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, 4 tweets, 1 min read
“Mr. Powell emphasized that the coming moves were aimed at maintaining a firm grip over very short-term interest rates.”

Coal mine, meet canary. wsj.com/articles/powel…
Jay Powell just told you that the Fed is having a hard time “maintaining a firm grip” on very short-term interest rates.

Seems like a good day to repost this.

epsilontheory.com/what-is-the-pr…
“Is it QE?”

That’s the wrong question.

“Can the Fed regain its credibility?”

That’s the right question. That’s the ONLY question.

I don’t think they can.
The world is starting to doubt the Fed’s stated price of money.

The Fed can (literally) paper over this doubt in the overnight repo market by shoveling limitless money at the doubters. And they will.

But where will this doubt manifest itself next? That’s the big trade.
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Ben Hunt
@EpsilonTheory
“What a fight over the local library in my hometown in rural Arkansas taught me about my neighbors’ go-it-alone mythology – and Donald Trump’s unbeatable appeal.”

Make. Protect. Teach. has something to say about this.

nytimes.com/2019/10/04/opi…
1 day after publication, this note has 2500 comments, almost all tsk-tsk’ng the locals in one way or another. Some of them are much harsher than that.

I get it. I feel the same way. It makes me ANGRY and SAD that this rural county does not support the local library.
Then again, this library is a freakin’ Taj Mahal that cost MILLIONS in a REALLY poor county. And now the locals are ANGRY and SAD that they must pay MOAR to keep it.

We’re ALL angry and sad, Arkansas locals and NYT readers alike, and we are ALL justified in our feelings.
Read 14 tweets
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Ben Hunt
@EpsilonTheory
My (apparently) (very) unpopular opinion: passive investing IS a bubble.

It's a behavioral bubble formed by the now universal belief that stocks will *always* go up over time.

A bubble = investors thinking they've figured out a "secret" that past investors somehow missed.
The only thing that pops this bubble is a popping of the now universal belief that stocks *always* go up over time.

Which is why capital markets must be transformed into political utilities.

Thus endeth the lesson.
It's so weird that prior to the 1960s and the expansion of Wall Street to Main Street, the ubiquitous belief in "stocks for the long haul" did not exist.

I guess we're just much smarter now.
Read 5 tweets
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Ben Hunt
@EpsilonTheory
Buffett letter TLDR: book value is for chumps, and we’re gonna financial engineer the hell out of this industrial conglomerate.

It’s exactly the GE pitch I heard ad nauseam from 2005+ ... the cultists can @ me all they want, but this IS the Jeff Immelt playbook.
In 2005, GE was an industrial conglomerate that desperately wanted to be thought of (and valued as) a financial services firm.

In 2019, BRK is a financial services firm that desperately wants to be thought of (and valued as) an industrial conglomerate.

Funny world, innit?
The BRK-as-investment-fund narrative ("we can buy companies w/your $100 billion in cash better than you can") is too hard to maintain today. With an industrial conglomerate narrative, Buffett can use the cash to buy back BRK stock hand over fist. Which is what he's going to do.
Read 6 tweets

Related threads

Profile picture
Call Paul's Boutique
@modernhomesla
~REPO-MAN~

4 1st time since 2008
central bank
injects funds
N2 money mrkts
after sudden
*shortage of cash

Pressures relate 2
shrtgs of funds
banks face
resulting from increase n
federal borrowing +
central bank’s decision
2 shrink size of its
securities holdings
in recent yrs.
Fed reduced
securities holdings
by not buying new ones
when they matured,
effectively taking money out
of the financial system.

So, there's that.

New York Fed
moved 2 inject $53B
N2 banking system
thru trannys known as
repurchase agreements, or repos.

wsj.com/articles/fed-t…
Bank said it would
inject up 2 $75B more📌
on Wed a.m.,
but many in mrkt
looking beyond that decision.

Eww👇
“Market will b waiting 2 see
if Fed makes this
more permanent part of playbook,”
says fuqq-face Beth Hammack,
Goldman Sachs Group Inc. treasurer.
wsj.com/articles/fed-t…
Read 18 tweets
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Allen Farrington
@allenf32
1. what is ACTUALLY happening in financial markets right now.

a thread.

TLDR: everything you think you know about economics is nonsense.
2. first of all, every time you hear about 'the economy' or 'growth', what you are being told is the rate at which consumption is increasing.

this is completely irrelevant to society's economic wellbeing.
3. if you want to increase your consumption, drain your savings and go on a cocaine binge.

if you want to increase your (and everybody else's) wellbeing invest your savings in attempts to multiply the productivity of labour.
Read 28 tweets
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Sam Bell
@sam_a_bell
(a) a 'thank you' for writing the book (amazon.com/Trumponomics-I…) and the op-ed (wsj.com/articles/the-f…)
(b) an elaborate ploy to get me to waste my next 12 hours on Moore clips
(c) a real thing

I think I am going with (a) but what do I know
i'm still skeptical this will materialize but looks like it may be (c) after all

I wonder if @realDonaldTrump knows that @StephenMoore is in favor of the QT
Read 146 tweets
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Keiko
@keikoinboston
1. Someone sent me a list of demands issued by students at Sarah Lawrence College, an elite liberal arts college in Yonkers, NY. A group of students calling themselves the Diaspora Coalition began a 24-hour occupation of Westlands (residence hall in main admin building) today.
2. The Diaspora Coalition demands for their #50YearsOfShame protest:
sarahlawrencephoenix.com/campus/2019/3/…
archive.is/aAjoN
3. Some Sarah Lawrence numbers:
- 2018-19 Tuition, room, other fees: $69,807 (meal plan additional $665–$2836)
- 2018 Endowment: $112m

Sources:
sarahlawrence.edu/financial-aid/…
archive.is/usK51

sarahlawrence.edu/student-accoun…
archive.is/AIJab

en.wikipedia.org/wiki/Sarah_Law…
Read 129 tweets
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Sam Bell
@sam_a_bell
Might have to do a thread on the WSJ editorial page views on monetary policy through the years
April 2008 wsj.com/articles/SB120…
"As the Fed's open-market committee meets this week, what the world wants is a revival of American monetary leadership. It wants the Bernanke Fed to stop the global run on the dollar, and that means declaring an end to its rate-cutting mistake."
June 2008 wsj.com/articles/SB121…
"The Fed's dollar indifference has sent an inflation shock through those dollar-linked economies...The result has been the largest decline in America's global economic influence since the 1970s."
Read 47 tweets
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Julie Laumann 🌎
@Otpor17
"Trump has used Harley-Davidson as an example of a US business that is being harmed by trade barriers. Yet Harley has warned consistently against tariffs, saying they would negatively impact sales"

Harley, hit by tariffs, shifts some production overseas apnews.com/6c8942f7363743…
Important issue highlighted by @riotwomennn: are tariff exemptions determined by bribes?

Corker: "22,000 companies have asked for exemptions.There is no basis to deal with them. Are they going to grant these exclusions based on political contributions?"
Trump’s trade war with the European Union is going to cost Harley-Davidson as much as $100 million a year and force the manufacturer to shift production out of the U.S. bloomberg.com/news/articles/…
Read 232 tweets

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