left: a Masters in Business Administration.
Surprisingly, it was an easy fit. Tarot cards - which "illuminate your past, clarify [the] present, show... the future" - had taught me everything I needed to know about finance. The card "Temperance, [when] inverted [is] indicative of volatility." If one draws "The Fool, someone has been led astray" - an investment fraud. "The Two of Cups?" It represents "a powerful bond" - a sovereign bond. Your podcaster learned about hypnosis too, except that the economics professors used different terms for it: expectations policy, forward guidance, moral suasion.
----------WHY----------
Part 01: Central banks cannot define, identify, measure or map modern money. And they haven't been able to since the 1970s. So instead they offer "moral suasion". That's a fancy word for threats, posturing and coercion. That's all fine and wel… -
WSJ Columnist asks Fed: 'What the...?'
19 januari 2021 · 43 min
A recent Hidden Forces podcast with Demetri Kofinas featured professor Kevin Vallier and his new book "Trust in a Polarized Age". Vallier notes that Americans are less trusting than at any point since at least the 1960s. The timing is no surprise to any that read William Strauss and Neil Howe's The Fourth Turning. The "American High" - a period of confidence during which the society felt it could accomplish anything - ended with President Kennedy's assassination. Lees meer
That phenomenon - that lack of trust, that lack of confidence - can be observed even in the University of Michigan survey of consumers. During the 1950s expectations about the future always ran ahead of the contemporary condition; an optimism, whether the present was good or bad, that it would be even better soon. But, by the end of the 1960s, and ever since, expectations are always worse than the present. If we use confidence in democracy as a proxy for trust, that phenomenon is not solely American. A University of Cambridge project that includes 4 million people, covering 154 countries and combines over 25 international surveys showed 2019 to have been "the highest level of democratic discontent on record". Surely 2020 will rank even worse when results are finally published.
A more granular survey by Gallup has been conducted in the United States since the early 1970s and focuses on public and private institutions. Citizens are asked how much confidence they have in: organized religion, the Supreme Court, Congress, organized labor, big business, public schools, newspapers, the military, etc. Almost at the very bottom are news organizations. The only institution in which the public consistently has less confidence in is Congress, which they recently attempted to burn down.
The financial media is no exception, as Jeff Snider often makes clear in his writings. But just as Vallier expressed hope with Kofinas that trust can be rebuilt and just as Strauss and Howe conveyed confidence that institutional stre…
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Dr. Copper's Diagnosis
10 januari 2021 · 41 min
Mary Toft had delivered a litter of rabbits - that was the news that reached the court of King George I in 1726. Obstetrician John Howard arrived at Toft's bedside in September where he was presented with several animal parts, ostensibly from the supernatural womb. In October, she delivered nine dead baby rabbits, prompting Howard to write a letter to England's greatest doctors and scientists, as well as the King's secretary. Nathaniel St. André, the King's Swiss surgeon-anatomist, was sent to investigate. Toft greeted his arrival in November by delivering her 15th dead rabbit in his presence. St. André bought the story and "took some of the rabbit specimens back to London to show the King." Lees meer
Despite a chorus of doubt from other physicians and indisputable physical evidence from dissection of the rabbits, both Howard and St. André continued to support Toft's story. It seems Howard, taken in by the scam at first, was doubling-down as the stakes were raised hoping his bluff would be saved by a real miracle. St. André on the other hand seems to have made his stand on, "'maternal impression', an idea popular at the time. The theory proposed that an emotional stimulus experienced by a pregnant woman" - Toft had dreamt of rabbits - "could influence the development of the foetus."
Howard and St. André damaged the reputation of physicians. But there have been worse, Dr. Pepper for example - disgusting. Plenty of good docs of course, and not necessarily physicians: Dr. Manhattan, the smurfy-blue god; Dr. Disrespect, the gaming personality; "The Dock of the Bay", by Otis Redding. So, where on the spectrum lies copper with its doctorate of philosophy in economics?
In part 2 of Episode 41, Jeff Snider weighs the calm supply-and-demand fundamentals, versus the Howard and St. André-like narrative that the good ship #Copper-Pop - fueled by Fed #QE-finity inflation - has achieved escape velocity, entered the #Tesla-osphere, and is on its way to the #Bitcoin-star! But first, the …
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What's the Score?
24 december 2020 · 1 uur 8 min
In the middle of the 17th century, Athanasius Kircher -- "one of Europe’s most successful scholars" -- published "Egyptian Oedipus", a magisterial three-volume folio on Egyptology that "presented Latin translations of hieroglyphic inscriptions". The three-tome folio of ornate illustrations and diagrams was the product of "more than two decades of toil"; it sourced Arabic, Aramaic, Coptic, Ethiopian, Greek, Latin, Oriental and Samaritan texts. Kircher had illustrated "mummies, sarcophagi, Canopic jars, sphinxes" as well as "almost every hieroglyphic inscription known to Europeans" and translated them "character by character, into Latin prose." It was wholly and "utterly mistaken". Lees meer
In the late 19th century, William F. Warren was "one of the outstanding figures" of education, noted his 1929 New York Times obituary. He was a charter member of both the New England Conservatory of Music and Wellesley College. He spent 45 years at Boston University, including three decades as president during which a number of progressive firsts occurred, such as America's very first female PhD. He authored eight books, including "Paradise Found" in which, drawing on his knowledge of "the great epic folklore of the Hindus, the Celts, the Chinese, the Persians", and footnoting in French, German and Greek, "he arrived at the inevitable conclusion: the Garden of Eden is at the North Pole."
Are we, in the early 21st century, free of such erroneous scholarship? Was then a superstitious past and now a scientific present? If our scholarly leaders were presented with evidence, if they had inside information, if they were imbued with power to compel actors to share data would they goal-seek a result, like Kircher and Warren? In Part 1 of Episode 40 Jeff Snider reads through official Federal Reserve emails covering the final 90-some days of Lehman Brothers' existence. It turns out our scholars are human too.
----------SPONSOR----------
But first, this from Eurodollar Enterprises! Friends, are yo… -
Quantum Dollar Mechanics
14 december 2020 · 1 uur 4 min
Your podcaster has long been impressed by cinema that presents what is outside the human sensory process; art that conceives and presents what we literally cannot perceive. In 2001: A Space Odyssey, Stanley Kubrik shows us what transcendence is, by sending Keir Dullea through an astral rainbowfall. Christopher Nolan's Interstellar presents Matthew McConaughey in a tesseract, the three-dimensional shadow of four-dimensional space. In Annihilation, Alex Garland samples evolution, by introducing a sentient, prismatic cancer that refracts and reflects the DNA of its surroundings, including that of Natalie Portman. Lees meer
The audience is placed in an environment that doesn't reconcile with daily life and leaves them holding on to reality - at least as they understand it - by their fingernails. The eurodollar system is like that. Consider this legal wordfall from the Financial Stability Board: "regulatory arbitrage in the presence of non-harmonised re-hypothecation regimes."
Or this two-dimensional shadow of extra-dimensional money by Jeff Snider: "Nobody buys securities; they borrow and claim to 'own' [them]... [then] the client will agree to allow the dealer to re-pledge... the very security the client is claiming to own... [T]he already re-pledged security... can be re-pledged again... In many if not most cases, there needn’t be the original client [desire] for this chain of re-pledging."
If you want to know what it's like to travel through a wormhole for 18 hours in a hundredth of a second like Jodie Foster did in Robert Zemeckis' Contact then part one of Episode 39 is for you. Parts two and three aren't the worst things in the world either. Well, this world at least...
----------SPONSOR----------
But first, this from Eurodollar Enterprises! Friends, are you a central banker? Do you celebrate monetary accomplishments before they occur? Do you struggle in credibly promising to be irrational? Then the new Clench 5000 from Eurodollar Enterprises is for you! Yes, simply pla… -
The Weïrd Sisters
7 december 2020 · 58 min
Christine Lagarde, Janet Yellen and Stephanie Kelton are among the world's best known political-economists. Lagarde, was France's Minister of Finance, Managing Director of the International Monetary Fund, and is President of the European Central Bank - all firsts for a lady. Yellen, was America's Chair of the Federal Reserve and is presumptive nominee for US Secretary of the Treasury - each a first for a lady. Kelton, was advisor to the Bernie Sanders 2016 presidential campaign, is a best-selling author, and is the most famous evangelist for modern monetary theory. Lees meer
And now these remarkable three are in positions of power and influence to guide the world out of socioeconomic depression. It echoes the 1999 cover of Time Magazine featuring three men -- Robert Rubin, Alan Greenspan, and Larry Summers -- with the agitated headline "The Committee to Save the World". Alas, this 38th episode of Making Sense continues the long tradition of unease found in the Western canon regarding the female triumvirate.
Yes, of course The Graces -- Aglaea, Euphrosyne, and Thalia -- were lovely… but there was the rumor about them spending so much time in the underworld. No need to comment on the Harpies - a triad of vengeful, winged sisters. And who can forget The Witches of Eastwick: Susan Sarandon, Michelle Pfeiffer and Cher? They put your podcaster off cherries for the rest of the 80s. But it is Shakespeare who provides us the incomparable trio: the Weird Sisters. Better understood today as 'weyward' or 'weyard', they were the Anglo-Saxon Fates responsible for divination and predictions - what we call "economics" in modern day. Don't take this podcaster's word for it - listen to the Bard:
<<Macbeth, Act 4, Scene 1:>>
Round about the cauldron go;
In the poison'd policies throw.
Media, that report narrative
Days and nights as quantitative
Sweat inflation running hot
Boil thou first i' th' charmed pot.Double, double toil and trouble;
Fire burn, and cauldron bubble.Soul of financial…
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The Case of the Missing Money
30 november 2020 · 1 uur 7 min
“The Case of the Missing Money” is not an Arthur Conan Doyle short-story but instead a 1976 essay by well-known economist Stephen Goldfeld who noticed that there wasn’t enough money to justify the high level of economic activity at that time. Goldfeld explained that money was traditionally a simple function of, “real gross national product, [and] the interest rates on savings and time deposits at commercial banks and on commercial paper.” Lees meer
But that formula was suddenly producing “whopping”, “unprecedented”, “quite unacceptable” and “conspicuous” errors that stood out “like a sore thumb”. The clue to the mystery -- which he was not able to solve at the time -- was that the formula for currency was on target BUT the one for checking accounts was unreliable. The monetary format under the auspices of public institutions -- cash and coin -- was fine. But the monetary format that was the domain of private banks -- deposit accounts -- was way short.
But money WASN'T missing from the economy. Money as traditionally understood and defined by economists, THAT money was missing, but the market had broadened the definition in the 1960s and 70s by turning capital market securities into near-money, among many other evolutions. This suited the banks because, while they couldn’t print and mint official government money, they could ‘print and mint’ ledger ‘money’.
Just under half a century later the roles are reversed. A modern-day Goldfeld would note that official monetary formats like bank reserves are being created at a “whopping”, “unprecedented”, “quite unacceptable” and “conspicuous” pace that stands out “like a sore thumb”. But because the vastly more valuable private bank ledger balances are way short, our global economy suffers for it. In this 37th Episode of Making Sense, Jeff Snider writes and solves three mysteries: "Japan: The Case of the Missing Inflation!", "Europe: The Case of the Missing Economy!" and "Treasury Bills! The Case of the Missing Money?
----------WHY…
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Recession Roulette
23 november 2020 · 54 min
Part 01: What can the late-19th century Long Depression (1873-96) tell us about the early-21st century Silent Depression (2008-2?)? We turn to Henry George, the author of the most popular economics book of all time to learn what he got right, got wrong and how it applies to the present. Lees meer
Part 02: An estimated 742,000 Americans submitted initial claims for unemployment insurance in the week ending November 14. That is 'worst all-time' prior to the 2020 experience and is wholly inappropriate EIGHT MONTHS AFTER the shock.
Part 03: Japanese banks are borrowing from US banks at healthy rates (reflation!). The Chinese currency is appreciating at a healthy pace (reflation!). But there are few quirks, odds, ends, bits and bobs that remain in the shadows of the eurodollar.
----------WHERE----------
AlhambraTube: https://bit.ly/2Xp3royApple: https://apple.co/3czMcWN
Deezer: https://bit.ly/3ndoVPE
iHeart: https://ihr.fm/31jq7cI
TuneIn: http://tun.in/pjT2Z
Castro: https://bit.ly/30DMYza
Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Pandora: https://pdora.co/2GQL3Qg
Breaker: https://bit.ly/2CpHAFO
Castbox: https://bit.ly/3fJR5xQ
Podbean: https://bit.ly/2QpaDgh
Stitcher: https://bit.ly/2C1M1GB
Overcast: https://bit.ly/2YyDsLa
PlayerFM: https://bit.ly/3piLtjV
PocketCast: https://pca.st/encarkdt
SoundCloud: https://bit.ly/3l0yFfK
ListenNotes: https://bit.ly/38xY7pb
AmazonMusic: https://amzn.to/2UpEk2P
PodcastAddict: https://bit.ly/2V39Xjr----------WHAT----------
The Economic Emergency In 2020 and Beyond Won't Be Covid: https://bit.ly/332eI0R
Progress and Poverty by Henry George, fifth edition (1881): https://bit.ly/390ZjBH
It Will Have To Be Our New Weekly Ritual: https://bit.ly/39aL90K
Making Sense's Review of Economic Symmetry: https://youtu.be/yGOiHqVdE_M
Redistributing A Shrinking Pie Is Nothing Like A Flood; Because There Was No Flood: https://bit.ly/338Bwfg----------WHO----------
Jeff Snider, Head of Global Investment Research for Alhambra Investme… -
Team Disorder Wrassles the Economy
18 november 2020 · 1 uur 7 min
PART 01: US Treasury yields have risen on positive news, especially following the CoVo Vax news from Pfizer. Does it mean reflation has begun? Does it mean the 40-year bond bull market is dead? What do other economic accounts say? Lees meer
PART 02: America's unemployment rate plummeted from 14.7% to 6.9% in six short months! But it's the same 2010-15 mirage. Even the Federal Reserve doesn't believe it - that's why they edited away the idea of "full employment" in August 2020.
PART 03: Communists in Beijing have a better grasp of the world economy's direction than the capitalists in Washington, London and Brussels. Beijing's 14th Five-Year Plan hints at an isolated Chinese economy, an island unto itself.
----------WHERE----------
AlhambraTube: https://bit.ly/2Xp3roy
Apple: https://apple.co/3czMcWN
Deezer: https://bit.ly/3ndoVPE
iHeart: https://ihr.fm/31jq7cI
TuneIn: http://tun.in/pjT2Z
Castro: https://bit.ly/30DMYza
Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Pandora: https://pdora.co/2GQL3Qg
Breaker: https://bit.ly/2CpHAFO
Castbox: https://bit.ly/3fJR5xQ
Podbean: https://bit.ly/2QpaDgh
Stitcher: https://bit.ly/2C1M1GB
Overcast: https://bit.ly/2YyDsLa
PlayerFM: https://bit.ly/3piLtjV
PocketCast: https://pca.st/encarkdt
SoundCloud: https://bit.ly/3l0yFfK
ListenNotes: https://bit.ly/38xY7pb
AmazonMusic: https://amzn.to/2UpEk2P
PodcastAddict: https://bit.ly/2V39Xjr----------WHAT----------
Vaccine-phoria: https://bit.ly/3pnufSB
No Time For Pfizer, Europe Heads Back: https://bit.ly/38GnchV
Where Is It, Chairman Powell?: https://bit.ly/3eVWiDA
Good Payrolls Still Say Slowdown: https://bit.ly/32GaxaE
Slowdown In The Rebound; Stop Listening To Central Bankers: https://bit.ly/3psbbT1
QE Didn’t JOLT (again): https://bit.ly/2UswUfw
Xi Jinping Is Mao, Only For His Focus to Be On Technology: https://bit.ly/35ubOnf
The Prices And Costs Of What Xi Believes He’s Got To Do: https://bit.ly/32E1SWr
Moving The Bird Back Into Its (Old) Cage: https://bit.ly/35tDkB4----…
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Social Contract
11 november 2020 · 1 uur 2 min
A social contract is the agreement between government, business, wealthy and ordinary households in how to apportion the costs and benefits of society. The recently concluded (?) American election comes to mind, as a potential first step towards a new (green?) deal. In this, the 34th episode of Making Sense, Jeff Snider identifies another, less obvious freshly fashioned contract: China and its recent 14th Five-Year plan. But as Snider explains, question marks are not unique to democratic republics -- communist 'republics' have them too. Lees meer
The most successful, contemporary social contract your podcaster is aware of are the early-2000s Hartz Reforms in Germany. Listeners may be surprised to learn that before them today's "economic engine of Europe" was the "sick man of Europe". The decade-long assimilation of East Germany had taken a heavy toll and unemployment levels would breach more than 10% -- in 2004! The new social contract ensured employment in return for low-wage growth that favored business. So, success doesn't mean cost-free. But we've always known that; remember the story of one of humanity's original contracts?
As we learn in Exodus, Moses had to introduce The Commandments twice; the stone tablets were angrily shattered in the first attempt! And by the time the second draft was presented the scene was rather tense. Firstly, God was annoyed as all get-out to see Moses again -- what, he doesn't have anything else to do other than hew stone tablets? Secondly, Moses was ill-tempered that he couldn't leave the chosen people alone for a few days before they started chugging flagons like Frank the Tank. Lastly, the people, like the teenager unable to thread the needle in a way that explained bongs and brassieres strewn across the yard to her parents, were anxiously awaiting judgement.
When Moses returned for the second time the apprehensive throng gathered before him. Moses announced, "I have good news and bad news. The good news is, I got him down to ten." And…
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Eurodollarween
2 november 2020 · 55 min
Broadcasting from the kingdom of NYE, I'm Art Bell and this is Coast to Coast AM from the great beyond. Tonight we'll talk to General Johnson Jameson from his bunker complex beneath the Saskatchewan crust, as to whether Y2K can still happen. Then... 'Do you want to believe?!' The government doesn't want you to. Chris Carter, creator of the X-Files, will tell us exactly which episodes the government didn't want you to see. Also, Rod Sterling will join me live in studio... well in a manner of speaking. Was the Twilight Zone a documentary that had to be presented to the public as fiction...? Lees meer
Our time on Earth is indeed, very short. No matter how old or young you are, you are a tiny slice of the cosmos' plan. You're here for a very, very short time. We all are. And the big question of course is, what happens after we end this physical life... or it is ended, however you have it. It's a big question. And October, of course, is a great time to explore that question because one of the main things you look for is some - any evidence of life beyond the physical. The supernatural, the apparition, the unexplained, the Kachina doll that seems to move around the house by itself...
There's no place more spooky and unexplained than central banking and the monetary order. Let us then enter another dimension. A monetary realm. Let us turn to the wildcard line. Jeff, Emil... can you hear me? This is Art Bell.
----------WHERE----------
AlhambraTube: https://bit.ly/2Xp3roy
Apple: https://apple.co/3czMcWN
iHeart: https://ihr.fm/31jq7cI
Castro: https://bit.ly/30DMYza
TuneIn: http://tun.in/pjT2Z
Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Breaker: https://bit.ly/2CpHAFO
Castbox: https://bit.ly/3fJR5xQ
Podbean: https://bit.ly/2QpaDgh
Stitcher: https://bit.ly/2C1M1GB
Overcast: https://bit.ly/2YyDsLa
PocketCast: https://pca.st/encarkdt
SoundCloud: https://bit.ly/3l0yFfK
PodcastAddict: https://bit.ly/2V39Xjr----------WHAT----------
A True Horror Tale: https://bit.ly… -
The Unit Root
26 oktober 2020 · 55 min
The bread of this podcast hotdog features Jeff Snider putting into context how far behind the times monetary authorities are, and that all may not be as it seems with the appreciating Chinese currency. But the middle, the wiener if you will, is about the unit root. But please! Before you throw your device across the room in disgust rather than listen to yet another podcast about monomial equations and non-stationary processes realize that it's all about econometricians assuming economies do not suffer permanent shocks. The assumption that an economy must experience a recession AND a recovery. Lees meer
A 1993 paper by Milton Friedman averred the data showed this is how economies operated, and indeed they did -- in the post-WW2 experience. Friedman referenced an earlier work of his, from 1964, with data that stretched over a longer period that ALSO showed this. And indeed, the 1879 to 1961 period does, as long as you exclude the war cycles and 1945 to 1949 because, as Friedman put it "of their special characteristics." So, if your podcaster understands this correctly, if you exclude permanent shocks and data discontinuity then one is welcome to assume no permanent shocks.
Now, your podcaster is admittedly missing something here. For one, he's missing econometricians' razor-sharp intelligence. Second, he hasn't won a Nobel in economics - not yet at least. The cost of this lacuna is that shoelaces give him trouble - all his trainers and loafers have Velcro. Simultaneous gum chewing and walking results in emergency trips to the dentist. And hot dogs are eaten with the bun in one hand and dog in the other. But the benefit of not having a towering intelligence is not falling prey to hubris. In believing intricate mathematics model out permanent shocks. In believing that it can go back to the way it was. The year 2008 was a permanent break. Like 1914. Like 1929. Like 1945.
----------WHY----------
PART 01: How many years behind are regulators, from the leading edge of money? Cons… -
Bank of Japan, the Monetary Recon Team
19 oktober 2020 · 1 uur 6 min
American economist and New York Times columnist, Paul Krugman entered the economics profession to follow in the footsteps of Hari Seldon, a psychohistorian living on Trantor, approximately 10,000 years into the future. Seldon, psychohistory and Trantor are all from Isaac Assimov's Foundation series published between 1951 to '53. Seldon used, "the mathematics of human behaviour to save civilisation," as Krugman put it. Admittedly, "economics is a pretty poor substitute", muses Krugman, "[b]ut I tried," he says. Many would say he's done so very successfully having been awarded the Nobel Memorial Prize in Economic Sciences for his contributions to New Trade Theory and New Economic Geography. Lees meer
Is he the best psychohistorian alive? Your podcaster does not think so - they hand out those Nobels like candy. No, the best is Hungarian-American George Friedman, the geopolitical strategist. As proof this podcaster offers his 2009 book titled: "The Next 100 Years". Sure, Seldon forecasted the next 1,000 for the galaxy, but still, who on Earth is offering an outlook for the next century?
In Friedman's book, Japan plays a very prominent role, second only to the United States. In macroeconomics and monetary policy Japan plays a central role too. It is the scout. Recon as the Americans call it; recee to the Commonwealth. The Bank of Japan is about seven years ahead of the main central banking force. And it's waving back at everyone to, 'Stay back! Don't come this way!' Is the warning lost in translation? Is it ignored?
Spanish essayist George Santayana famously noted, "Those who cannot remember the past are condemned to repeat it." But your podcaster prefers Friedman's quip that, "Studying history has little practical utility in averting past outcomes. We are doomed to repeat history whether we know it or not."
----------WHY----------
PART 01: Central banks regulate money supply - the Federal Reserve does not. The Fed does not control US dollars. Consider what came of Fed resear… -
QE2 Syndrome: Making Economics Errata
12 oktober 2020 · 56 min
As your podcaster put the finishing touches on Episode 30 word came down from up-on-high: 'We need to do errata!' Lees meer
Yes! Finally! This podcaster's long-time goal would be a reality: to make economics erotic again. To tell the world that economists can stimulate. To inform that offshore bankers do it in the shadows. To broadcast that technical analysis has the best curves with those plunging chart necklines. The undulating data and heaving economic activity. Going long Treasuries. Wanting yield. Oh yeah, pile that yield on... yeah, high and deep... yeah, yeah...
Alas, when the new intro copy was handed in for proofreading this podcaster's confusion was laid... bare. Errata? It's all about copy-editing. And mistakes. The ancient Latin word is plural for erratum, "a correction of a published text." And indeed, in part three of this episode, the article under discussion was originally printed as, "Inflation Targeting: You Can Me Al". Wha? It should have been "Inflation Targeting: You Can Call Me Al".
And that's not all. Closely related to errata is corrigenda, a plural Latin word, "for a thing to be corrected, typically an error in a printed book." Whereas an erratum is, as a general rule, issued for a production error, a corrigendum is a mistake by the author. And, in part three, Jeff Snider and I introduce Al Broaddus, the former Federal Reserve Bank of Richmond president. And when we segue to a quote about inflation targeting by Fed Governor Edward M. Gramlich, instead of attributing it to Gramlich, we continue to refer to Broaddus! We hope you forgive the erratum and the corrigendum and how we piled them high and deep in this episode... ooh, yeah.
----------WHY----------
PART 01: $1,200 direct cash payments is not stimulus, it is "relief aid"; these are "alms" given to the poor, needy and those harmed by both the virus and the government-mandated shutdowns of the economy. We review the state of the American labor market, European furlough programs, and conclude v… -
Carrying the Yen Carry Trade into the Light
5 oktober 2020 · 56 min
Advanced-economy money centers make the world go round. In the early 1800s London and Paris funded globalization cycles. Berlin and Vienna joined the exclusive club as the century waned; New York at the start of the next. Today, East Asia's cities are members, including Singapore and Hong Kong. But the 800-pound sumo wrestler of the Pacific basin is, and has been, Tokyo. Lees meer
Some speculate it was there at the beginning of the eurodollar, putting overseas dollars, held by WW2 service members, to work. The subsequent, multi-decade growth miracle established Tokyo's financial prowess. The 1980s brought disturbance early - the LDC Crisis - and euphoria later - the baburu keiki. When the bubble burst Japan's dollar borrowings from US banks dropped by more than three-quarters by the end of the 1990s.
Then, in 1999, the Bank of Japan implemented the first modern zero interest rate policy. In 2001, the first quantitative easing. From it's 1999 low Japan's dollar borrowings from US banks doubled by 2004. Then doubled again by 2009. Then doubled again by 2011.
In part three of this, the 29th episode of Making Sense, Jeff Snider explains Tokyo's role in the rise of a synthetic dollar empire and how disturbances within it, in early-2014 and late-2017, set off the third and fourth eurodollar crises. But first, thoughts about the rising appeal of socialism and words about the modern-day monetary tension between the ideas of 18th-century Scottish philosopher David Hume and 19th-century American financier Jay Cooke.
----------WHY----------
PART 01: Dick Costollo said, "Me-first capitalists who think you can separate society from business are going to be the first people lined up against the wall and shot in the revolution. I'll happily provide video commentary." Jeff Snider explains the historical context of Marxist agitation against Capitalism.PART 02: Over the ages legendary philosophers have offered their thoughts on the nature money. This episode focuses on two - David Hume …
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Interview: Brent Johnson
27 september 2020 · 46 min
In 1969 Johnny Carson was hosting The Tonight Show and, in one particular episode, Bob Hope headlined. After Carson finished interviewing Hope he called out his next guest, George Gobel. To everyone's surprise the person that walked out on stage was most certainly not Gobel. It was none other than the Italian Crooner himself, Dean Martin. Now, as was Martin's style in those days, he was already two cognacs into the next day's hangover, which made for a rocking good show. Eventually Gobel did make it out on to the set. When he finally did, he complained to Carson, 'Having to come on last! Having to share the stage with legends!' Lees meer
He turned to the cameras and asked, "Do you ever get the feeling... do you ever get the feeling that the whole world was a tuxedo, and you were a pair of brown shoes?" In this, the 28th episode of Making Sense, Jeff Snider and Brent Johnson talk fin de siècle political-economy while Emil Kalinowski holds up a pair of egregious brown brogues.
----------WHERE----------
AlhambraTube: https://bit.ly/2Xp3roy
Apple: https://apple.co/3czMcWN
iHeart: https://ihr.fm/31jq7cI
Castro: https://bit.ly/30DMYza
TuneIn: http://tun.in/pjT2Z
Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Castbox: https://bit.ly/3fJR5xQ
Breaker: https://bit.ly/2CpHAFO
Podbean: https://bit.ly/2QpaDgh
Stitcher: https://bit.ly/2C1M1GB
Overcast: https://bit.ly/2YyDsLa
SoundCloud: https://bit.ly/3l0yFfK
PocketCast: https://pca.st/encarkdt
PodcastAddict: https://bit.ly/2V39Xjr----------WHAT----------
OK, Bank Reserves; Let’s Do This One More Time: https://bit.ly/3hXhJ7m
Taking You, The Fed’s Bank Reserves, And Banks’ Checkable Deposits For A Quick Stroll In The Monetary Zoo: https://bit.ly/3i4du9P
A Good Time For Some Q & A: Bank Reserves, Treasury Auctions, MMT, and the Monetary Resolve: https://bit.ly/3mLPrjE
Alhambra Investments Blog: https://bit.ly/2VIC2wW
RealClear Markets Essays: https://bit.ly/38tL5a7----------WHO----------
Jeff Snider, Head of Global I… -
Duck and Cover
20 september 2020 · 57 min
US President Harry Truman prosecuted the war to its conclusion, finishing his predecessor's near-impossible task. Then, with bitter irony, History reversed his role as "anchor" for the Second World War into "lead" for the third. As the trilogy approached its near-miraculous end decades later, one could hear an echo of a Truman slogan - “Education is our first line of defense” - in the 1980s cartoon GI*Joe that averred, “Knowing is half the battle.” Both aphorisms are twigs coming off the "Knowledge is Power" branch. And the trunk itself? A tree of the knowledge of good and evil with roots stretching to the genesis. Lees meer
More recently our physicists have been informing us of hard limits to our knowledge - uncertainty principles, incompleteness theorems - butressing Socrates' statement that, "The only true wisdom consists in knowing that you know nothing." Still, bounded knowledge is a poor excuse for apathy, and in 1951 Truman signed into existence an agency whose purpose was to prepare American citizens for nuclear war. "Knowledge is not only key to power. It is the citadel of human freedom," he said.
In this 27th episode of Making Sense, Jeff Snider reveals that Truman's agency's most iconic result was that of a cartoon turtle named Bert. It may sound startlingly silly to the 21st-century ear, but educating citizens to turtle up, to duck and cover at the first instance of a flash made sense at that particular time. At least, up to the point when weapons, and thus circumstances, evolved. Similarly, the Federal Reserve's monetary policies made sense, up to the point when money, and thus circumstances evolved, which, coincidentally enough, began in Truman's time.
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PART ONE: What can 1950s preparations for nuclear war tell us about monetary policy in 2020? Well, that some preparations - such as "Duck and Cover" - made sense, up to the point when circumstances evolved. Similarly, the Fed's bank reserves made sense, up to a point.... long since pass… -
Decade of Disorder? It's "Transitory"!
14 september 2020 · 52 min
How much is several? What is a few? If you were to put a numerical value on "probably" would it be more, or less, than "likely"? To your podcaster's great consternation the linguistic gatekeepers of Middle English appear to have been rather disinterested about it all. And so, people are constantly late... or early! 'I thought we were to meet in a few hours?' 'No! It was several.' 'Oh, right.' Women seem to revel in these nuances, arriving for a date with this podcaster when it pleases them and then claiming etymological immunity. Lees meer
Which brings us to the word transitory. Admittedly there is SOME lexicographic nuance: momentary, transient, impermanent, temporal. However, the Federal Reserve - like the proverbial camel - stuck its thesaurus-nose into that nuance and CHARGED into the economic-tent of the past decade. Why did the 2009-10 Green Shoots recovery fail? Transitory European Sovereign Debt Crisis, gummed Bernanke. Why did the economy swoon in the first quarter of 2014? Transitory Polar Vortex, chomped Yellen. Why did inflation not accelerate despite 'full-employment'? Transitory cellular data-plan price war, gnawed the FOMC. Why was Globally Synchronized Growth tripped up? Transitory political trade wars, chawed Powell.
So here we are, 10 transitory-filled years later. Now, unless there are glaciers listening to this podcast - and it needs all the ratings assistance it can get - it's likely the audience is in unanimous agreement that the definition of "transitory" has been tortured to death. Indeed, the Federal Reserve agrees! And Transitory has been retired. Or cremated. Still, instinct informs your podcaster that much like our zombie economy, the excuse is undead and Transitory will walk again!
----------WHY----------
PART 01: A great improvement in the US unemployment rate (JUL: 10.2%, AUG: 8.4%) suggests the Reopening Boom hints at economic recovery. UNFORTUNATELY, we have heard this story before -- indeed, for over a decade. Other employment data imply … -
Give Us More Time!
7 september 2020 · 52 min
Last week, current and former Federal Reserve officials offered a mea culpa, saying the timing of the 2015-18 rate hikes may have curbed a potentially quicker recovery from 2008. Apparently, seven to ten years is not enough time. Lees meer
Well then, if time is the problem your podcaster will take a page out of Hugh Hendry's book. Recently the early-21st century Scottish philosopher suggested the Fed would be taken seriously at its attempt of irresponsibility if it was headed by the funny, mixed martial artist, media-sensation Joe Rogan. Why not then filmmaker Christopher Nolan? He offers Rogan-style pyrotechnics, plus he knows his way around time. In Memento he reversed it, telling the story from back to front. With Inception he slowed it down - allowing multiple realities to exist simultaneously. Interstellar showed him capable of harnessing no less than the gravity well of the black hole Gargantua to 'steal' decades of time. And in his latest opus - TENƎT - Nolan folds all of these ideas into the same movie. Not just the same movie, but the same frames! Entire sequences are shown with characters and objects sharing the same space but not the same eddies of entropy.
Hopefully the point survives the exaggeration. A true, fundamental overhaul is long overdue and recently the Federal Reserve did perform just such a review at the end of which it announced a new, grand strategy. In this, the 25th episode of Making Sense, while we wait for Rogan, Nolan or Deus-forbid anyone with authority, Snider offers his review of the new, grand strategy.
----------WHERE----------
AlhambraTube: https://bit.ly/2Xp3roy
Apple: https://apple.co/3czMcWN
iHeart: https://ihr.fm/31jq7cI
Castro: https://bit.ly/30DMYza
TuneIn: http://tun.in/pjT2Z
Google: https://bit.ly/3e2Z48M
Spotify: https://spoti.fi/3arP8mY
Castbox: https://bit.ly/3fJR5xQ
Breaker: https://bit.ly/2CpHAFO
Podbean: https://bit.ly/2QpaDgh
Stitcher: https://bit.ly/2C1M1GB
Overcast: https://bit.ly/2YyDsLa
SoundCloud: https://bit.ly/3l0… -
The Discovery of Oz
31 augustus 2020 · 50 min
"I am Oz, the Great and Terrible. Why do you seek me?" They looked again in every part of the room, and then, seeing no one, Dorothy asked, "Where are you?"
"I am everywhere but to the eyes of common mortals I am invisible. I will now seat myself upon my throne, that you may converse with me."
"We have come to claim our promise, O Oz."
"What promise?" asked Oz.
"You promised to send me back to Kansas when the Wicked Witch was destroyed.
"And you promised to give me brains," said the Scarecrow.
"And you promised to give me a heart," said the Tin Woodman.
"And y'all promised to give me courage," said the Southern Lion.
"Dear me, how sudden! Well, come to me tomorrow, for I must have time to think it over."
"You've had plenty of time already!"
"We shan't wait a day longer!"
"You must keep your promises to us!"
The Lion thought it might be as well to frighten the Wizard, so he gave a large, loud roar, which was so fierce and dreadful that Toto jumped away from him in alarm and tipped over the screen that stood in a corner. As it fell with a crash they looked that way, and the next moment all of them were filled with wonder. For they saw, standing in just the spot the screen had hidden, a little old man, with a bald head and a wrinkled face, who seemed to be as much surprised as they were. Our friends looked at him in surprise and dismay.
"I thought Oz was a great Head," said Dorothy.
"And I thought Oz was a lovely Lady," said the Scarecrow.
"And I thought Oz was a courageous Bernanke," said the Tin Woodman.
"And I thought Oz was the Greenspan Put," exclaimed the Lion.
"No, you are all wrong," said the little man meekly. "I have been making believe."
"Making believe!" cried Dorothy. "Are you not a Great Wizard?"
"Hush, my dear, don't speak so loud, or you will be overheard--and I should be ruined. I'm supposed to be a Great Wizard."
"And aren't you?"
"Not a bit of it, my dear; I'm just a common man. My dear friends, I pray you not to speak of these little things. Think … Lees meer -
The Dollar's Premature Obituary
23 augustus 2020 · 1 uur 3 min
Magrathea. It is one of legendary, advanced-economy planets of the human imagination sitting along side Asimov's Trantor of the Foundation Series, and Cybertron, home of the Autobots and Decepticons. Sure, there are other fabled worlds like Cameron's Pandora, Besson's Fhloston Paradise Herbert's Arrakis, but these are - let's be honest - emerging economies. What made Magrathea a galactic leader in economic complexity is that it WAS a planet-building planet. Lees meer
As we learn in Douglas Adams' Hitchhiker's Guide to the Galaxy, Magrathea has been missing for five million years. By the time we join the story it is considered long dead. The only being who believed it still existed was the two-headed Galactic President / confidence man. And, after some LIGHT-piracy, MILD-conscription and heavy-improbability, our party of protagonists discover the planet all but deserted.
Actually, not deserted. Asleep. You see Magrathea's product was a "luxury commodity" - none of this off-brand, pseudo-planet stuff like Pluto. Well, "five million years ago the Galactic economy collapsed... the recession came and [they] decided it would save a lot of bother if [they] just slept through it. So [they] programmed the computers to revive [them] when it was all over... The computers were index-linked to the Galactic stock-market prices... so that [they'd] be revived when everybody else had rebuilt the economy enough to afford [their] rather expensive services."
Now dear listener, you anticipate this set up is likely in reference to our own 5-million year recession - now in its 13th year. Or perhaps a nod to our own computer modeling gone berserk. No ladies, gentlemen and galactic visitors, this 23rd episode of Making Sense is about the premature obituary. Magrathea wasn't dead, merely dozing. Our own Earthly list of rash declarations are just as entertaining.
British musician Dave Swarbrick, after visiting a local township, was declared dead by the Daily Telegraph to which he quipped: "It's no…
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What are they thinking?
17 augustus 2020 · 1 uur 1 min
The final setting of Margaret Atwood's The Handmaid's Tale occurs well into the future, at a symposium of historians examining the Handmaid era. Your podcaster expects a similar, future gathering of sober scholars evaluating the Time of CoVid. They'll likely conclude it was an economic and political bankruptcy - a mathematical and moral fiasco. Still, it wasn't all bad, and this podcaster imagines that sitting at the back of the room a lowly assistant will indecorously interrupt proceedings with, "At least the Funny Flu allowed Cannonball Run that stood for ages!" Lees meer
Before security could be called to escort this violator of stodgy proceedings out the banquet room - the iconoclast would blithely explain, that the Cannonball is an unofficial, entirely illegal 2,800 mile (4,500 kilometer, but who knows with inflation these days) car race from New York City's Red Ball Garage to the Portofino Hotel in Los Angeles. That the pre-'Rona record was 27 hours, 25 minutes. That with Captain Trips clearing the roads of grandmas, convoys, smokey, panda and the fuzz the new record was set at an eyelid-peeling 25 hours, 55 minutes. And that two general documentaries were already released on the subject, including Cannonball Run II - which is in your podcaster's sincere, very unprofessional opinion the best documentary ensemble cast ever, including stars: Burt Reynolds, Dom DeLuise, Dean Martin, Sammy Davis Jr., Shirley MacLaine, Frank Sinatra, Marilu Henner, Aristotelis Savalas, Catherine Bach, Susan Anton and Jackie Chan, among others.
And it is the idea of the "ensemble cast" that makes this 22nd episode of Making Sense a special one. We try to answer three questions: which paradigm do central banks inhabit, was Aristotle an idiot, are low rates stimulative? In trying to answer them we turn to Jeff Snider. But also, Aristotle himself, and Ben Bernanke, Benoit Mandelbrot, the Bride, Christopher Nolan, the Cohen Brothers, Cormac McCarthy, Eugene Fama, Henri Poincaré, Hugh Hendry, J…
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What's in the Monetary Toolkit?
9 augustus 2020 · 1 uur 1 min
Life is full of problems. And when particularly irritated by them, we turn to professionals for help. Sure, men - especially the married kind - will insist they can take care of it. Plumbing? No problem. The Johnson-rod is loose in the car? I got it. Open wound with compound bone fracture? Rub some dirt on it. Still, eventually even men will get to a point when they'll ask for directions, because what can be done - they built the city all wrong. And so, when the technical expert is called we damn well expect they've got a toolbox of specialized, effective gadgets. Lees meer
For example, those tooth-yanking sadists are expected to make small talk about The Marathon Man while utilizing a tray of mouth mirrors, sickle probes, scalers and saliva ejectors. Go to the stables and you'll see brushes, sweat scrapers, hoof picks, deworming pastes, fly bonnets and liniments that will give your mare that glossy finish. One expects the same of our monetary technocrats. Their toolkit - you'd EXPECT - to hold a printing press, bond certificates, gold, as well as maps and barometers identifying the specification, production, distribution and utilization of modern money.
In this 21st episode of Making Sense, Jeff Snider tells us what IS in the monetary toolkit after spending a professional lifetime reading meeting minutes, transcripts and speeches. What's in there? Yeah, Magic-8 Ball. A rubber duck. Prayer book, of course. Half-eaten egg-salad sandwich. And importantly, the phone numbers of financial journalists. Join us as we discuss the monetary toolkit through the lens of: China's unchanging foreign exchange reserves, credit conditions in the United States and PMI scores from around the world. Also, we end the show by holding a candle-light vigil for the 13th anniversary August 9, 2007. The day that the global monetary order malfunctioned. A day that the then-CEO of the British bank Northern Rock said, "the world changed." A day that The Guardian newspaper analogized to August 4, 1914 -…
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Strike 9! Will the Fed Ever be Called Out?
3 augustus 2020 · 52 min
Baseball. The nation's pastime. For well over a century the sport has nestled itself in the romantic nook of America's soul. Its greatness captured in sentimental movies like The Natural and Field of Dreams. But light is balanced with darkness and for all its majesty the sport bears scandals and self-inflicted wounds: the 1919 Black Sox, a racial barrier. And of course, there's that gray space between light and dark where tragi-comedy lies. The 1888 poem Casey at Bat. Yogi Berra's relationship with paradox and irony. The Red Sox and the 20th century. Lees meer
Like any phenomenon, the game has a full life that cannot be reduced to just one idea, one moment, one game. To do so would be the height of chutzpah and ego. So - let your podcaster oblige. The greatest game ever played was on February 2, 1946. Known as the Baseball Bugs game it took place in New York City's famed Polo Grounds where the Tea Totallers hosted the Gas-House Gorillas. The aged Totallers - one could even go so far as calling them elderly - were no match for the unshaven, cigar chawing players with shoulders as broad as the outfield placards. By the fourth inning the visitors were up: 96 to 0. So total was the farce that the home team turned to fans in the outfield for help. One such wasn't even a man. Or woman. It was a rabbit. Bugs Bunny.
He struck out the first Gorilla with fastballs. Then - well - he changed baseball history with a single, off-speed pitch that struck out the side as three Gorillas swung three times each before the ball reached the plate. Players ever since have attempted to recreate the throw. And though pitches such as the Fossum Flip, Super Changeup, balloon ball, parachute, gravity curve and the Monty Brewster have come close, nothing has been seen like that magical day in 1946. Nothing until America's central bank came up to bat on August 9, 2007.
For 13 years the Fed has been hacking away at the same pitch of monetary disorder. And unlike the Gas House Gorillas, apparently there…
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Gold, Dollar and Treasury battle Deflation, Disorder and Danger
27 juli 2020 · 54 min
Now, admittedly SOME commodity prices have gone up. Half of the agricultural and livestock prices are up year-to-date. Copper is up! But these are the results of supply line disruptions and demand surges. The temporary, transitory reactions to the CoVo. NOT the persistent, broad-based multi-year inflation carried in by a monetary surge that central bankers suggest. Almost every energy-based commodity is DOWN. Most all industrial metals are DOWN. Lees meer
We address the issue in three segments, in this, the 19th episode of Making Sense. First, gold's sauntering up to $2,000. Silver is looking lustily at $30. Inflation, right? Central bank printing, true? Politicians handing out stipends and stimulus, yes? NO! Gold has been rising regularly - in concert with sovereign bonds - since October 2018 signaling deflation, disorder... and danger.
Then in part two, America's dollar is said to be the global reserve currency. But might there be hostile nations scheming furiously to undermine the US dollar? They are, after all, selling US Treasuries on net, since 2014. Is there a dollar Pearl Harbor ahead? No. Precisely the opposite. It's the real reserve currency - the EURODOLLAR - that holds nations hostage, including the USA.
And finally, Federal Reserve officials are promoting the notion the central bank will allow inflation to run. Run pure. And hot! A Bloomberg opinion column called it "a whole new ballgame [baby!]" (I added the "baby!" part). We've heard this story before. Not only from the Fed but as children. From Aesop. We knew it then as, "The Boy Who Cried Wolf".
That's not Inflation's war cry. Not in this monetary disorder and economic depression. It's a publicity campaign. A caterwauling.
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The Fractured Flask
21 juli 2020 · 50 min
2008. Albuquerque, New Mexico. The first business meeting of what would become the best-known chemist team since Nobel-prize winners Molina, Crutzen and Rowland was not auspicious. Pinkman wanted to cook as an artist, with chili powder. White, called Pinkman's chili-p recipe -- garbage. In-turn, Pinkman dismissed White's science; all he needed was a big jar. He was actually referring to a volumetric flask, which as - the appalled chemistry teacher Mr. White responded - is for general mixing and titration you wouldn't apply heat to it. That's what a round bottom 5000 millilitre boiling flask was for. Pinkman's flasks almost certainly fractured often and leaked out. Lees meer
It is the metaphor of the fractured flask, the punctured pail - the leaking bucket - that Jeff Snider uses, in this the 18th episode of Making Sense, to explain why the inflationary concoction created by monetary technocrats isn't boiling over. First, we discuss why the Federal Reserve's monetization of debt isn't inflationary. Second, we review the latest inflation readings from the United States. Finally, Snider explains why the accelerating size of the US Treasury's checking account isn't inflationary either. It is all about the metaphor - technocrats and politicians pour inflationary water in yes, but not only is the bucket not a full one, ready to spill over, but it's perforated.
Well, to head off a letter writing campaign, this podcaster acknowledges that a fair number of you dear listeners feel your podcasting team missed the opportunity to employ the metaphor of the leaky cauldron. To cast central bankers as a coven of warlocks preparing a witches brew of inflation. However, your podcaster prefers the analogy of the fractured flask. The technocrats style themselves as scientists, not magicians. They surround themselves with very rare 800 millilitre Kjeldahl-style recovery flasks and dynamic stochastic general equilibrium models, Griffin beakers and Erlenmeyer flasks. The tragi-comedy is that des…
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Communism - Don't Call it a Comeback
12 juli 2020 · 49 min
Plato, Kant, Nietzsche, Buddha, Confucius, Rousseau, Aristotle, Bastiat, Molinari, Cicero, Hegel, Hobbes, Kant... LL Cool J. The contemporary philosopher sits on the social and political branch of the Western tradition. He began releasing treatises in 1985 after collaborating with Def Jam. Radio was his first. Two years later, Bigger and Deffer. But 1989's Walking with a Panther was 'too pop-y', said the Philosophical Review. 'So much empty fluff,' pondered the British Society for Phenomenology. Dialectica wouldn't even look at it. His fourth commentary however, returned him to the top. Both the album and its most famous song were titled Mama Said Knock You Out. The single famously begins with, "Don't call it a comeback, I been here for years". Lees meer
Singing that tune these days are Communism, Marxism and Socialism. In this, the 17th episode of Making Sense, Jeff Snider explains how to understand their philosophy and why their recent popularity is not a comeback despite the doctrine's body of work. Marxism was never gone, it was waiting for the club of mostly wealthy nations to reach the end of their capitalist potential. Well, a thirteen year depression on par with the 19th century's Long and the 20th century's Great depressions is making a good case. So then, how to counter the argument?
But that's for the back-half of the show. First, a Catch-22 like paradox in bond markets. Safe sovereign and risky corporate bonds both display falling yields. Why? We look back to the last worldwide depression for answers. Then, yield curve control. This podcaster has a feeling it'll be the must-have toy for central bankers by Christmas. We look back at the US experience with the policy during the 1940s. Then Marx, Lenin and Mao take the stage, grab the mic and start spitt'n.
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Don’t Low Rates On Junk Bonds Mean Fed-fueled Credit Bubble? No. Precisely The Opposite
Yield Cap History Is Rock Solid, Just Not At All In The Way They Are Telling You
Yield Caps = To…