Be careful what you wish for.
Don't forget - every FOMC member not long ago WANTED high inflation.
Short update today. Happy Easter everyone!
“57% of the American public has less than $1,000 in an emergency. That means they live paycheck to paycheck, they rent, they have no assets. They don’t own a brokerage account. So if the inflation rate is 6%, and they’re getting a pay increase of 5% at their job, they’re buying less every year, and Jay Powell says, at every press conference, “I’m here to help those people get the inflation rate below what your wage increase is, so your real purchasing power isn’t eroded.””
Then again…
"There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen."
Frédéric Bastiat
Podcast: Marko Papic with Russell Napier on “The Buenos Aires Consensus”
"The Buenos Aires Consensus...There's a negative consequence of that and the negative consequence of that is that most people don't vote for short term pain, long term gain. They vote for short term gain, long term pain."
- Marko Papic in 2020 on Realvision
Then again, as Lacy Hunt says:
“The private sector has a high multiplier, the government sector in my view is negative, and so as you shift further and further into command and control, you diminish your possibility for growth."
“At the Fed, when you’re on the trading desk, one of your jobs is to report to people on the FOMC what’s happening in the markets. We never reported anything that happened with gold. In fact, we were told that they’re not really interested, so never talk about the gold price. They don’t care.”
Dr. Paul. Do you think gold is money?
Mr. Bernanke. No, it is not money; it is a precious metal.
Dr. Paul. Even if it has been money for 6,000 years,
somebody reversed that and eliminated that economic law?
Mr. Bernanke. It is an asset. Would you say Treasury bills
are money? I do not think they are money either, but they are a
financial asset.
Dr. Paul. Why do central banks hold it?
Mr. Bernanke. It is a form of reserves.
Dr. Paul. Why do not they hold diamonds?
Mr. Bernanke. It is tradition, a long-term tradition.
Dr. Paul. Some people still think it is money. I yield
back. My time is up.Q. I want to ask you a few questions bearing on the subject that you have touched upon this morning, as to the control of money. The control of credit involves a control of money, does it not?
J.P. Morgan: A control of credit? No.
Q. But the of basis of banking is credit, is it not?
J.P. Morgan: That is the evidence of banking, but that is not the money itself. Money is gold, and nothing else.
- Testimony of J. P. Morgan Before the Bank and Currency Committee of the House of Representatives, at Washington, D. C., Appointed for the Purpose of Investigating an Alleged Money Trust in “Wall Street," December 18 and 19, 1912.
“The system is being run for the benefit of large corporations”
I came across a study of small versus large companies in the US. In 1990, the companies under 1 billion made 8% return on sales, and the ones over 10 billion, the big companies, made 12%. Eight to 12, that’s exactly what I would expect. They make 50% more than the little guys. And in 2021, the guys who used to make eight now make four. And the guys who used to make 12 now make 18. This was in The Economist…
An eight to 12 relationship is more or less how you expect the benefit of large scale. Four to 18 is what you expect to see when the system is being run for the benefit of large corporations, and I believe American capitalism is just that. It’s run for the benefit of large corporations.
…you know that today we have half the number of people in companies one or two years old that we had in the seventies. So we are not, broadly speaking, as ambitious and enterprising as we used to be because the big companies basically have so much power that they create an unlevel playing field.
Actually, the system is being run for the benefit of the top executives of large corporations:
"The value has decreased by about 99%. And for this achievement, the best top managers of the world would have been paid not only millions but billions in bonuses. And now, they probably want a golden parachute to bid farewell to us as well. Have you ever asked yourself, how much is enough? How much is enough for a golden parachute that is on his crashing plane that is the Credit Suisse?"
That California “Dream for All Shared Appreciation Loan” I mentioned lasted 12 days. I hope worthy people got the money.
LA County Saw More People Leave Than Any Other County In The U.S. “Anytime we see a coastal California county losing folks, that’s really a policy failure on our part…That’s going to really have some red flags for our fiscal house of cards in jurisdictions over the next decade.”
To be fair, that’s almost a 1% decline. Here are the counties with the largest % declines:
In the UK: “Buyers have been broken by rampant inflation, jacked-up mortgage rates, a stagnating economy, and the threat that there could be worse to come.”
More office space is being vacated than occupied in Dallas-Fort Worth, signaling waning confidence in the beleaguered sector and a greater acceptance of hybrid and remote work.
The first three months of this year saw negative office absorption of about 699K SF, a steep decline from the 266K SF of negative absorption recorded in Q4 2022, according to new data from Cushman & Wakefield. Leasing activity was down about 27% year-over-year in the first quarter, JLL data shows, mainly due to economic uncertainty prompting larger tenants to hold off on space commitments.
Domestic, private-label CMBS issuance during the first quarter of 2023 totaled a mere $5.98 billion – 12% less than the fourth quarter and down more than 79% from the same period a year ago. The last time quarterly volume was as low was in 2012…
Happy Easter, Sir! + HE IS RISEN +
None of those central bankers ever explained why they regretted low inflation. It's because their buddies were getting richer slower!