US Federal Reserve

Despite a collapse in yields and implicit plunge in the odds of a rate-hike anytime soon, asset-gathering, commission-taking talking-heads continue to spew unrealities about the economy and where it goes next as excuse after excuse (low oil is good, services trump manufacturing etc) are discarded. What is worse is that none other than The Fed's "owners" - the primary dealers - refuse to play along with The Fed's transitory narrative as their Treasury Bond position is the longest since 2013.

Submitted by Paul Bordsky via Macro-Allocation.com,

It seems monetary policy is exhausted and the next exogenous lever to pull would be political fiscal initiatives. If/when they fail to stimulate demand, there would be only one avenue left – currency devaluation. If/when confidence in the mightiest currency wanes, we would expect the US dollar to be devalued too - not against other fiat currencies, but against a relatively scarce Fed asset.

Seriously Squirrely

Almost one year ago, in March 2015, we explained how "The Fed's Artificial Steepening Of The Yield Curve" has resulted in many unexpected consequences, the most important of which has been the erroneous interpretation of the yield curve as a leading recessionary signal. As said back then, "the artificially steep yield curve is a reflection of policy intent not economic reality....

Submitted by Bill Bonner of Bonner & Partners (annotated by Acting-Man.com's Pater Tenebrarum),

Fighting to Lose

An election has been described as two wolves and one lamb voting on what to have for dinner.

We’re going to make a difference on election day! Or maybe not…

Over one year ago, when the "conventional wisdom" punditry was dreaming up scenarios in which the Fed could somehow hike rates to 3% and in some magical world where cause and effect are flipped, push the economy to grow at a comparable rate we said that not only is the Fed's tightening plan going to be aborted as it represents "policy error" and tightening in the middle of a global recession, but it will result in the Fed ultimately cutting rates back to zero and then, to negative.