Jim Sinclair’s Commentary
Counselling Trump on anything that is not an answer to a question from him in public could end up with the announcement,”You are FIRED.”
I heard Yra Harris might be available for a return to the “Chairman.” The only problem is Yra would do the correct thing, not the political thing.
Yellen who unfortunately ended up the Bag Lady for the two previous Fed Chairman is trying to hand the bag off to Trump even before he is officially President. Let’s see if he how he blocks this thrust. I suspect a spin and kick.
Yellen essentially states that front running an economic resurgence and its accompanying inflationary impact is the right course of action.
I assume she is now a soothsayer or oracle, peering into the future with the wisdom of the ages. We all knew, since childhood, that “assume” means making an ASS out of U and ME.
The problem here is that such foresight hasn’t been reliable in the past. The Fed had assumed massive QE would bring about an economic rebirth……it hasn’t.
“With the U.S. close to full employment, Yellen counseled Trump and the Republican-led Congress to be cautious in loosening fiscal policy through big tax cuts and spending increases.
Some other Fed officials have said they would expect to raise interest rates faster than otherwise planned if Congress provided more fiscal stimulus to the economy.”
But, she prefers to have corporations focus on productivity growth.
What’s that? Cutting staff, encouraging automation thereby eliminating jobs and lowering costs, utilizing fewer services from purveyors, and turning away from the banks’ lending function?
“She urged the new president and lawmakers to focus their efforts on steps that would increase productivity growth, which she said has been “exceptionally slow” and which is critical to the long-term vibrancy of the economy.”
I don’t know, I’m just a simply guy. I’m not an economist. But “Productivity” appears to be related to decreasing personnel, decreasing materials used, use of less capital and energy; all having a deflationary impact on the economy.
A measure of the efficiency of a person, machine, factory, system, etc., in converting inputs into useful outputs.
Productivity is computed by dividing average output per period by the total costs incurred or resources (capital, energy, material, personnel) consumed in that period.
I’m sure her intentions are legit and reasonable on the surface, in an academic way. But we’ve been mired in an economic recession for almost ten years. Something $10 trillion in QE couldn’t reverse.
Now that we may get a slight and in my opinion, temporary, blip in economic indicators, she tightens the screws.
Give the economy a fighting chance for survival before starving it off at the get go.
CIGA Wolfgang Rech
Yellen Signals Fed Won’t Be Cowed After Trump’s Election Victory
November 17, 2016
Federal Reserve Chair Janet Yellen signaled that the central bank wasn’t about to roll over in the face of Donald Trump’s surprise election victory last week.
She told lawmakers on Thursday that she intends to stay in the job until her term expires in January 2018 while extolling the virtues of the Fed’s independence from political interference.
She also defended financial regulations that the president-elect has attacked and cautioned both him and Congress against providing the economy with too much of a budgetary boost at a time when the Fed was already on course to raise interest rates.
Jim Sinclair’s Commentary
Compliments of GG at Silver Arrow partners
Italy’s Crisis Turns into a Multi-Headed Hydra
November 20, 2016
Bank stocks have surged just about everywhere since Trump’s election, with one exception: Italy. In the last month only one large Italian bank has seen its shares rise, and that’s the 500-year old bank at the center of Italy’s banking crisis, Monte dei Paschi di Siena, whose nearly worthless shares jumped to €0.24.
All the Wrong Signals
Shares of Italy’s other large banks have suffered heavy losses. Over the past week alone, shares of Italy’s largest bank, Unicredit, plunged 15%, as did the shares of Banca Popular and UBI Banca. Shares of Italy’s second largest bank, Intesa Sanpaolo, fell just under 10%.
The recent losses compound what’s been a miserable year for Italy’s banking stocks. The best performing stock is the investment bank Mediobanca, which is down a mere 24% for 2016. During the same period, Unicredit has shed over 60%, UBI Banca 65%, Banco Popolare 80%, and Monte dei Paschi 85%.