Economic Calendar - FOMC Decision On Wednesday Highlights This Week In Economic News

The FOMC decision on September will be a highlight economic event for the week, since it is widely expected that the Fed will make some announcement on the taper.

Thinking runs to a small cutback in new purchases of debt in the 10 to 15 billion dollar per month area.

Bloomberg TV was beaming with the econmic numbers from this morning and a purported manufacturing renaissance. . I am glad that I looked them up. They missed the broad consensus in both Empire Manufacturing and in Industrical Production.

TIC flows might provide a surprise, or not, but the FOMC will be the big mover if there is one, excepting of course some black swan number which is not likely by definition.

NAV Premiums of Certain Precious Metal Trusts and Funds

The price capping in the precious metals is particularly obvious, and may be associated with a key FOMC meeting announcement on Wednesday.

Given that there is a steady offtake of physical supply the antics do not matter so much to the longer term.

Summers Withdraws Himself From Fed Chairmanship Consideration

"...the biggest risk we can take is to try the same old politics with the same old players and expect a different result."

Barack Obama, Democratic National Convention 2008


"Like a dog returns to its vomit, so a fool repeats his folly."

Proverbs 26:11

Larry Summers withdrew himself from the nomination as Fed Chairman today, in order to save Barack Obama from the embarrassment of having to withdraw it himself in the face of staunch opposition from a very large number of economists and Congressional members of both parties.

That the consideration for Summers as Fed Chairman went as far as it did despite such broad opposition, far beyond that of just economic progressives, demonstrates the overall poor judgment that the President has shown in economic matters from the very beginning of his presidency.

Obama has a remarkable predilection for repeatedly ignoring the wishes of his electoral base and the sound principles of genuine reform in favoring the wishes of the biggest banks on Wall Street and the monied interests.

This makes it more likely that Janet Yellen will be the next Fed Chairman, which would mark a move towards more monetary easing as Yellen is an inflation dove.   It does not speak to the regulatory activity of the Fed which has been accommodative towards the Big Banks.  But perhaps not as much as it might have been under Summers who is a long time Rubinite and noted for an aggressive bias against financial regulation. 

From the Globe and Mail:

Obama accepts ex-aide Summers's decision to not seek U.S. Fed chairmanship
WASHINGTON — Reuters
Sunday, Sep. 15 2013, 4:54 PM EDT

U.S. President Barack Obama said on Sunday he has accepted the decision of his former top economic aide Lawrence Summers to withdraw from consideration as chairman of the Federal Reserve.

“Larry was a critical member of my team as we faced down the worst economic crisis since the Great Depression, and it was in no small part because of his expertise, wisdom, and leadership that we wrestled the economy back to growth and made the kind of progress we are seeing today,” the President said in a statement.

“I will always be grateful to Larry for his tireless work and service on behalf of his country, and I look forward to continuing to seek his guidance and counsel in the future,” he said.

Dear Mr. President,

I am writing to withdraw my name for consideration to be Chairman of the Federal Reserve.

It has been a privilege to work with you since the beginning of your Administration as you led the nation through a severe recession into a sustained economic recovery built on the policies to promote employment and strengthen the middle class.

This is a complex moment in our national life. I have reluctantly concluded than any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the Administration, or ultimately, the interests of the nation’s ongoing economic recovery.

I look forward to continuing to support your efforts to strengthen our national economy by creating a broad based prosperity and to reform our financial system so that no President ever again faces what you and your economic team faced upon taking office in 2009.

Sincerely yours,

Lawrence Summers

Andrew Bacevich: The New American Militarism

"To go beyond the bounds of moderation is to outrage humanity. The greatness of the human soul is shown by knowing how to keep within proper bounds. So far from greatness consisting in going beyond its limits, it really consists in keeping within it."

Blaise Pascal

Bacevich is quite insightful. I should point out that the actual talk itself is about 25 minutes or so. The rest of this video is questions from the audience.

Some of his off the cuff eloquence in the second part in which he answers questions is remarkable. Don't be put off by the questions which are hard to hear.

One sentence which he throws out as part of a long answer seems to be a nice summation of his major hypothesis.

"The unrealistic expectations of what military power can do, and the recklessness with which we use it, don't serve the nation's interest, or the interests of stability more broadly."

While I like most of what he says, and I understand the point he makes about the role citizen-soldier in the latter part of the questioning in response to some other questions, I think he is assuming that the reinstitution of a draft would bring about more political accountability. His notion is that more parents would demand accountability from the government if more of their children were involved.

I think that assumption is optimistically mistaken. People's wealth is broadly being taken by the government and too often abused. There is no more level of accountability in this that I can see, given the current distance of the monied elites from the root source of the public will. I think they have become so isolated in their group thinking that they have lost touch with the people. And this will be resolved at some point, as it always does when the powerful forget their kinship with mortality and their obligations to others.



As you may have read, Bacevich is a self-described 'fan' of Reinhold Niebuhr. I looked up this quote from Niebuhr, and thought it might be particularly appropriate for us at this time.  The sense of social cohesion and interdependence amongst people, along with a few other traditional perspectives, seems to be given too shallow consideration in our era of the ascendancy of the narcissistic few and the cult of unbridled greed.

“Nothing that is worth doing can be achieved in our lifetime; therefore we must be saved by hope.

Nothing which is true or beautiful or good makes complete sense in any immediate context of history; therefore we must be saved by faith.

Nothing we do, however virtuous, can be accomplished alone; therefore we must be saved by love.

No virtuous act is quite as virtuous from the standpoint of our friend or foe as it is from our standpoint. Therefore we must be saved by the final form of love which is forgiveness.”

Reinhold Niebuhr, The Irony of American History