Cold Turkey...

Now that rescue cycle is deemed over, the Federal Reserve has decided to reverse the QE, to get its assets and liabilities downsized. From a QE high of $4.5 trillion they have shrunk the balance sheet down to $4.1 trillion.

It is no coincidence that this process started in earnest this January and coincides with the U.S. stock markets going into cardiac arrest or at least changing its never-ending upward trend into a serious of vicious slumps and rallies.

The rest of the world who have bathed in cheap dollar finance are especially suffering from this credit ‘cold turkey’ and markets and economies all over the world are suffering the beginnings of an economic winter.

Now the danger is reverse-QE will crash the markets and crush the global economy and the Federal Reserve is not stupid. You can see the $80 billion stated number as about equivalent to the level of economic growth in the U.S. economy. 

It’s a number that could strike a balance between liquidity withdrawn and liquidity generated. As such, reverse-QE might not break the system. 

But fear and worry can take the system down. Just a thought.

Brett...

Brett McGurk, special presidential envoy for the Global Coalition to Defeat ISIS, 

had been planning to exit his post in February 2019. But sources said  he informed 

Secretary of State Mike Pompeo that he will accelerate his departure due to a strong 

disagreement with President Trump's decision to withdraw 2,000 U.S. troops from Syria,  

McGurk submitted his resignation, just one day after Defense Secretary James Mattis

 quit his post citing fundamental disagreements with the commander-in-chief.

The special envoy was publicly left in the lurch by the president's declaration that

 he was pulling U.S. forces out of Syria, against the advice of his top national 

security advisers.

It appears that many in the State Dept. wants to continue the war. Haven't we 

learn something about the previous wars we have been in? Was there ever a good outcome? 

 Just a thought.

Ranked...

 

Alcohol is the most socially acceptable drug on the market and the most accessible.  The general public still has a tendency to believe alcohol is an acceptable form of relaxation. 

Alcohol is the third leading preventable cause of death in the U.S.  Alcohol causes 88,000 deaths each year. 

Alcohol is different than other illicit substances  in that it can cause overdose deaths and  also kill people slowly by deteriorating the body.

According to a study released in 2010 by a group of British scientists, alcohol was rated the most harmful drug overall and almost three times as harmful as cocaine or tobacco. In comparison.

This ranking encouraged the scientists to say that aggressively targeting the harms of alcohol is a necessary public health strategy.

Falsche...

A respected German mainstream magazine fired one of its award-winning contributors after discovering he included fake news in several stories.  

Der Spiegel admitted that reporter and editor Claas Relotius had "falsified his articles on a grand scale and even invented characters, deceiving both readers and his colleagues."

Some of the stories were set in the United States and played to unpleasant European prejudices about Americans, raising questions as to why Der Spiegel accepted them so trustingly.

Relotius had worked for Der Spiegel in various capacities since 2011. He contributed more than 50 articles, of which at least 14 contained fabrications.

Some of these tainted pieces were nominated for, or even won, awards, and the freelancer was hired by Der Spiegel as an editor. He remained in that job for a year and a half ... Relotius was honored in 2014 by CNN as its Journalist of the Year.

Satisfaction...

We think we want to be happy. Yet many of us are working toward some other end, according to Daniel Kahneman, winner of the 2002 Nobel Prize in economics.

Kahneman contends that happiness and satisfaction are distinct.

Happiness is a momentary experience that arises spontaneously and is fleeting. Meanwhile, satisfaction is a long-term feeling, built over time and based on achieving goals. 

 Spending time with friends is highly effective. Yet those focused on long-term goals that yield satisfaction don’t necessarily prioritize socializing, as they’re busy with the bigger picture.

We’re not as interested in happiness as we may claim.  We're actually want to maximize our satisfactions.

 Life satisfaction is connected to social yardsticks–achieving goals, meeting expectations and accumulate wealth.   Money has a significant influence on life satisfaction, whereas happiness is affected by money only when funds are lacking. Poverty creates suffering, but above a certain level of income that satisfies our basic needs, wealth doesn’t increase happiness.  Just a thought.

Backfire...

The deal was done, and former national security adviser Michael Flynn was cruising toward a sentence of no prison time after admitting he lied to the FBI when interviewed about his contacts with the Russian ambassador to the United States.

But then, Flynn and his lawyers did something they came to regret: They made a filing to the court suggesting the FBI set him up.

U.S. District Judge Emmet G. Sullivan showed his deep displeasure with Flynn at one point asking a prosecutor whether the retired general could be charged with treason. 

The judge told the former national security advisor "arguably you sold your country out"  and warned the fallen Army lieutenant general that he might be sent to jail if he did not agree to delay the hearing.

Mueller's schedule suddenly upended by a defendant with cold feet and a judge with a hot temper.

Shut Down...

A partial shutdown of the government officially went into effect at midnight Saturday as the House and Senate adjourned late Friday with negotiations stalled between the White House and congressional leaders over border wall funding. 

The House and Senate are expected to reconvene at noon on Saturday to continue negotiations.

Many House and Senate lawmakers headed home after leaders promised to provide 24-hour notice ahead of any funding vote. Late Friday, President Donald Trump tweeted a video of himself speaking to the importance of border security.

The first United States federal government shutdown of 2018 began at midnight EST on Saturday, January 20, 2018, and ended on the evening of Monday, January 22. The shutdown began after a failure to pass legislation to fund government operations and agencies. This stemmed from disputes over the extension of status of persons affected by the Deferred Action for Childhood Arrivals (DACA) immigration policy,

Underperform...

So much of the bull market in risk assets over the last nine years was linked to Federal Reserve stimulus put in place to save the economy during the financial crisis. 

Low rates and other easing measures fueled a boom in stocks by enabling companies to borrow and aggressively buy back their own shares. A lot of the easy money injected into the system found it’s way into stocks because there was no alternative, lifting equity valuations to high levels.

All assets have underperformed in 2018 simply because the Fed is hiking Interest rates and reducing the balance sheet.

That’s why the market fell to new lows  specifically when Fed chief Jerome Powell said the unwinding of the central bank’s balance sheet would continue at its current pace.

We’ve been in an economic expansion for the past seven to eight years, which is already very long. A recession is likely to come within the next two years.”

Cyber...

The United States and three allies chastised China for economic espionage.

Prosecutors charged Zhu Hua and Zhang Jianguo in hacking attacks against the U.S. Navy, the space agency NASA and the Energy Department and dozens of companies. The operation targeted intellectual property and corporate secrets to give Chinese companies an unfair competitive advantage, they said. 

Britain, Australia and New Zealand joined the United States in slamming China over what they called a global campaign of cyber-enabled commercial intellectual property theft, signaling growing global coordination against the practice. 

The hackers breached the networks of Hewlett Packard and IBM, then used the access to hack into their clients’ computers. 

Nothing is new here !... Just a thought. 

Empathy...