tag:blogger.com,1999:blog-34323687.post6794026862579894569..comments2024-03-28T12:22:11.704+00:00Comments on Macro Man: Central bank credibilityMacro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger22125tag:blogger.com,1999:blog-34323687.post-60293532044774040482015-11-03T23:58:40.803+00:002015-11-03T23:58:40.803+00:00http://blog.kimblechartingsolutions.com/wp-content...http://blog.kimblechartingsolutions.com/wp-content/uploads/2015/11/crudeoilbullishfallingwedgenov31.jpgAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-22529930308277325472015-11-03T23:52:46.204+00:002015-11-03T23:52:46.204+00:00Crude Oil Final Test Before Full Blown Bull is 50....Crude Oil Final Test Before Full Blown Bull is 50.88<br /><br />http://www.dailyfx.com/forex/technical/elliott_wave/oil/2015/11/03/eliottWaves_oil_2.htmlAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-56228025788345103992015-11-03T23:38:19.138+00:002015-11-03T23:38:19.138+00:00@Anon 10:22 - Thank you for the heads-up on the Dr...@Anon 10:22 - Thank you for the heads-up on the Druckenmiller conference.<br /><br />To all, PLEASE check it out, well worth the time:<br />http://www.valuewalk.com/2015/11/stan-druckenmiller-dealbook/Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-91710222546616590302015-11-03T23:10:34.578+00:002015-11-03T23:10:34.578+00:00@abee - bitcoin will never be allowed to become a ...@abee - bitcoin will never be allowed to become a significant challenge to fiat. Modern governments need fiat so that they can engineer inflation and thus manage debt burdens. Debt burdens are the byproduct of buying votes & distorting the financial system. Buying votes allows for power & corruption. Simples. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-25421515895159826662015-11-03T22:22:33.693+00:002015-11-03T22:22:33.693+00:00Sorkin: "Are you anticipating chaos?"
...Sorkin: "Are you anticipating chaos?" <br /><br />Druckenmiller: "Yes..operating under the assumption..primary bear market started July" Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-85062500645687287142015-11-03T21:40:51.021+00:002015-11-03T21:40:51.021+00:00Regarding bitcoin, yes the amount in circulation i...Regarding bitcoin, yes the amount in circulation is limited and will grow only slowly after 2020 but that is just an artifact of this initial design. There could easily be a new crypto currency that leap frogs Bitcoin. <br /><br />We could easily issue a "new" bit coin, that steadily grows supply 1 or 2% pa forever. <br /><br />The massive income inequality caused by 21M bitcoins is no different than that under a gold standard. And judging by the job QE has done, I'm not sure fiat money is much better. In any monetary system it seems some will benefit more than others, but at least with bitcoin you know the rules. The actual amount isnt a big deal. It wouldnt matter if its 21M or 100Billion. They are easily divisible abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-28510749611109653102015-11-03T21:02:33.138+00:002015-11-03T21:02:33.138+00:00MM - some v good replies, above, thx.MM - some v good replies, above, thx.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-76562885287093621902015-11-03T20:44:25.122+00:002015-11-03T20:44:25.122+00:00Mr T-
I don't think the goal posts have been ...Mr T-<br /><br />I don't think the goal posts have been moved. The goal posts are set at employment to a level commensurate with price stability. The problem is that we are facing a particularly unusual set of economic circumstances and ambiguous data.<br /><br />It's not so much that the Fed has moved away from explicit guidance as that they have moved toward data dependence. Even though I have spent a career exploiting fallible models I still prefer this stance to policy set by the capricious intuition of some maestro. DownWithTheBeanCountersnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-10794042796270959872015-11-03T20:03:27.690+00:002015-11-03T20:03:27.690+00:00Actually, the problem with bitcoin is the limited ...Actually, the problem with bitcoin is the limited supply has created a predefined of rentiers who would be due a fabulous unearned windfall if BTC were ever to become a widely used currency. There are currently 15m bitcoins in existence; the maximum possible is 21 million. The math doesn't work without creating massive income inequality...which, of course, is the goal of most BTC proponents and holders!Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-9549167907437798012015-11-03T19:31:15.108+00:002015-11-03T19:31:15.108+00:00I would consider a lot of the scandals here as imp...I would consider a lot of the scandals here as important, but not really altering credibility. To me the credibility issue stems from the moving of the goalposts and general breakdown of communication. Credibility is all about do people believe you. When the fed said they would raise rates when U6 got below 6.5%, people believed them. Everyone knows and has always known that U6 is an imperfect measure, it was assumed that the fed was incorporating the U6 error bars into their assessments. If Yellen now says "we will raise rates when CPI gets to 2% for 3 months", does anyone really believe them? CPI too is an imperfect measure. This gets to the root of the issue where credibility is lost and in the process fed policy looks more and more reactionary than anything else. The fed has backed away from explicit guidance, possibly acknowledging that it erodes their credibility and gets them in trouble. Fine, but damage has been done.Mr. Tnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-70938897240701918952015-11-03T19:30:41.034+00:002015-11-03T19:30:41.034+00:00Thank MM, I didnt realize the ties were so deep, I...Thank MM, I didnt realize the ties were so deep, I thought that was reserved for EM. <br /><br />i have the solution. Bitcoin! no seriously its pretty awesome how the whole system developed, the only problem is that it makes too much sense and that it cant be manipulatedabee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-23139796349691458402015-11-03T19:07:53.420+00:002015-11-03T19:07:53.420+00:00Most of the commentary I read suggests that Fed cr...Most of the commentary I read suggests that Fed credibility is diminished every time the board passes on the opportunity to raise rates. As was alluded to in the post The Fed's credibility also rest on the board's ability to keep people employed and prices stable. In that sense, a central banks credibility depends on the extent to which their actions are "correct". So... Ben Bernanke and Janet Yellen are some of the most credible central bankers in history.<br /><br />There is significant frustration with the rate-raise delay and calls for central bankers to give up and admit that they will never achieve their inflation goals. How does that differ from what the Fed has been doing vis a vis UE and the first rate hike? Why is "bowing to reality and lowering the inflation target" more credible than acknowledging that there is more slack than thought in the labor market (because wages and prices are responding as expected) and lowering the NRU?<br /><br />Is inflation everywhere and always a monetary phenomenon? <br /><br />Is this formula a silly toy: MV = PQ?<br /><br />Will the Ben Bernanke pajamas I so obviously desire be under my Christmas tree? <br /><br /><br />DownWithTheBeanCountersnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-46041028306567070792015-11-03T18:19:05.932+00:002015-11-03T18:19:05.932+00:00"Put another way- if the regulatory standard ..."Put another way- if the regulatory standard for the pvt sector is now guilty until proven innocent, well the same standard should apply to the public sector as well. Otherwise the result is inevitably tyranny."<br /><br />Well yes, I fear you are more right on this one than you know MM! I don't believe in the Mad Max scenarios expounded above, but CBs have a monumental problem on their hands. In the EZ and Japan at least, they are fighting a losing battle. They will never reach their "inflation targets", and my feeling is that the big shock will be when someone takes the helm who understands this. <br /><br />Right now, the printing press/ZIRP is being primed, leading to a perennial state of Goldilocks. What if the ECB realised that trend nominal GDP growth is closer to 1-to-1.2% and therefore inflation should also be 1-to-1.2%? <br /><br />It won't happen tomorrow, but eventually I suspect it will. CVhttps://www.blogger.com/profile/16843402165210120665noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-11470197454479149212015-11-03T17:56:22.333+00:002015-11-03T17:56:22.333+00:00One answer is that the linkage between modern cent...One answer is that the linkage between modern central bank policy and traditional macro playthings- notably short rates- is much more tenuous in the past. Another is that there clearly has been some sort of impropriety in the past- one well known fund made money like clockwork when Trichet was in charge of the ECB, and has generally struggled since.<br /><br />The over-arching point, though, is that when certain private sector actors are being flushed down the toilet by regulatory pressure despite doing nothing wrong- and I know several who fit that category- the CBs really need to avoid even the faintest whiff of impropriety, which they are studiously not doing.<br /><br />Put another way- if the regulatory standard for the pvt sector is now guilty until proven innocent, well the same standard should apply to the public sector as well. Otherwise the result is inevitably tyranny.Macro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-13797123283928981712015-11-03T17:34:35.624+00:002015-11-03T17:34:35.624+00:00The problem with all this is that IF the BIG Macro...The problem with all this is that IF the BIG Macro names are getting all this information, then why are their last 5 years' numbers comparable to that available from a bank deposit? - And in some high profile cases shockingly worse. [Taking the other side - I guess they might be losing 5% a year instead of making 3 % without all the 'help']Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-58097632523424961802015-11-03T16:35:14.741+00:002015-11-03T16:35:14.741+00:00" I'm not being silly here"
Of cours..." I'm not being silly here"<br />Of course you are, but it's silly that you recognise it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-60970697880162136112015-11-03T16:12:08.880+00:002015-11-03T16:12:08.880+00:00As for central bankers being either: stupid, naive...As for central bankers being either: stupid, naive, or corrupt - it's worse, they are all of those and more.<br /><br />I very much hope this ponzi continues for the simple reason that when it crashes the fallout will be so bad, that I sincerely believe central bankers will be executed or at the very least face life imprisonment. I'm not being silly here, I honestly believe we will have massive social upheaval in the West in the next 10 years, and possibly civil wars. Central bankers will be the politicians' scapegoat - you can already see many politicians distancing/blaming them.<br /><br />It sounds harsh, but when you consider these guys have basically destroyed society and free markets, the punishment fits the crime.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-55462090971365492772015-11-03T15:37:05.508+00:002015-11-03T15:37:05.508+00:00That last comment is from MMThat last comment is from MMUnknownhttps://www.blogger.com/profile/08951375217497888943noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-16583815816997882592015-11-03T15:36:24.942+00:002015-11-03T15:36:24.942+00:00If Carney wants to get as much as he can, fine, bu...If Carney wants to get as much as he can, fine, but then he loses all moral authority to criticize others' pay. Moreover, if he sees nothing wrong with hiring a guy from Brevan to the MPC and letting him keep his interest in BH, he is either stupid, naive, or corrupt. I'm not sure which is worse.Unknownhttps://www.blogger.com/profile/08951375217497888943noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-31084024268085417862015-11-03T15:06:26.707+00:002015-11-03T15:06:26.707+00:00i think BOE knew what they were getting with Carne...i think BOE knew what they were getting with Carney. He did the same 'waffling' with BoC. Anyways i dont have a problem paying CB's competitive market salaries and also opening up the positions to non PhDs. I'm sure he would be making more if he had stayed with GS... <br /><br />If you consider of much we are willing to pay CEO's CFO's etc, why not pay the most important person in the country's economy a similar wage. Although we all know that independent CB's are really not, and politics still plays a big role... but then I guess the conflicts of interest might be even worse.... abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-16420843839102816592015-11-03T14:34:29.100+00:002015-11-03T14:34:29.100+00:00I start every trading viewing this chart and keep ...I start every trading viewing this chart and keep on saying this can't go on, this can't go on...<br /><br />http://imgur.com/9OyUhdU<br /><br />Makes me a more cautious trader though.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-15282890711479096052015-11-03T13:28:37.366+00:002015-11-03T13:28:37.366+00:00good post MM - little bit like the compulsory huma...good post MM - little bit like the compulsory humanities paper that the precocious pre-med student has to turn in - credibility is a tough subject - just hope I am smart enough to spot it when the rank and file start disbelieving the fed - I think most hedge funds already carry around naked pictures of them anyway, right next to their job applications. <br /><br />You would think their credibility would be strained the most if the productivity 'slowdown' we have been seeing for the last 5 years gains in force - it will be basically impossible for these guys to deal with compressing and stagnant margins in corporate america along with wage inflation and muted consumer spending. Its a problem they have dealt with exactly zero times. washedupnoreply@blogger.com