Wall Street is Celebrating Easy Money Under Yellen

Mish

Jim Bianco gives his thoughts on Janet Yellen in a Bloomberg interview.

Easy Money 

If you have access, Bloomberg's video interview of Jim Bianco is worth a play: Wall Street Sees 'Easy Money' With Yellen at Treasury

Partial Transcript

"Risk markets are celebrating Yellen as Treasury Secretary in a way that suggests she is heading both the Fed and Treasury. They are celebrating 'easy money' Treasury Secretary but technically the Treasury Secretary doers not set monetary policy and is not supposed to influence it."

"Her skill set is well qualified for Federal Reserve Chair. As a diplomat, as a chief negotiator , if that's what the Biden Administration wants, her skillset is not Christine Lagarde's skill set when it comes to negotiating things like budgets or sanctions or tariffs. She may grow into the job but it is a big unknown right now."

"I think all Wall Street sees is easy money and they are happy with the idea, but over the long term there are going to be questions where she fits in that spectrum."

Great Inflation Debate: When and How Big?

Also see Great Inflation Debate: When and How Big?

In a guest post, Jim Bianco at Bianco Research shares his views on inflation and when the Fed will hike.

Bianco: We have argued the 0.33% low in 10-year yields on March 9 marked the end of the 39-year bull market. Rates should be moving higher, but they are being suppressed via massive QE. At some point we expect the “horse” to tear the post from the ground and start running with higher yields.

I also have comments from bond bull Lacy Hunt on what might get him to change his mind.

Mish 

Comments (33)
No. 1-14
Eddie_T
Eddie_T

You just have to think that the Fed and the Treasury are more apt to be “hand-in-glove” cooperative on monetary policy. Powell is on recored for several months now saying more stimulus was going to be needed to get us past COVID.....Yellen, too, has said as much.

I can’t see a Biden-Harris team going toward austerity in the circumstances, which might be about to get much worse, for a few months at least. The Pandora’s Box (helicopter money) has been opened already....and failure to helicopter more is (in the short tun) going to result in a lot of defaults of various kinds before the winter is over.

It there ever has been a time to helicopter, this is it. Just helicopter it further downstream instead of giving 80% of it to the rich this time.

anoop
anoop

Everything seems so rosy. Like we're finally making progress on ALL fronts SIMULTANEOUSLY.

PecuniaNonOlet
PecuniaNonOlet

Choo! Choo! All aboard the money train....$$$$$$$$$$$$$$. Bought some stocks today..

Maximus_Minimus
Maximus_Minimus

And president Camacho is yet again celebrating a new stock market high, the (only) kept election promise, never made.
I premise, most of the voters see it as an evil Wall Street vulture feasting on the body economic.
Dystopia has become mainstream, normalcy is an aberration.

Carl_R
Carl_R

Mish, it seems that you opened up the Community section today for a minute, and instantly you were spammed again. It seems clear that you can't open it ever again. I'll make a suggestion: why not have the community section available only to posters who have been a member in good standing for some period of time, say 3 months, and 20 posts, or if that's not enough, double it.

It's sad to have to do that, but you have to do what you have to do. Otherwise there will be no community section at all.

truthseeker
truthseeker

We may have to wait till after January 20 I guess, so I wonder what Lacy Hunt and the bond market will think when we get a new 2 trillion dollar stimulus plan along with an exciting UBI?

njbr
njbr

My goodness, wasn't the market supposed to collapse if Biden was elected?

Now we had Trump come out, like the groundhog, celebrating Dow 30,000...

A "sacred" number...

Thanks, Biden!!!

Telenochek82
Telenochek82

The day of reckoning for easy money is coming. Just wait.

njbr
njbr

market still below trend growth

Sechel
Sechel

Seems I'm not happy with Fed leadership under both Democratic and Republican administrations. I'm against dual mandate.

Realist
Realist

This is why it is important to be well diversified. Putting all your eggs into one or two baskets entails too much risk. Stocks, bonds, commodities, real estate, private equity, gold, crypto, etc. are all things to consider. As is geography; investing in multiple regions around the world helps with your diversification. I like to be well diversified, and rebalance as conditions change.

njbr
njbr

OTB CDC forced by lawsuit to release county-by-country data--some eye-openers here

Christopher Moore
Christopher Moore

Greenspan, Bernake, Yellen and Powell should be remembered as the four horsemen of the apocalypse. The four of them have destroyed the Dollar and the middle class. They continue to blow bigger and bigger bubbles and when they pop, they put it on the American citizen’s credit card and ride off into the sunset with a multimillion-dollar consulting deal. Putting Yellen in charge of the Treasury is the same as putting the Arsonist in charge of fighting fires, she would be a busy lady, QE fires for everyone.

When I first heard about Covid-19, my first thought is that this is going to be the greatest thief of money from the middle class and transferred to the rich. 2008 was a trial run, the powers that be, took the training wheels off and started the money creation. Two things had to be done in order to ensure success, they needed to allocate money for the people in the form of unemployment benefits, crumbs for the little people, $600.00 a week was enough to keep low wage worker quiet, so they wouldn’t revolt when they saw the trillions given away to the corporatist. Next was the PPP for business owners, but more important were the friends with shady businesses that could claim millions by massaging the rules and were allowed to go bankrupt and walk free.

We need term limits, age limits (60 and under if you want to run), Diane Feinstein is 87 years old, no one that old should be making policy for the future generations. She should take all the money she screwed the American people out and ride into the sunset. Republicans, you have your own group of criminals too. Lobbying, known in the real world as bribes are made by guys and girls in suits. Apple cries about how high corporate taxes are in America, but pays no Federal Taxes, yet has no problem spending a half a billion dollars a year “LOBBYING” government, am I the only one who sees a problem with this?

America, where free market capitalism goes to die.

FromBrussels
FromBrussels

Debt driven Markets were already insanely overvalued before Covid, now in the midst of a out of control pandemic, with undeniable social/economic consequences and NEVER seen before stratospheric debt mountains, asset records are being broken again. Tell me that everything is all right and that the house of cards won t fall apart dramatically any time soon ! Mind you, I am an investor myself, a plain vanilla one, with buy and hold strategies mostly, so I do reap benefits occasionally but my portfolio is still down 2% for the year, my banker says I belong to the lucky ones.... Yet I am worried ,something is VERY, very wrong here ....


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