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April
14
2023

Fed Minutes Circus: Banking Crisis to Cause Recession
Gary Tanashian

Fed minutes show just how out of touch the eggheads are

The Fed minutes were published for all to see (in my case, ignore until this morning). Step right up, grab some cotton candy and listen as the Federal reserve, which is raising the funds rate in order to try to contain and repel the inflation it created in 2020 through willful and steroidally aggressive policy, regales you with official version of the reasoning for a coming recession.

In my opinion, the Fed will welcome a recession because the Fed knows that the economic cycle created out of the 2020 pandemic tank job was almost literally printed after the epic ramp in money supply that ultra-stimulated it was printed through various means of bond market manipulation on the long end, the short end and everything in between, with a whole lot of MMT, or Modern Monetary Theory, err that is, TMM, Total Market Manipulation for good balance sheet bloating measure.

Fed expects banking crisis to cause a recession this year, minutes show

In the article you’ve got your CNBC guy, what’s his name, video blabbing the details to us and this Swonk woman, whose name I’ve heard before and I think is an economic expert of some kind, saying the Fed should pause at its next meeting. I don’t listen to them, but there they are if you want to. Eggheads everywhere; in the FOMC’s meeting chambers, at CNBC and most grotesquely, in Janet Yellen’s office or any other’s office acting as a mouthpiece for the political party in power.

But I’ve digressed. Here is one chart (Libor/T-bill yield), an indicator of banking sector stress, as yet begging to differ that the banking crisis will act as a recession trigger. The Fed appears to be reacting to the spike and the media uproar, although you would think they have a better view into the internals of the banking industry than you or I. So maybe they know something we don’t. Or maybe they are using slight of economic hand to point us in a certain direction.

But even if they do know something more about the banking sector situation the recession is likely coming regardless and it will be the ‘bust’ side of the boom/bust continuum the Fed itself has been instrumental, if not primary in creating. It’s one part disturbing and one part comical how these clowns always find ‘reasons’ other than their own previous actions for the bad things that happen along the boom/bust continuum.

The positive effects of the 2020 inflation have long since worn off and now even the corrosive effects of it are fading. It’s currently as we projected months ago, a pleasant Goldilocks phase. Screw the banking crisis for now. It’s noise. The real recession trigger will come as Goldilocks herself also fades into a concerning lack of inflation signals on the macro. #comical and oh so Keynesian.

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Gary Tanashian of nftrh.com successfully owned and operated a progressive medical component manufacturing company for 21 years, keeping the company’s fundamentals in alignment with global economic realities through various economic cycles. The natural progression from this experience is an understanding of and appreciation for global macro-economics as it relates to individual markets and sectors.

Biiwii.com (RIP 2019 as there were just not enough hours in the day for two websites) was created in 2004 as a way to help communicate a message about deeply rooted problems with too much debt and leverage within the inflated financial system. Our concerns were confirmed and our message justified in 2007 as the system began to purge these distortions, resulting in a climactic washout extending from October, 2008 to March, 2009.

But the URL ‘biiwii.com’ came from the old saying ‘but it is what it is’ and this sentiment addressed the need to remain impartial about the markets, despite personal beliefs. Over the long-term, the world changes and any successful market participant should be ready to accept changes or revisions to a given plan.

Geek-like interests in technical analysis and human psychology, and various unique macro market ratio indicators were added to the mix, with the result being a financial market report, Notes From the Rabbit Hole (NFTRH), combining these attributes to provide a service that is engaged and successful in all market environments.

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