Nov 14. It’s Jackie’s world, we just live in it.
“That’s outrageous, egregious, preposterous” –Jackie Chiles
Nov 14. It’s almost as if someone actually KNEW that Yellen’s testimony would be released on Wednesday afternoon and that she would dutifully say that the Fed has more work to do. In any case, interest rate futures added to already robust gains when the prepared remarks were released at 3:30 CST, with ten yr futures jumping 1/2 point from the 2:00pm close. Stocks also surged to new highs yesterday.
–Apparently JPM had a disastrous public relations campaign where the public could use twitter in direct dialogue with a top executive. It was cancelled by JPM with this tweet: “Bad idea. Back to the drawing board.” While JPM is a target of jest due to this mistake, it admitted the problem and moved on, something I wish the gov’t could do. In terms of the Fed (you thought I was going to refer to Obamacare, right?), many internal officials have concluded that QE has lost its power, or was never that effective in the first place. Bernanke, the champion of transparency, had pointed to rising stocks as a measure of QE’s success. Stocks are at new highs. Why is there “more work to do”? The wealth effect transmission isn’t cutting it. As my old coworker used to say, “That dog won’t hunt.”
–Global growth figures are soft in data released today. France GDP declined 0.1, Italy had 9th straight qtr of decline. Japan GDP was lower than expected due to “loss of momentum” (WSJ) in consumption and exports. The yen is probing new recent lows as more QE (it’s a global phenomenon) is the expected response.
–Italy is shaking down Apple, oops, what I mean to say is that Italy believes Apple has avoided paying €1 billion in taxes owed to its gov’t. It’s not exactly news that strapped governments have become more aggressive in tax collection efforts. But I heard a story yesterday that takes it to a new level. And file this one under hearsay; I have absolutely no documentation. But as a friend said, it would be hard to make it up… All gov’ts levy fines on businesses once in a while, just ask aforementioned JPM. But in France, apparently some large companies have been slapped with big fines of dubious legal standing, knowing that companies will fight in court and have the levies overturned years hence. In the meantime, these amounts are (supposedly) being tallied on gov’t books as Accounts Receivable to make budget numbers appear better. It almost feels like I’m living in Chicago…oh.
–Thirty year bond auctioned today. Trade data and Jobless Claims (330k) as well, along with Yellen hearings.
