If there must be madness, something may be said for having it on a heroic scale.
There can be few fields of human endeavor in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present. - John K. Galbraith (today’s title is from JKG too)
San Francisco Fed Chief Apparatchik Mary Daly says this about 17 minutes in here.
Daly sounds sympathetic to the plight of the serfs, but her econ background has led her to believe that higher inflation leads to more jobs. Plus she previously had called for higher inflation:
So when Daly said this, official (nonsense) CPI was about 1.27%, now it's 9%. Their made-up "target" is 2% (although several FOMC members were calling for much more).
The problem here is these clowns think inflation is some dial they can turn up and down.
This is how Fed economists think about inflation. It's like theoretical physics. No mention of people struggling to pay for food, energy, rent, healthcare etc. Nope. To these rocket scientists, "the recent burst of inflation" will have just two effects:
In summary, the recent burst of inflation in the U.S. and the rest of the developed world will have two effects: It will immediately reduce the real value of existing debts, but it will also tend to raise expected inflation—and therefore yields—perhaps for years to come, which will increase the cost of borrowing in the future. The Federal Reserve’s credibility with the market will determine the extent to which the cost of borrowing increases and stays high. If markets believe that the Fed will quickly reduce inflation, then long rates will not rise too much and soon will return to levels consistent with the Fed’s inflation target of 2% in the personal consumption expenditures (PCE) price index.
The Death of Equities - How inflation is destroying the stock market August 1979
Whatever caused it, the institutionalization of inflation—along with structural changes in communications and psychology—have killed the U.S. equity market for millions of investors. "We are all thinking shorter term than our fathers and our grandfathers," says Manuel Alvarez de Toledo, of Shearson Loeb Rhoades Inc.'s Hong Kong office.
Today, the old attitude of buying solid stocks as a cornerstone for one's life savings and retirement has simply disappeared. Says a young U.S. executive: "Have you been to an American stockholders' meeting lately? They're all old fogies. The stock market is just not where the action's at." (Page 6)
Everything written by Peter Coy is stupid.
Investors grow frustrated with hedge funds after historic losses A survey of 100 hedge funds managing $194bn by technology firm SigTech found that 23 per cent expected a dramatic increase in institutional investors’ allocations to hedge funds over the next two years and a further 60 per cent expecting a slight increase. Only 4 per cent expected investor allocations to fall.
Robinhood Lays Off 23% of Staff as Retail Investors Fade From Platform
HBO Max is expected to layoff around 70% of their development staff.
SoundCloud Announces Layoffs of ‘Up to 20%’ of Global Workforce
Traeger Pellet Grills, a Utah-based company that makes outdoor grills and meal kits, is laying off staff to cut costs
Wind turbine maker Siemens Gamesa is considering cutting around 2,500 jobs, or about 9% of its total
Texas-based multichannel lender Finance of America has laid off hundreds of employees across several rounds in the second and third quarters of 2022.
TELUS International Inc. has given 267 employees layoff notices at its Folsom call center, where workers provided technical help for customers of Google, TikTok and other Silicon Valley companies.
Unbounce, a tech company with headquarters in downtown Vancouver has let 20% of its staff go, which amounts to 47 employees…The Canadian software company produces landing pages for websites. It also hosts the annual Call to Action Conference. [We sure had a bull market in dumb company names in recent years. Anybody know what the Call to Action Conference was all about? - RH]
Too many more to count. Maybe these numbers are typical. More here. Also 422 startup failure post-mortems.
Alternate Inflation Measures (I haven’t looked much into any of them)
Truflation 10.25%
Chapwood Index Apparently discontinued in 2019
Billion Prices Project Defunct by 2016?
New House Supply highest since May 2010
Earlier this year, lenders were active and a buyer could borrow at a 65% to 70% LTV at an all-in rate in the high 3% to low 4% range. Today, the credit marks -- credit markets for value-add office properties are essentially frozen. Recently, debt funds have been the primary source for loans. With LTVs around 50% and all-in rates in the 6% to 7% range, borrowing activity has slowed considerably. - Equity Commonwealth earnings call (an oddball office REIT)
Jim Grant on price-fixing (2019)…
Interest rates are probably the most sensitive and consequential prices in capitalism. They balance savings and investment, discount future cash flows, define investment hurdle rates, measure financial risk. Yet the Fed and its foreign counterparts seek to manipulate or, at least, to influence, interest rates both long-term and short. They can’t seem to keep their hands off them.
Wall Street raises no protest against these intrusions. The artificially low rates of the past 10 years have advantaged investors, speculators and corporate promoters. They have deadened the risk sensors of even professional investors. They are 80-proof financial disinhibitors. The same low rates—by some measures, the lowest in 3,000 years—have penalized savers, incentivized dubious risk-taking, expedited the growth in federal indebtedness, and perpetuated the lives of businesses that would have failed in the absence of easy credit. They have widened the gulf between rich and poor, thrown a spanner into our politics and inflated the cost of retirement.
Side by side with unprecedented want among the bulk of the population, there is a striking display of luxury among those who are benefiting by the inflation. This minority, which makes a profit out of the misery of our country, is giving an unwarranted appearance of prosperity. - Anna Eisenmenger
MOST OF THE “FACT-CHECKING” ORGANIZATIONS FACEBOOK USES IN UKRAINE ARE DIRECTLY FUNDED BY WASHINGTON
The entire “fact-checking” industry is a psy-op.
Science, though, is one thing, finance another. In science, progress is cumulative — we stand on the shoulders of giants. In finance, progress is cyclical — we keep stepping on the same rake. - Jim Grant
Ukraine on Fire documentary by Oliver Stone worth a watch on YouTube - well one can be critical of his lack of coverage on negative Russian actions, it certainly shows how menacing the US has been over the last decades. Point being - this is a far more complex situation than MSM want us to believe. And I worry the US is following the same ‘poke the bear’ strategy with China. It’s all fun and games until their own children get hurt.
It is stunning that the economics profession survived 2008; then I remind myself that journalism is nonexistent in MSM, especially the business press.
As Jamie Dimon once quipped, "When it comes to egregious sociopathic criminal financial fraud, go big or go home."