It was a crazy day with comments on trade and from Jerome Powell

Chris Temple wraps up today by discussing trade issues and Fed President Powell’s comments. First off we address the comments by Powell that the Fed is preparing to expand its balance sheet. The fact is that the balance sheet has been expanding over the past month already. We also look at the actions out of the US today that are pushing any probability of a trade deal significantly backwards.

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Comments:
  1. On October 8, 2019 at 4:42 pm,
    Nigel says:

    Good to know I’m not the only one that’s confused right now

  2. On October 8, 2019 at 5:05 pm,
    OOTB Jerry says:
  3. On October 8, 2019 at 5:07 pm,
    OOTB Jerry says:

    READ THE FULL LETTER…….it is a good one…….
    “President Trump and his Administration reject your baseless, unconstitutional efforts to overturn the democratic process. Your unprecedented actions have left the President with no choice. In order to fulfill his duties to the American people, the Constitution, the Executive Branch, and all future occupants of the Office of the Presidency, President Trump and his Administration cannot participate in your partisan and unconstitutional inquiry under these circumstances

  4. On October 8, 2019 at 6:49 pm,
    CFS says:

    As I understand the Repo Market…..
    Banks deposit securities with the Fed in exchange for cash….(used to be for just overnight, but now various short durations.) When the cash (a computer entry ) is handed back, so are the securities.
    Now the Fed is accepting more than just Treasuries or Government longer term bonds.
    The Fed is accepting Mortgage-back securities, Corporate debt, etc. AND THIS DOES HAVE TO BE MARKED TO MARKET….just an assigned book value.
    In order to keep correct books, the FED has to create money for the Repos…i.e. the value of the “securities” used for the repos have to be offset by an amount on the Fed’s books (just in case the securities have zero actual value or the bank defaults.)
    Thus it is not technically QE4, but could be if the bank defaults.

    Hi

  5. On October 8, 2019 at 6:56 pm,
    CFS says:

    The really scary thing is that banks sidling up to the repo window are multi-national banks doing business and licensed in the U.S., as well as National Banks.

    This includes Deutsche Bank and HSBC, both of which could go belly up, leaving the U.S. out the Repo amount.
    Hopefully the Fed will not be so stupid as to Repo excessive amounts and allow the money to be wired out of the U.S.

  6. On October 8, 2019 at 7:15 pm,
    CFS says:

    It is always what you don’t know that gets you in the end.

    Why does not Pelosi want to hold a full House vote ?

    Is she protecting Democrat Representatives from “red” States
    Is she trying to play on a tilted playing field ?

    Or just maybe, she does not think she would get a majority of the votes !

    I don’t know.

  7. On October 8, 2019 at 7:36 pm,
    CFS says:

    HERE’s the REALLY, REALLY scary truth for me.

    According to Section 1101 of the Dodd-Frank financial reform legislation of 2010, both the House Financial Services Committee and the Senate Banking Committee ARE TO BE BRIEFED (emphasis mine) on any emergency loans made by the Fed, including the names of the banks doing the borrowing. The section actually reads:

    “The [Federal Reserve] Board shall provide to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, (i) not later than 7 days after the Board authorizes any loan or other financial assistance under this paragraph, a report that includes (I) the justification for the exercise of authority to provide such assistance; (II) the identity of the recipients of such assistance; (III) the date and amount of the assistance, and form in which the assistance was provided; and (IV) the material terms of the assistance, including — (aa) duration; (bb) collateral pledged and the value thereof; (cc) all interest, fees, and other revenue or items of value to be received in exchange for the assistance; (dd) any requirements imposed on the recipient with respect to employee compensation, distribution of dividends, or any other corporate decision in exchange for the assistance; and (ee) the expected costs to the taxpayers of such assistance…”

    (As far as I can determine there has been NO NOTIFICATION.)
    The FED is potentially propping up all world banks that do business in the U.S. WITHOUT OVERSIGHT.
    AND WE NOW HAVE DERIVATIVE LIABILITIES IN THE HUNDREDS OF TRILLIONS OF DOLLARS. (Again emphasis mine.)
    It was complete lack of oversight and the FED (OWNED BY BANKS) helping bankers, that caused the original QEs back in 2008-9.

  8. On October 9, 2019 at 6:39 am,
    Dick Tracy says:

    Meanwhile Bernie Saunders is scaling back his election campaign after having a massive coronary, some people just don’t understand life, ‘ITS OVER BERNIE’!

  9. On October 9, 2019 at 8:15 am,
    SilverDollar says:

    It is becoming more clear every day that the left hand doesn’t know what the right hand is doing in trump’s trade efforts.
    On Syria, I agree that we have to quit being a participant in the many squabbles in the middle east, but once in, we shouldn’t throw our allies under the bus! This is the second time this has happened with the Kurds. GHW Bush did the same when he let Saddam have assurances that we weren’t protecting the Kurdish areas of Iraq in the early ’90s. Saddam promptly began slaughtering them at will. No, on this decision, trump doesn’t speak for me!

  10. On October 9, 2019 at 9:52 am,
    b says:

    The Kurds should have known who they were dealing with from the beginning.

    The Kurds have known full well that the americans were supplying isis al qieda al nusra hyat tahrir al sham and allowing Turkey to buy all the stolen Syrian oil they could handle.

    The americans have never been on the Kurds “side”.
    They simply provide arms for profit.

    The Kurds are not allies of the americans, Turkey is allied to the U.S…..
    for now anyway.

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