Well done. American business elites, whatever their private views of Trump, have taken no unified stance on his threats to the Constitutional order, just as they had no unified public message on climate threats. And based on the current trends in distribution of income, and the performance of financial markets since 2009 - why should they take a stand on "civilian" principles? Not so different than the stance of the German business leaders during the later days of the Weimar Republic.
I'll ignore your insolence sir, and say only I am open to persuasion, but knowing the environmental community very well on this issue, I don't think they join the nuclear now campaign.
The absurdity of the clown administration continues to grow. If the Treasury market was not moved by the stunt of proposing to prosecute Powell, it is because it is so obviously preposterous and unlikely to have any substantive effect. Few things that the Trump administration is attacking are more important than the independence of the Fed. The world's financial market structure and credibility depend on it. It may be that people (outside those hedging metals traders) are not taking the threat seriously enough. But, by choosing the least credible weapon to attack with, the Trumpistanis are helping to lull the markets to continue their belief that it will come to nothing. Could that be their strategy? I doubt it. This is yet another performance for benefit of the "base" and has nothing to do with meaningful monetary policy.
Powell and the Biden administration raised the fed funds rate from near zero to 5.44 percent without triggering a horrible recession. They got no credit for that. They were blamed for the inflation that helped solve the problem. Nobody gets a medal for stuff that didn't happen. But prevention matters. Democrats similarly get no medals for prevention, yet prevention of terrible events almost defines the role of government.
To add to this most useful piece: there are 2 positions at the Fed to be replaced this year, Miran's (Kugler's) and Bostic's. All others are staying (unless Trump convicts them).
If the polling of @gelliottmorris and others proves prescient for November 2026, Congress may grow some teeth in Jan 2027.
As Mr. Tooze has been preaching, there are no alternatives to the US$, which is performing its function far better than, say, the GBP was in the interwar period.
Unless the US current account deficit declines substantially, recycling will follow recent flows into corporate equity/debt.
A potential shift in the international flow of funds, what if oil declines to under $50 or $40? The transition to electricity as motor vehicle energy input has been incredibly fast and is accelerating everywhere except the US and even here the economics, despite Trump's efforts, are in favor of ditching gas for electric.
I have no use for Trump nor his pack of vandals, but nor am impressed with the pieties associated with supposedly “independent” central banks. The whole thing is a charade on behalf of asset owners at the expense of labour with the connivance of elected representatives who hide behind the arrangement in order to escape our systems of democratic accountability for their failure to properly exercise fiscal policy on behalf of the wellbeing of the citizenry.
Enough already — give us back the consolidated Treasury.
People tell me that an independent central bank is a good thing. And that I should maybe worry about the politicisation of it. Personally I'd rather not have unelected officials having so much power over my life, and at least if it was political – we could hold those people to account at election time couldn't we?
Has Donald Trump ever, in the past 40 years, accepted the need for interest rates to go up? I'm just curious - if the economy is really "the hottest ever", which he thinks, why do interest rates have to be cut immediately?
Should Trump have control over the Federal Reserve it brings to mind the Weimar Republic in the early 1920s, they stopped worrying about inflation targets & public borrowing....
I think this is a good read of the situation. I worry about the cumulative impact of so many bizarre events: the Fed, Venezuela, Iran, possible buckling of some Republican support. Maybe gold is the all-purpose hedge.
Curbing central bank independence is bad, but the thing that’s actually much worse is the now-routine use of pretextual criminal prosecutions of the president’s enemies."
It is a bit late for the President's enemies to start claiming that.
This is the president that in Feb 2024 was forced to put up $454m as a bond against charges which were very clearly of no value following a case lead by NY attorney General Letitia James who got elected campaigning with promises to sue Trump.
So the irony here chimes with her complaints now that the charge against her of mortgage fraud is political. (The Trump charge was similar - property loans based on inaccurate paperwork, though the lender was happy to point out they had not issue with it).
Of course, the difference is that Trump was utterly guilty of the charges brought by the State of New York, based on fraudlent valuations of properties for both tax and lending purposes, as any banker in New York in the past 30 years would have told you. The charges against Powell are transparently pretextual. Even if the charges against James are true, which is not clear yet, they amount to a minor, very common (several Trump administration figures have done the same) paperwork error. Not like Trump's massive, systematic, persistent misvaluations over many, many years.
Sorry, but I am a New York banker myself, retired, and I know for a fact that his valuations were not remotely reliable years ago. No Democrat delusion necessary. And there was very mixed evidence in the DB discovery and testimony. Of course, they had to say their lending was appropriate in direct testimony -- or they would have had their own litigation problems -- but there were contradictory emails in the discovery and other parts of the record that indicated pretty clearly that they were swallowing the valuation problems in order to get the business at a time when DB needed the volume.
But then you also know that property firms are not expected to provide exact valuations, and lending banks do their own valuations.
The second part - that DB were accepting valuation issues because they needed the volume just confirms it all - it was a business decision done in full understanding of real valuations. They were not conned at all.
No, Trump was agreed to be well below the level of integrity expected even of real estate borrowers. It is a felony to make a false statement to a federally insured bank, which Trump clearly did many times, including with Deutsche Bank.
Seems to be a common theme right now. All these things that have been done many times by others before are suddenly the worst thing in the world.
meanwhile USA under Trump backs off from conflict with both Russia and China and creates incredible Presidential crimes to distracts from the end to wars.
But this is the Victory Lap - or at least the lap of shame from the defeated.
Ministry of War, Venezuela FFS, running from Yemen.
US has all kinds of dirty little victories planned, like the Syrian one, and the boxing in of Europe as Empire slaves. But small ones. Noisy is the main thing now - pretending it isn't in 3rd place already.
But the big things - Economy, military (hypersonics make maybe a couple of trillion of US investments in Carrier and jet aircraft redundant) and Soft Power (self-acknowledged and self-inflicted) have all switched from US to China, China.Russia, China over past 10 years. Not post Trump 2, mostly pre-Biden, quite a bit pre-Trump 1.
Well, this interesting conversation can obviously continue, but let me close with a few observations. The bank-fraud statute is there to protect the Federal Deposit Insurance Fund, and only secondarily to protect the banks. So, if the banks take excessively risky action on the basis of fraudulent statements, that's not the end of the story: the FDIC also has an interest to be protected (and a reason to deter frauds). I don't understand the relevance of the Adelson/Gazan comments, but obviously, Mrs. Adelson, not being a Federally insured bank, can take whatever risks she wants with her money. It is an unfortunate fact, and contrary to the rule of law that prosecutors have felt the need to drop litigation as a result of the election: Trump is bad enough but Trump with immunity is worse. All the cases against Trump started out with perfectly legitimate bases: the political context doesn't change that. Whether Harris would have been worse is debatable but irrelevant to the legal issues posed here.
Well done. American business elites, whatever their private views of Trump, have taken no unified stance on his threats to the Constitutional order, just as they had no unified public message on climate threats. And based on the current trends in distribution of income, and the performance of financial markets since 2009 - why should they take a stand on "civilian" principles? Not so different than the stance of the German business leaders during the later days of the Weimar Republic.
Climate change got binned once AI data centers needed unlimited energy. Build nuclear now or shut the f up.
I'll ignore your insolence sir, and say only I am open to persuasion, but knowing the environmental community very well on this issue, I don't think they join the nuclear now campaign.
Yeah, and we all studied for year how that ended
Really like your point about nihilism and elite priorities. I‘m so tired of people pretending elites are cowed or afraid.
Of course not. They are, almost by definition, full-blown Game Of Thrones sociopaths.
This is a very lucid recap. Thank you.
Seems you finally got the meaning of "We are all Lisa Cook"
The absurdity of the clown administration continues to grow. If the Treasury market was not moved by the stunt of proposing to prosecute Powell, it is because it is so obviously preposterous and unlikely to have any substantive effect. Few things that the Trump administration is attacking are more important than the independence of the Fed. The world's financial market structure and credibility depend on it. It may be that people (outside those hedging metals traders) are not taking the threat seriously enough. But, by choosing the least credible weapon to attack with, the Trumpistanis are helping to lull the markets to continue their belief that it will come to nothing. Could that be their strategy? I doubt it. This is yet another performance for benefit of the "base" and has nothing to do with meaningful monetary policy.
Powell and the Biden administration raised the fed funds rate from near zero to 5.44 percent without triggering a horrible recession. They got no credit for that. They were blamed for the inflation that helped solve the problem. Nobody gets a medal for stuff that didn't happen. But prevention matters. Democrats similarly get no medals for prevention, yet prevention of terrible events almost defines the role of government.
To add to this most useful piece: there are 2 positions at the Fed to be replaced this year, Miran's (Kugler's) and Bostic's. All others are staying (unless Trump convicts them).
If the polling of @gelliottmorris and others proves prescient for November 2026, Congress may grow some teeth in Jan 2027.
As Mr. Tooze has been preaching, there are no alternatives to the US$, which is performing its function far better than, say, the GBP was in the interwar period.
Unless the US current account deficit declines substantially, recycling will follow recent flows into corporate equity/debt.
A potential shift in the international flow of funds, what if oil declines to under $50 or $40? The transition to electricity as motor vehicle energy input has been incredibly fast and is accelerating everywhere except the US and even here the economics, despite Trump's efforts, are in favor of ditching gas for electric.
I have no use for Trump nor his pack of vandals, but nor am impressed with the pieties associated with supposedly “independent” central banks. The whole thing is a charade on behalf of asset owners at the expense of labour with the connivance of elected representatives who hide behind the arrangement in order to escape our systems of democratic accountability for their failure to properly exercise fiscal policy on behalf of the wellbeing of the citizenry.
Enough already — give us back the consolidated Treasury.
People tell me that an independent central bank is a good thing. And that I should maybe worry about the politicisation of it. Personally I'd rather not have unelected officials having so much power over my life, and at least if it was political – we could hold those people to account at election time couldn't we?
Candidates and elections are controlled by money. They're responsive primarily to money. Voters are like employees and customers; necessary evils.
Has Donald Trump ever, in the past 40 years, accepted the need for interest rates to go up? I'm just curious - if the economy is really "the hottest ever", which he thinks, why do interest rates have to be cut immediately?
Should Trump have control over the Federal Reserve it brings to mind the Weimar Republic in the early 1920s, they stopped worrying about inflation targets & public borrowing....
I think this is a good read of the situation. I worry about the cumulative impact of so many bizarre events: the Fed, Venezuela, Iran, possible buckling of some Republican support. Maybe gold is the all-purpose hedge.
Interesting. Treasury yields and US equities seem to have shrugged Trump off. GLD seems to have jumped, nowever.
"Matthew Yglesias @mattyglesias · 9h
Curbing central bank independence is bad, but the thing that’s actually much worse is the now-routine use of pretextual criminal prosecutions of the president’s enemies."
It is a bit late for the President's enemies to start claiming that.
This is the president that in Feb 2024 was forced to put up $454m as a bond against charges which were very clearly of no value following a case lead by NY attorney General Letitia James who got elected campaigning with promises to sue Trump.
So the irony here chimes with her complaints now that the charge against her of mortgage fraud is political. (The Trump charge was similar - property loans based on inaccurate paperwork, though the lender was happy to point out they had not issue with it).
Of course, the difference is that Trump was utterly guilty of the charges brought by the State of New York, based on fraudlent valuations of properties for both tax and lending purposes, as any banker in New York in the past 30 years would have told you. The charges against Powell are transparently pretextual. Even if the charges against James are true, which is not clear yet, they amount to a minor, very common (several Trump administration figures have done the same) paperwork error. Not like Trump's massive, systematic, persistent misvaluations over many, many years.
Nonsense - no guilt at all - a 100% fix.
As any banker in NY probably has told you.
Including the Deutsche Bank witnesses in court.
This is the Democrat delusion that explains why so many people voted Trump and think Trump is a better truth teller than Dems. TDS on steroids.
Sorry, but I am a New York banker myself, retired, and I know for a fact that his valuations were not remotely reliable years ago. No Democrat delusion necessary. And there was very mixed evidence in the DB discovery and testimony. Of course, they had to say their lending was appropriate in direct testimony -- or they would have had their own litigation problems -- but there were contradictory emails in the discovery and other parts of the record that indicated pretty clearly that they were swallowing the valuation problems in order to get the business at a time when DB needed the volume.
But then you also know that property firms are not expected to provide exact valuations, and lending banks do their own valuations.
The second part - that DB were accepting valuation issues because they needed the volume just confirms it all - it was a business decision done in full understanding of real valuations. They were not conned at all.
Thanks for the clarification.
No, Trump was agreed to be well below the level of integrity expected even of real estate borrowers. It is a felony to make a false statement to a federally insured bank, which Trump clearly did many times, including with Deutsche Bank.
You just said DB gave the loan as a business with full knowledge.
The judge and prosecutor dropped the case simply because they were no longer fighting an election for Kamala.
The prosecutor got elected because he promised to prosecute Trump.
I really don't know why you continue with this deleusion, but I guess TDS has a lot of victims.
It's lawfare, it is ugly, dishonest and actually illegal, but that is what it is. That Trump uses it against the first movers is only ironic.
Both can be true.
See, when WE do it, it's merely self-defense, at worst a reasonable and measured pre-emptive strike.
When they do it, The Boots Of Fascism/Communism/Whatever Are On The March!
If you mean Hypocrisy is a Thing. Then yeah.
Seems to be a common theme right now. All these things that have been done many times by others before are suddenly the worst thing in the world.
meanwhile USA under Trump backs off from conflict with both Russia and China and creates incredible Presidential crimes to distracts from the end to wars.
It's called Dog the Wag.
Let's wait a bit before taking a victory lap, what say?
But this is the Victory Lap - or at least the lap of shame from the defeated.
Ministry of War, Venezuela FFS, running from Yemen.
US has all kinds of dirty little victories planned, like the Syrian one, and the boxing in of Europe as Empire slaves. But small ones. Noisy is the main thing now - pretending it isn't in 3rd place already.
But the big things - Economy, military (hypersonics make maybe a couple of trillion of US investments in Carrier and jet aircraft redundant) and Soft Power (self-acknowledged and self-inflicted) have all switched from US to China, China.Russia, China over past 10 years. Not post Trump 2, mostly pre-Biden, quite a bit pre-Trump 1.
First, the US hasn't backed away from the War On Russia. A War on Iran also is baked in the cake.
Russia?? Seems to me it has.
Iran? We will see.
Essentially the question is did US destroy Iranian defence systems or was it a token strike to disguise teh Israeli need to stop losing.
If the first - why has Israel not attacked Iran directly itself?
2nd sounds more credible.
But I accept Iran is just Probaby not. Russia I reckon US has given up already. Small CIA units apart, the Generals have read the cards and said NO.
That is why US needs to be seen beating up little kids with extreme malice.
https://chatgpt.com/s/m_695afd82678081919ee078dfe68dc49a
My short story on prediction markets https://nimnim1.substack.com/p/poly-hell
Well, this interesting conversation can obviously continue, but let me close with a few observations. The bank-fraud statute is there to protect the Federal Deposit Insurance Fund, and only secondarily to protect the banks. So, if the banks take excessively risky action on the basis of fraudulent statements, that's not the end of the story: the FDIC also has an interest to be protected (and a reason to deter frauds). I don't understand the relevance of the Adelson/Gazan comments, but obviously, Mrs. Adelson, not being a Federally insured bank, can take whatever risks she wants with her money. It is an unfortunate fact, and contrary to the rule of law that prosecutors have felt the need to drop litigation as a result of the election: Trump is bad enough but Trump with immunity is worse. All the cases against Trump started out with perfectly legitimate bases: the political context doesn't change that. Whether Harris would have been worse is debatable but irrelevant to the legal issues posed here.
nihilism is not a synonim of unlikeable