So once again the banks get a helping hand from the FED, and depositors in the US are guaranteed to an unlimited extent. But what of moral hazard?
And the markets now do not expect further rate rises, despite the inflation pressures in play. Yet perhaps there is a bifurcation between liquidity and rates, so perhaps the markets are not reading things right.
And once again the FED and Treasury proved Free Market Capitalism is dead!
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Tarric Brooker joins me for my last Friday afternoon chat for a month or so, as I relocate to the UK. For the reasons see here: https://youtu.be/7Nj6N_amn3Y
We discussed a range of viewers questions, for which thanks.
I have genuinely enjoyed my regular chats with Tarric, and rest assured we plan to continue them once I have relocated.
Meantime, you can see the charts on his Substack: https://avidcom.substack.com/p/charts-and-links-from-dfa-q-and-a
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Digital Finance Analytics (DFA) Blog
So Long, And Thanks For All The Fish! - With Tarric Brooker... [Podcast]
This is an edited version of a live discussion about the state of play relating to the Australian economy, housing and finances with Leith van Onselen, Chief Economist at Nucleus Wealth and Co-founder of Macrobusiness.
Where are interest rates headed, and what will the fall out be?
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
DFA Live Q&A: HD Replay Leith van Onselen: Economics Now
The RBA’s Statement on Monetary Policy, out today suggests inflation will run hotter for longer and real wages will continue to shrink into the foreseeable future.
Some politicians are pushing for the Governor to resign as analysts lift their forward thinking on rates. But what is really going on? In short no one wants to take responsibility for the mega stuff-up.
Ordinary people are being hit hard, and there is no immediate relief in sight.
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Digital Finance Analytics (DFA) Blog
Everyone Blames Someone Else For This Mess!! [Podcast]
Journalist Tarric Brooker and I chew over a range of audience questions in our Friday session today, from property prices and monetary policy to China demographics.
Thanks to all those who sent in questions. Tell us what you think of this format.
This is a edited version of a live debate between Senator Gerard Rennick and Economist John Adams as we examine economic and monetary policy, debt, and the role of the RBA and other regulators. How can we improve the economic outcomes for Australia, and Australians? Who is to blame for high inflation and home prices?
Original stream: https://youtu.be/DPZNSTeAFkk with chat.
US CPI came out pretty much as expected, with headline rates falling, thanks to significant falls in gas (petrol) prices at the pumps, despite rises in food and shelter costs.
The markets lapped this up sending the indices mainly higher. along with gold, while bond yields and the US dollar slid.
However, Fed officials were out in force saying rates need to run higher for longer, so once again out of step with market expectations.
Next signal will be quarterly earnings from Friday. Still more volatility ahead.
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An interesting report came out last December from the House Standing Committee On Economics, relating to the RBA and their recent questioning of Governor Lowe.
The report was a bit of a squib in that whilst it recognised some of the issues relating to monetary policy and interest rates, they skirted round the big issues of what caused the inflation in the first place, and the role of extended credit in inflating prices.
We discuss the report and its shortcomings.
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The latest edition of our finance and property news digest with a distinctively Australian flavour.
Any incoming data requires interpretation to make sense. And the truth is, factors like recency bias, expectations, and hopium can all influence how news is interpreted, and decisions made. We saw this on Friday when US markets read the data as signs of a slowing economy, and immediately went to the FED easing rate rises, despite earlier news that they are keeping at the rate rising until inflation is crimped. Treasury yields fell sharply as investors continued to price in the step down in the pace of rate hikes at the Fed’s meeting next month.
But I think the central bank will need to see further slowing of price increases in the December inflation report, due out next week, before deciding whether to slow its next rate hike. It raised rates 50 basis points in December.And future earnings expectations are likely overdone for now, so perhaps markets were one sided in their interpretation of the data. In the minutes from the Fed’s December meeting [released] this week, it was unanimous among members of the FOMC group that they are going to keep interest rates high all year long. We will see.
CONTENTS
0:00 Start 0:15 Introduction 0:30 Data is not Neutral 1:30 US Jobs Report and Macro 3:40 US Markets 7:40 Oil Down 10:20 Gas Down 12:35 Europe 14:00 China and Asia 18:00 “N” Shaped Recovery 19:00 Australian Market 20:19 Gold too high? 21:40 Crypto Bearish 23:25 Summary and Close
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