Sunday Yellen

By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON (AP) — Federal Reserve Chair Janet Yellen on Sunday sketched a bright outlook for the U.S. economy and for inflation prospects in coming months, saying the impact of the recent hurricanes will likely slow economic growth slightly but only temporarily and should be followed by a rebound by year’s end.

Her comments suggested that the central bank will soon resume raising interest rates to reflect the strengthening economy. Most economists foresee the next rate hike — the third this year — coming in December.

Speaking to an international banking seminar, Yellen acknowledged that the persistence of undesirably low inflation this year has been a surprise. But she said she expected inflation to start picking up as the effects of temporary factors, such as falling prices for consumer cellphone service, begin to fade.

“Economic activity in the United States has been growing moderately so far this year, and the labor market has continued to strengthen,” Yellen said in a speech to a panel that included central bank officials from China, Japan and the European Central Bank.

Of the hurricanes that struck Texas, Florida, Puerto Rico and the Caribbean, Yellen noted that they caused enormous damage. But she added:

“While the effects of the hurricanes on the U.S. economy are quite noticeable in the short term, history suggests that the longer-term effects will be modest and that aggregate economic activity will recover quickly.”

Yellen said that the economy’s growth, as measured by the gross domestic product, might have slowed slightly in the July-September quarter as a consequence of the hurricanes but that growth is likely rebounding in the current quarter.

The Fed chair’s speech Sunday followed the central bank’s decision at its meeting last month to leave its benchmark short-term rate unchanged in a range of 1 percent to 1.25 percent. At the same time, the Fed announced that it would begin parings its enormous portfolio of bonds, which it had amassed after the 2008 financial crisis in an effort to hold down long-term loan rates for consumers and businesses. The move to let its balance sheet gradually shrink could mean higher rates on mortgages and other loans over time.

During a question period, Yellen was asked whether a booming stock market that some see as overvalued or potentially higher budget deficits resulting from the Trump administration’s tax cut plan had increased economic uncertainty.

Yellen declined to respond specifically but noted that the Fed’s staff has described stock prices as elevated. At the same time, she said market levels should be viewed in the context of a banking system that she called “dramatically improved” since the 2008 financial crisis.

The Fed chair said the administration’s proposed tax cuts may have boosted consumer and business confidence but so far appear to have had little effect on investment or spending decisions. She said the Fed was taking a “wait and see attitude” on how the tax program might affect the economy given the many unknowns about what it might look like when the plan emerges from Congress.

In his presentation, Zhou Xiaochuan, head of China’s central bank, said that his country is trying to cut excess capacity in its steel and cement industries by 10 percent but that China requires a sizable output in those areas to support an infrastructure construction program. The Trump administration has been pushing China to reduce production in such areas as steel, saying its overcapacity has depressed global prices for steel and hurt American producers.

Haruhiko Kuroda, head of the Bank of Japan, said that his country’s economy was expanding moderately and that heightened global political risks so far haven’t destabilized financial markets. He did not say what risks he was referring to, but investors have been focusing on the standoff with North Korea over its increased missile tests and development of nuclear weapons.

The officials spoke before the Group of 30, an international body of bankers and academics. Gary Cohn, who leads President Donald Trump’s National Economic Council, spoke on a separate panel about the administration’s efforts to scale back some of the tighter rules imposed on the U.S. financial sector after the 2008 crisis. In particular, he reiterated that the administration supported easing restrictions on smaller banks.

Yellen’s appearance Sunday came as her future at the central bank is in doubt, with her four-year term as chair ending in February. Trump has been considering several candidates for the post, in addition to the possibility of offering Yellen a second term. The other candidates include Jerome Powell, a member of the Fed’s board; Kevin Warsh, a former member of the board; John Taylor, a Stanford University economist; and Cohn.

Last week, administration officials said Trump is likely to announce his decision with a month.

 

by the Numbers – Support / Resistance

Gold & Silver are performing their usual consolidated price action. Nothing much to add their.

The new target for Gold is the 1323s. Anything above 1301 is Bullish on the 15/60

Silver – 17.30s to 17.52/17.87 Positive Zone.

The Broad indices are a complete Algo driven whipsaw is this consolidation zone.

The long levels on the ES broke yesterday.

2498.75 is the pivot level at resistance – bullish above / bearish below. The ES rallied into resistance only to reverse again.

The YM broke it’s long as well… far more technical than the ES… 22307 is the LIS all downside risk.

The NQ broke hard, a retracement in the FANGS is coming due. 5911.25 is the LIS – bullish above, bearish below.

CL is kicking serious ass to the upside after a prolonged consolidation – target was hit and repeated extensions are possible. 51.19s remains the LIS for S/R.

Dollar/Yen after Yellen/FED sold off – we ended last week in a trailing short – theYen should rally to the 112.07 – the 112.22s = DX weakness – a short squeeze.

I’m expecting a reversal day today at some point = bulls have to defend today or the indices are going to drop and drop hard.

There will be a strong retracement from lower targets – trend entry is key to profiting from these moves down. They very rarely made easy any longer.

Chasing gets a trader lit up quickly when the tape gets moving.

Markets rallying with Bonds rallying… flipped for the first time in a long time, watch bonds, protection is going on again.

Eye of the Storm

Back to the drawing board for the Federal Reserve according to William Dudley… it’s time for the Federal Reserve to “rethink” inflation models which are failing to support further rate hike adjustments within their “Model.”

The ECB press conference last night was interesting – Mario Draghi was congratulated on his recent birthday nay one reporter… she then turned to a series poignant questions regarding Asset purchases – which were skirted.

The tough questions found rambling and often quite absurd pronouncements of stability and crisis management. Greece and Cyprus have been abandoned, their collective economies have been left for dead.

October, according to Draghi, is where it all lines up… They will begin to announce their intentions in this timeframe.

Draghi very briefly discussed the Euro’s strength and potential effects on exports and inflation targets, there was nothing specific.

Nothing aggressive, concrete or remotely indicative of future Policy – other than continued Liquidity injections with laser like focus to project control over Member Bond Markets.

I suspect the 125 level will be about it by October, it’s been an open target and one that leads the DX to 86-88 potential.

The Euro is up 14.3% this year, a very large move – the Yuan has reversed and is making new highs.

The long end of the curve had a very large imbalance yesterday – Bonds were halted. A noticeable and telling sign arrangements are being shuffled rapidly.

Gold Reintroduced – PetroGold

The United States Dollar for Energy trade is winding down.

China’s power elite has provided an alternative to the U.S. privilege of Currency Senoirage – they are “Prepared” to link Oil to Gold convertibility.

PetroDollars are not long for this world, the Dollars twilight loses another candle to the winds of change.

China sees new world order with oil benchmark backed by gold

Yuan-denominated contract will let exporters circumvent US dollar.

It should be noted – this is Not a Peg to Gold as some are suggesting, but a link to convertibility.

China’s move will allow exporters such as Russia and Iran to circumvent U.S. sanctions by trading in yuan. To further entice trade, China says the yuan will be fully convertible into gold on exchanges in Shanghai and Hong Kong.

 

 

 

September 15th

Janet Yellen will raise interest rates and confirm asset normilzation by implementing sales on the Fed’s Balance Sheet.

We could trade up and into this pivotal event – with OpeX one day behind.

I was asked via email what my thesis is for the prior post.

This is my thesis – train wreck ahead.

It is frankly the perfect setup…

***NOKO remains the vector for undoing this – this would provide the FED with cover it needs to stand pat. It would need to occur 3 to 6 days in advance.

Regulators to End Crypto-Anonimity

S.1241

115th Congress concerned with Tax Revenues.

Read twice and referred to the Committee on the Judiciary.
Action By: Senate

“To improve the prohibitions on money laundering, and for other purposes.”

BitCoin holders: There is No escape.

Section 13 would also mandate two reports: (1) a GAO report on the impact of the amendments on law enforcement and the prepaid access industry; and (2) a Department of Homeland Security report detailing a strategy to detect prepaid access devices and digital currency at border crossings and ports of entry.

You must declare or forfeit.

§ 5333. Prohibition on concealment of ownership of account

“(a) In General.—No person shall knowingly conceal, falsify, or misrepresent, or attempt to conceal, falsify, or misrepresent, from or to a financial institution, a material fact concerning the ownership or control of an account or assets held in an account with a financial institution.

“(b) Penalties.—A person convicted of an offense under subsection (a), or a conspiracy to commit such offense, shall be imprisoned for not more than 10 years, fined not more than $1,000,000, or both.

“(c) Forfeiture.—

“(1) CRIMINAL FORFEITURE.—

“(A) IN GENERAL.—The court, in imposing penalties under subsection (b), shall order that the defendant forfeit to the United States any property involved in the offense, or a conspiracy to commit such offense, and any property traceable thereto.

“(B) PROCEDURE.—Section 413 of the Controlled Substances Act (21 U.S.C. 853) shall govern the seizure, restraint, and forfeiture of property under this paragraph.

“(2) CIVIL FORFEITURE.—

“(A) IN GENERAL.—Any property involved in a violation of subsection (a), or a conspiracy to commit such violation, and any property traceable thereto may be seized and forfeited to the United States.

“(B) PROCEDURE.—Seizures and forfeitures under this paragraph shall be governed by the provisions of chapter 46 of title 18 relating to civil forfeitures, except that such duties, under customs laws described in section 981(d) of title 18, given to the Secretary of the Treasury shall be performed by such officers, agents, and other persons as designated by the Secretary of Homeland Security or the Attorney General.

“(3) TREATMENT OF CERTAIN PROPERTY AS INVOLVED IN THE OFFENSE.—In this subsection, the term ‘property involved in’ includes any assets credited to, attempted to be credited to, or contained in the account.

“(d) Financial Institution.—In this section, the term ‘financial institution’ means any entity defined under section 5312(a)(2), or the regulations promulgated under this title, that is required to—

“(1) implement a customer identification program under this title, or the regulations promulgated under this title; or

“(2) conduct customer due diligence under this title, or the regulations promulgated under this title.”.

(b) Table Of Sections.—The table of sections for subchapter II of chapter 53 of title 31, United States Code, is amended by adding at the end the following:


“5333. Prohibition on concealment of ownership of account.”.