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The Fed is never going to raise rates; Anglosphere Decline Continues
Topic Started: 3 Oct 2015, 09:12 AM (2,215 Views)
Black Panther
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The Fed is never going to raise rates

The September jobs report was a stinker.

Job growth was less than expected, the unemployment rate was unchanged, wages disappointed, revisions to August’s report was bad, and the participation rate fell to a new 38-year-old.

And following this news, Chris Rupkey, chief financial economist at MUFG and one of the most bullish strategists on Wall Street, has thrown in the towel on the Fed raising rates in 2015 — and maybe ever — while also tossing out the idea that the US economy can be the engine that powers a faltering world economy.

In an email blast following Friday’s report, Rupkey wrote that “rates will never go up again.”

“The jobs market struck out in September as far as the Fed’s concerned,” Rupkey wrote on Friday. “No rate hike in October now certainly, and 2015 looks increasingly impossible. If the Committee was looking for more improvement this isn’t it.”

Rupkey added:

“We are reassessing our Fed call for December at the moment. The idea the U.S. economy could power forward while the rest of the world is stalling out, that idea can be put in the garage bin. The biggest engine for world growth looks to be sputtering here, and interest rates are unlikely to be the first in the world to come off of the zero bound.”

And so not only was the jobs report a disappointment, but enough for Rupkey to sound the alarm on the overall health of the US economy.

On Thursday, we saw US auto sales rise to a 10-year high and this week we’ve highlighted the divergence between the fortunes of US manufacturing and the US consumer.

The latest jobs number, however, looks in the eyes of at least some strategists to be putting this idea — that the US consumer can power not just the US economy but a faltering global economy — in doubt.

As for the Fed, this report seems likely to keep them on hold through year-end.

http://www.businessinsider.com.au/us-economy-stalling-according-to-economist-chris-rupkey-2015-10
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Tick Tock
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Bloody hell one minute its they are going to raise rates the next its not.

Seems like Janet Yellen is either incompetent or she's just lieing trying to keep the market inflated for as long as possible.

I'd say its a bit of both actually!
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createdby
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Can't raise IR or bond prices collapse.

Bond prices collapse and everything collapses: balance sheet of Fed and balance sheet of all financial institutions who hold bonds as assets like banks and pension and hedge funds.

Banks will have to raise capital or reserves to meet liquidity requirements. Could cause some bank runs if they can't. If they can, stock price of banks collapse.

Pension and hedge fund bond assets collapse and withdrawals, from retirees or panicked investors, will put pressure on their balance sheets. They can meet liquidity obligations by selling shares and bonds but that will put more downward pressure on asset prices.

Share market collapses and wealth effect will take a further beating which will have a downward spiral effect on aggregate demand, feeding on the woes of emerging market deflation.

The obvious mathematical answer that does't entail a recession or depression is negative IR where they steal the cash savings of savers or more QE to kick the can down the road.

I think one way out of this quagmire without the unemployment scenario that CB's astutely avoid is QE for the people as suggested by Steve Keen and Corbyn. But this is very much a political question.
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zaph
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My, my, at Waterloo Napoleon did surrender
Oh yeah, and I have met my destiny in quite a similar way
The history book on the shelf
Is always repeating itself

Waterloo - I was defeated, you won the war
Waterloo - Promise to love you for ever more
Waterloo - Couldn't escape if I wanted to
Waterloo - Knowing my fate is to be with you
Waterloo - Finally facing my Waterloo

My, my, I tried to hold you back but you were stronger
Oh yeah, and now it seems my only chance is giving up the fight
And how could I ever refuse
I feel like I win when I lose

Waterloo - I was defeated, you won the war
Waterloo - Promise to love you for ever more
Waterloo - Couldn't escape if I wanted to
Waterloo - Knowing my fate is to be with you
Waterloo - Finally facing my Waterloo

So how could I ever refuse
I feel like I win when I lose -

Waterloo - Couldn't escape if I wanted to
Waterloo - Knowing my fate is to be with you
Waterloo - Finally facing my Waterloo
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newjez
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zaph
3 Oct 2015, 01:47 PM
My, my, at Waterloo Napoleon did surrender
Oh yeah, and I have met my destiny in quite a similar way
The history book on the shelf
Is always repeating itself

Waterloo - I was defeated, you won the war
Waterloo - Promise to love you for ever more
Waterloo - Couldn't escape if I wanted to
Waterloo - Knowing my fate is to be with you
Waterloo - Finally facing my Waterloo

My, my, I tried to hold you back but you were stronger
Oh yeah, and now it seems my only chance is giving up the fight
And how could I ever refuse
I feel like I win when I lose

Waterloo - I was defeated, you won the war
Waterloo - Promise to love you for ever more
Waterloo - Couldn't escape if I wanted to
Waterloo - Knowing my fate is to be with you
Waterloo - Finally facing my Waterloo

So how could I ever refuse
I feel like I win when I lose -

Waterloo - Couldn't escape if I wanted to
Waterloo - Knowing my fate is to be with you
Waterloo - Finally facing my Waterloo
Well, knowing me and knowing you, there is nothing we can do...
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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zaph
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newjez
3 Oct 2015, 04:13 PM
Well, knowing me and knowing you, there is nothing we can do...
He is your panther.
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newjez
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zaph
3 Oct 2015, 04:41 PM
He is your panther.
we never thought that we could lose
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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Gossamer
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44th most prolific poster on APF

Mike said the Fed would increase interest rates this year.
Common sense is a curse - those who have it need to suffer dealing with those who don't have it.

APF idiot list
Nelson
Black Panther
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herbie
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Gossamer
6 Oct 2015, 09:55 PM
Mike said the Fed would increase interest rates this year.
Shady reckoned the RBA would raise rates a while back.

DAMN it's nice ta see the fucka get one wrong occasionally - Despite the fact it was the only one ever I can recall hoping he'd get right ... :)
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Andrew Judd
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The time will come when the fed will have to raise rates no matter what the economy is doing.
Edited by Andrew Judd, 6 Oct 2015, 11:14 PM.
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