CNBC fact-checks Joe Biden, now that it doesn't matter

 But the article name-checks Donald Trump five times because he's an opponent of Fed decisions.

There's a whole movement out there that wants to End the Fed, composed of Republicans, Democrats, and libertarians, which CNBC is loathe to mention.

Many of them argue that the US 2-year Treasury Note should be the benchmark for the Federal Funds Effective Rate, not the whim of the Fed Chair and the Federal Open Market Committee, who are un-elected, well-connected, and VERY WELL PAID elites who watch out primarily for the interests of the banksters.

For example, despite the disastrous Zero Interest Rate Policy post-Great Recession, DGS2 resisted it and outran DFF throughout the period under Obama and Trump, and anticipated the recent inflationary outburst by starting to rise in the spring of 2021, a full year before the Fed moved to "combat inflation" by raising the funds rate in the spring of 2022. 

Similarly DGS2 also started to fall in November of 2023 despite no change to Fed policy, anticipating the recent decline of inflation rates by almost a year.

The role of the US Treasury Secretary, AS MUCH A CREATURE of the Executive as the Fed Chair, is also huge for interest rates because the Secretary decides how to divvy up the debt securities for auction by duration.

Biden's Treasury Secretary Janet Yellen has been in the news for driving up the issuance in T-bills to 22% when 15% has been customary, which has contributed to longer rates falling and stocks rising, just in time for the election.

But the costs of this have been dramatic, financing deficit spending at the highest rates and driving interest payments on the debt to the third spot in the budget, behind only Social Security and Medicare.

Janet Yellen: Sexual abuse of female employees at FDIC under Martin Gruenberg "totally unacceptable"

Treasury Secretary Janet Yellen signaled her displeasure, telling reporters Tuesday that “the kind of abuses that were documented in the report are a totally unacceptable way to treat employees at the FDIC and not in line with the core values of the Biden administration.” She stopped short, however, of joining Republican calls for his resignation.

 

More. 

Well now, they've been keeping that one pretty quiet in the media haven't they?

 

There's a different level of scrutiny for Republican appointees, until it gets so bad for Democrat ones that they can't avoid it any longer.

 

More like a stick-up, Janet

 Treasury Secretary Janet Yellen: U.S. Economy Is "Firing On All Cylinders," "Consumers Are Holding Up"

The dollar buys 16.23% less in March 2024 than it did when Joe Biden was inaugurated.

 

 

Lyin' Joe Biden's IRS is auditing the middle class, not the rich as promised

 Discussed here:

 "As of last summer, 63% of new audits targeted taxpayers with income of less than $200,000," reports the Journal. "Only a small overall share reached the very highest earners, while 80% of audits covered filers earning less than $1 million." ... 

Treasury Secretary Janet Yellen was a bit sassier. "Contrary to the misinformation from opponents of this legislation, small business or households earning $400,000 per year or less will not see an increase in the chances that they are audited," she wrote in a letter to Rettig. ...

The IRS had set a goal of hiring 3,700 new agents in the first year of boosted funding. Instead, in the first six months, they'd hired 34.

Awkwardly, "revenue agent staffing had actually decreased by 8%, or more than 650 employees, between the end of fiscal 2019 and March 2023," per a previous watchdog report. And it's not just hiring that's in trouble: The agency has completed just 33 percent of its fiscal year 2023 milestones outlined in its strategic operating plan, which is…tough given that the year is over.

The Hunter Biden special prosecutor, David Weiss, is the Delaware US Attorney appointed by Trump who signed off on the softball agreement thrown out by the judge in the first place

Merrick Garland's evil genius:

Appoint a screw-up appointed by Trump to place him and the Hunter investigation off the political stage at the Republican House hearings, and hope Weiss keeps screwing up. 

 

 

 

Weiss has long maintained that Garland hamstrung his investigation of Hunter Biden, but on the other hand Weiss let both Lesley Wolf and long time close Biden family operative Alexander Mackler work in his office to deflect the heat on Hunter Biden according to IRS whistleblowers, which just goes to show that a poor appointment is a poor appointment. In addition to going soft on Hunter Biden, the plea agreement Weiss originally negotiated with Hunter Biden gave him a get out of jail free card.

How did Weiss miss that and the judge didn't?

Judge Noreika specifically balked at that on July 26th, contrary to what most drive-by media want you to think the blowup of the agreement was about:

However, near the end of the diversionary agreement was a paragraph reading, in part, “The United States agrees not to criminally prosecute Biden, outside of the terms of this Agreement, for any federal crimes” committed by the first son for which the statute of limitations had not already expired. ... US District Judge Maryellen Noreika smelled a rat, complaining that she was not given a copy of the crucial paragraph until just before the hearing began.

More. 

Expect nothing satisfactory from Weiss' investigation going forward.

 

Communist babushka arrives in China seeking fellow travelers

 Janet Yellen arrives in Beijing on mission to find common ground for U.S. and China

The Fed chair was looking for evidence of transitory inflation for twelve months while actual, raging inflation was staring him in the face the whole time and he did nothing about it

 In his testimony yesterday, Jerome Powell said he uses a table of the last twelve months of 12-month readings of inflation.  In other words, year-over-year readings.

It showed him no evidence of inflation coming down, in other words, of inflation being "transitory".

"We're exactly where we were a year ago." In other words, yep, inflation is raging. It's not transitory.

If you aren't appalled by that, I don't know what to say.

In April 2021 inflation year over year was already at the 2008-level of bad, and the Fed chair decided to wait and see if it became a "problem".

 

 

 

 

 

 

 

He waited a year, until Mar 2022, to begin raising the main interest rate.

I'm sure the reason is that in April 2021 he was focused on the pandemic as the number one problem. Vaccine uptake reached its crescendo that month, and Jay was praising the COVID stimulus orgy to restart the economy.

But the pandemic wasn't his job. Stable prices is his job, and he let it slide because of the extraordinary circumstances.

Now we're in a whole other big mess. Gutting the bond market is going to be life-changing for far longer than the pandemic will be.

Here's the video from yesterday with the key interchange.

This is Trump's boy, by the way.

 

Not the rainy day your mother had in mind: Janet Yellen whips out her tin ear for politics, suggests you use your savings to weather inflation

Yellen: Recession Isn't Inevitable, Most Consumers Have "Buffer Stocks" Of Savings To Offset Inflation

Just 3,000 full-time jobs created in Aug 2019 as Trump bump runs out of steam

Full-time increased to 132.156 million in Aug 2019 from 132.153 million in July, an increase of just 3,000.  

Average full-time in 2019 at 50.3% of population is still well below the average two-decade experience of Americans between 1987 and 2008 when full-time averaged 51.8% of population. We can't even yet match the average cyclical high of 51.1% prior to 2008.

In August 2019 51.8% working full-time instead of the actual 50.9% would mean 2.23 million MORE people working full-time right now than actually do.

The spread between the 2019 average of 50.3% and the 1987-2008 average of 51.8% is even higher: 3.9 million MORE who could be working full-time on average this year but are not, simply because whatever broke after 2008 still isn't fixed, not by Trump, not by Obama, not by Republicans, not by Democrats, not by Bernanke, Yellen, Powell or by anybody else.

It's busted, I tell ya, but they still let legal immigrants in by the millions, not to mention illegals.

It's insanity.

Yellen is political, talk of a future put in the form of the Fed buying stocks last week was intended to backstop the market this month

And a buoyant market in October 2016 will only help Clinton.

Yellen should be impeached immediately.

Reuters reported here last Thursday, but no one is touching this story with a ten foot pole because they all want Hillary elected:

"It could be useful to be able to intervene directly in assets where the prices have a more direct link to spending decisions," she said, adding that buying equities and corporate bonds could have costs and benefits.

Hillary gets the best she can from Janet Yellen: Economy still too weak for the Fed to further normalize interest rates

Actually, the Fed is too weak morally to normalize interest rates, and won't move until after the election. A December hike if Trump is elected may well send the markets tumbling down, which you know will be blamed on his election, not on the Fed.

Meanwhile banks continue to get rich while impoverishing savers $100 billion quarterly since the end of 2008. That's $3.2 trillion they'll have robbed from the American people by the end of 2016.

Government of the banks, by the banks, and for the banks.

Politico reports here:

The Fed’s target rate is now just 0.25 percent to 0.50 percent, a remarkably low figure this late in an economic recovery that gives the central bank little room to maneuver should a new crisis or recession arise. So the Fed’s move avoids a market meltdown but offers fresh rhetorical evidence for Trump and other Republicans who argue that the economy is extraordinarily weak. ... Trump has also said that as president he would replace Yellen, whose term runs until February 2018. And he has ripped the Fed for creating what he has called a “false economy” with high stock prices but only modest wage gains and a very low labor-force participation rate.

At new book launch, Trump accuses Janet Yellen of keeping interest rates low to protect Obama's reputation

Donald Trump, quoted here by AP/Obama:

'"In my opinion Janet Yellen is highly political and she's not raising the rates for a very specific reason: because Obama told her not to," Trump said. "Because he wants to be out playing golf in a year from now, and he wants to be doing other things and he doesn't want to see a big bubble burst during his administration." ...

'The central bank decided in October to keep its key short-term interest rate at a record low in light of a weak global economy and slower U.S. hiring.'

Brian Wesbury is wrong: First rate hike will not be in six months

Brian Wesbury & Co. here says the first Fed rate hike is coming in six months (June) because "considerable time" has secretly meant six months to Janet Yellen all along. Dropping that phrase for the word "patient" signals that the six month timer has begun ticking.

OK, maybe so.

But if the employment numbers cool as I expect them to after the first of the year when all the part-timers hired recently are let go, the Fed will still be in the rhetorical catbird seat to delay a June rate hike indefinitely because of the language change, without looking like it has back-tracked on its plan.

Janet Yellen may have an "obsession with the labor market" but she is not stupid.

If Democrats and Republicans had been so obsessed, she wouldn't have to be. At least workers' lives matter to Janet Yellen, which is more than can be said for the usual practitioners of the dismal science.

Carnage in Commodities: Gold/Oil Ratio soars to 18.08

Gold continues to lose ground to plunging oil prices, making oil the preferred investment of the two, if you had to chose between them. Gold would have to plunge to 987.60 to restore the ratio to parity of 15 at the current price of oil, 65.84, or 17%.

Gold is presently about 200 off its 2014 high of 1385 (London fix), about 14%, while West Texas Intermediate Crude is down over 35% from its June close at 102.07.

The surging dollar in 2014 has been deflationary for commodities. Closing as low as 79.09 in early May, .DXY closed yesterday at 89.36, up almost 13% in just seven months.

Behind that no doubt has been the Yellen Federal Reserve's commitment to end QE, which it did in October, and the continued Republican stranglehold on spendthrift liberalism, creating positive fiscal conditions liked by markets. Federal revenues are at an all time high of $2.775 trillion in fiscal 2013 while outlays remain stabilized at about $3.5 trillion for each of the last five fiscal years in a row. At $3.4 trillion in fiscal 2013, the often ugly dance between a Republican House and a Democrat Senate and Executive has meant that federal spending has risen only 2.75% in nominal terms for each fiscal year since the 2008 baseline. The S&P500 is up over 12% year-to-date on top of last year's stellar 32% gain.

The permanency of the Bush tax cuts and the AMT fix which heralded in the new year in 2013 continue to work their magic in combination with the stronger dollar and Washington gridlock, for which neither John Boehner nor Barack Obama will ever get their due.

What a country.

Market cap to GDP ratios March 2009 vs. March 2014 flash valuation warning

Probably the broadest measure for stock market valuation purposes is total stock market capitalization divided by GDP. Warren Buffett uses it and John Hussman has spoken approvingly of the measure.

But because we have to wait for GDP numbers for at least a month after the quarter end, the ratio cannot be a real-time valuation tool. And given that revisions to GDP can be substantial in the 2nd and 3rd estimates, as well as in the annual summer revisions, precision using the 1st estimate is also wanting. Nevertheless the calculation provides a big picture snapshot of where we have been in the market cycle, and gives forward guidance for long term investors. Presently it appears to counsel taking chips off the table and waiting in cash for a better opportunity to invest. 

For the following I use nominal figures for GDP as revised in the most recent updates from bea.gov and calculate market cap using the popular Wilshire 5000 (level x $1.2 billion) as close to March 31 as practicable.

A comparison of March 2009 to March 2014 is instructive, since March 2009 was a pretty good buying opportunity both in terms of the absolute level of the stock market after its decline and the coincident Shiller p/e valuation which was about 13.3 on March 1. The ratio has almost doubled in the interim, indicating that now is probably not a good time to commit large new sums to stock markets. The current Shiller p/e begins the day at 26.31, which is also nearly doubled from five years ago.

That said, the 10 year Treasury presently pays just 69 basis points more than the dividend yield of the S&P500. At the October 2007 stock market high, the 10 year Treasury paid 276 basis points more than the dividend yield of the S&P500. You could argue the Fed caused the markets to crash by taking rates much too high in 2006 and 2007 and that Janet Yellen is bound and determined not to let that happen again anytime soon, meaning stock markets could have higher to go. Keep in mind that the inflation-adjusted all-time high of the S&P500 was 2045.09 on August 1, 2000. We're at 1962.46 this morning. 

March 30 2009

$10.32 trillion market cap

---------------------------------------------- = 0.72

$14.38 trillion GDP

March 31 2014

$23.99 trillion market cap

---------------------------------------------- = 1.41

$17.02 trillion GDP

Two members of the fascist oligarchy have a little fun with the rubes and pretend they're not part of it

"Are we still a capitalist democracy or have we gone over into an oligarchic form of society in which incredible economic and political power now rests with the billionaire class?" -- Senator Bernie Sanders, Socialist-VT

"And so I don't know what to call our system or how to -- I prefer not to give labels; but there's no question that we've had a trend toward growing inequality and I personally find it very worrisome trend that deserves the attention of policy-makers." -- Janet Yellen, Federal Reserve Chair

Read the Q&A here.

Janet Yellen's Fool's Errand: Finding A Way To Fix What's Supposedly Fixed

Everybody believes the financial crisis is over, but apparently Janet Yellen does not. She's more right than she knows, but that's a sign of something into which angels fear to look. This could be rough.

Quoted here:

Yellen said regulators must focus on ways to prevent another financial crisis. She spoke via video to a financial markets conference sponsored by the Fed's Atlanta regional bank.

"In 2007 and 2008, short-term creditors ran from firms such as Northern Rock, Bear Stearns and Lehman Brothers and from money market mutual funds and asset-backed commercial paper programs," she said. "Together, these runs were the primary engine of a financial crisis from which the United States and the global economy have yet to fully recover."

-----------------------------

Regulators specialize in keeping capitalism from cleansing itself through failure. According to this line of thinking, recessions are personae non gratae, and depression doesn't even exist as a conceptual category of the contemporary period. If one occurs, they call it something, anything, else, as in "The Great Recession". Bankruptcy? Fuhgeddaboutit. Until these are welcomed once again, that is, until reality penetrates into the penumbra of the reigning ideology, the zombie economics of the last 14 years are here to stay, or perhaps worse, and we shall continue to walk in the darkness.

Janet Yellen Is Not Certain That "Too Big To Fail" Has Ended

Quoted here:

“I'm not positive that we can declare with confidence,” she said, “that ‘too big to fail’ has ended until it's tested in some way.”

Just peachy.

"Ben Bernanke Has An Almost Unbroken Record Of Being Wrong"

Bye Bye Ben.

Seen here:

Ben Bernanke has an almost unbroken record of being wrong.

In 2006, at the zenith of the housing bubble, he told Congress that house prices would continue to rise. In 2007, he testified that failing subprime mortgages would not threaten the economy.

In January 2008, at a luncheon, he told his audience there was no recession on the horizon. As late as July 2008, he insisted that mortgage giants Fannie Mae and Freddie Mac, already teetering on the verge of collapse, were “ adequately capitalized [and] in no danger of failing.”

Following the Crash of 2008, Bernanke’s prognostications did not much improve. Nor did Yellen’s, who had also misjudged the housing bubble, and who became Fed vice chairman in 2010.

The two of them got the “recovery” they predicted, but the weakest “recovery” in history.

The NY Sun Reminds Yellen Congress Regulates The Value Of Money, Not The Fed

The wimps in the Senate are rolled yet again, but The Sun shineth, here:

What needs to be confronted is the scandal of Federal Reserve independence. Where in the Constitution does it say that monetary policy is supposed — or permitted — to be independent of politics? If the Founders of America had wanted the monetary power to be given to a body independent of politics, they could have given it to the Army or the Navy or the Supreme Court. But they sat down in Philadelphia and gave the power to “coin money and regulate the value thereof and of foreign coin” to, in the Congress, the single most political institution in the entire constitutional system.