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Biden’s Unusually Late Fed Chair Decision Reportedly Expected As Soon As Today

Biden’s Unusually Late Fed Chair Decision Reportedly Expected As Soon As Today

After months of speculation, President Biden is finally expected…

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This article was originally published by Zero Hedge

Biden’s Unusually Late Fed Chair Decision Reportedly Expected As Soon As Today

After months of speculation, President Biden is finally expected to announce his pick for who will lead the Fed for its next term as soon as this week, according to a WSJ report published Sunday evening, while Punchbowl News reported Monday morning that the decision could arrive before the end of Monday’s session.

And as we have been signaling for months now, it looks like the decision will come down to between whether to renominate Jay Powell for a second four-year term, or to instead elevate Democrat Lael Brainard. WSJ says Biden is ultimately looking for “continuity” when it comes to Fed policy.

Some have described the decision over who will next lead the Fed as the most important move left to make on Biden’s near-term agenda (which is saying a lot considering looming battles over polishing off his ‘BBB’ agenda, as well as raising the debt ceiling, all while the US economy sees an inflationary supernova).

One River Asset Management CIO Eric Peters pointed out over the weekend that Fed Chairman Jay Powell’s greatest political value to President Biden is as a political scapegoat should inflation continue to soar during and after the holidays.

“I need to decide,” whispered Biden to himself, struggling, unsure.

“Lael is just terrific, no doubt, and her Fed wouldn’t dare cut off my funding,” thought the President, old enough to remember bond vigilantes.

“But you can’t help but like Jay, a fine gentleman, a decent human being, and face it, he’s still buying over $100bln of bonds a month with CPI humming hotter than 6%,” thought Joe, having lived through the 1970s inflation. Heck, he was born during WWII and grew up during the post-war financial repression.

“Hard to say we need someone more dovish than Powell,” whispered Biden. But of course, all such considerations were beside the point and Joe knew it deep down.

The only thing that mattered now, was whether it would be better to fire Powell before or after the Democrats lose mid-terms. Because at this point in the cycle, Jay’s greatest political value is in being a scapegoat.

Even the WSJ acknowledged that the decision on the Fed chair position will be “largely political” – despite the fact that the Fed is supposed to be an apolitical institution –  after the WSJ editorial board said last week that Biden had recently met with both candidates. Then again, the market has had plenty of time to digest this fact ever since Sen. Elizabeth Warren demanded that Powell – whom she described as “dangerous – resign during a Congressional hearing earlier this fall. Senior WH officials have reportedly confirmed that the decision will come before Thanksgiving. As for whether Biden will continue President Trump’s “tradition” of replacing the Fed chair with a member of his own party, doing so would, in Biden’s case, mean replacing Powell with Brainard, like Trump replaced Janet Yellen with Powell.

As for betting markets, curiously, PredictIt betting markets have continued to price in much higher odds of Biden sticking with Powell over Brainard.

Source: PredictIt

And when it comes to why Powell has left his decision on the Fed chair to so late in the year, anonymous sources told WSJ that he and his advisers see little upside in a decision that will inevitably be controversial. The thinking is why rush a ‘no-win’ situation, which isn’t technically due until early next year.

President Biden has left the decision to much later in the year than his recent predecessors, Additionally, Biden has one vacancy to fill on the seven-seat Fed board of governors, with two more slots that can be filled by January.

After all, what would better signal “continuity” than sticking with the guy who’s already in there?

Tyler Durden
Mon, 11/22/2021 – 08:22




Author: Tyler Durden

Economics

Exxon’s Planned Pay Raises This Year Won’t Even Keep Up With Inflation

Exxon’s Planned Pay Raises This Year Won’t Even Keep Up With Inflation

Despite the company’s good year so far, Exxon’s coming pay raises for…

Exxon’s Planned Pay Raises This Year Won’t Even Keep Up With Inflation

Despite the company’s good year so far, Exxon’s coming pay raises for employees will come in below inflation, new reports suggest. 

Salaries are going to rise about 3.6% for employees who deserve the merit-based raises, reporting from the Seattle Times and Bloomberg says. The largest increases are going to be going to those working in the company’s upstream division that drills for oil and natural gas, the report says. 

Exxon spokesperson Casey Norton said: “Total compensation is highly competitive relative to other companies with whom we compete, both in the marketplace and for talent. Inflation is one of many variables we assess.”

The increases will apply to Exxon’s U.S. office employees and not union contract workers, many of whom already have earned promotions and will get a 5% boost on top of their regular raises. 

Bloomberg writes that the below-inflation increases are a sign of how many white-collar Americans aren’t in line for the kind of salary raises seen for other cohorts such as truck drivers and factory workers amid labor shortages and a spike in inflation”. ‘

Recall, just two days ago, we reported that Exxon said it was on track to meet its 2025 emissions goals four years early. 

In Exxon’s full new corporate plan, which can be found on its website here, the company said it “plans to increase spending to $15 billion on greenhouse gas emission-reduction projects over the next six years while maintaining disciplined capital investments.”

The oil supermajor also said it plans on maintaining capital investments between $20 to $25 billion, per year, through 2027. The company said it has repaid $11 billion in debt, to date, in 2021. Exxon says it’ll be “comfortably” in its range of targeted debt-to-capital ratio by year end.

These plans, of course, follow our reporting in October that the company was considering abandoning some of its oil and gas projects to appease environmental advocates.

The company’s board, we noted in October, which includes three directors nominated by activist investors, had “expressed concerns about certain projects, including a $30 billion liquefied natural gas development in Mozambique and another multibillion-dollar gas project in Vietnam.”

The change in strategic direction comes as Exxon’s board is facing growing pressure from investors to restrain its fossil fuel investments and limit its carbon footprint. The board is also considering the carbon footprint of the new projects, and how they would affect the company’s ability to meet environmental promises it has made. 

Back in September we reported that as part of appeasement of the ESG lobby, the oil giant planned on implementing disclosures of shale emissions. The company announced it would start measuring its methane emissions from production of natural gas at a facility it owns in New Mexico. Exxon joins other shale gas producers, like EQT, who already provide similar data. 

Tyler Durden
Sun, 12/05/2021 – 09:55

Author: Tyler Durden

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Economics

DAX index forecast after new measures for the unvaccinated

Germany’s DAX index has weakened on a weekly basis and closed the week at 15,169 points. The Omicron variant of the coronavirus continues to keep investors…

Germany’s DAX index has weakened on a weekly basis and closed the week at 15,169 points. The Omicron variant of the coronavirus continues to keep investors in a negative mood, and according to Germany’s Health Minister Jens Spahn, Germany is also not ruling out a new lockdown.

Financial markets are reacting negatively because it is still unknown to what degree the vaccines will be effective against the new strain and would it slow economic progress.

Robert Koch Institute (RKI), a disease and control center in Germany, reported that more than 102,000 people in Germany have died as a result of coronavirus and the country continues to see a record-breaking number of cases.

Germany has introduced new measures last week, and only vaccinated or recently recovered from Covid will be allowed to go to cinemas, leisure facilities, restaurants, and shops.

It is also important to mention that unvaccinated people can only meet two people from another household, and Germany will limit the number of people at large events.

Germany’s fourth wave of Covid is the most severe so far, and Angela Merkel warned that hospitals were stretched to the point of patients being moved to different areas for treatment. Acting Chancellor Angela Merkel added:

We have understood that the situation is very serious and that we want to take further measures in addition to those already taken. A nationwide vaccination mandate could come into effect from February 2022, after it is debated in parliament and following guidance from Germany’s Ethics Council.

The new strain also complicates the outlook for how aggressively the European Central Bank would normalize monetary policy to fight inflation.

The degree of ECB’s concern about the economic situation will significantly influence stock markets in the near term, and for now, everything indicates that growth forecasts will likely be downwardly revised.

According to preliminary estimates, the German Consumer Price Index reached a record of 6% YoY in November, which confirms that inflation had spread more than previously expected and that the risk of persistent inflation has risen.

Germany’s GDP grew by 1.8% in the third quarter, but the rising inflation, covid pandemic, and the world’s supply chains crisis represent a serious issue for economic stability.

DAX remains under pressure

Data source: tradingview.com

DAX index weakened last trading week, but it continues to trade above the 15,000 points. Further turmoils should not be discounted, and if the price falls below 14,800 support level, the next target could be around 14,500 or even 14,000.

Summary

Germany announced a nationwide lockdown for the unvaccinated, and according to new measures, only vaccinated or recently recovered from Covid will be allowed to go to cinemas, leisure facilities, restaurants, and shops. The Omicron variant of the coronavirus continues to keep investors in a negative mood, and further turmoils for the Dax index should not be discounted.

The post DAX index forecast after new measures for the unvaccinated appeared first on Invezz.






Author: Stanko Iliev

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Economics

Berkshire’s Charlie Munger: Market “Even Crazier” Now Than During DotCom Boom

The Australian Financial Review reports that Munger said Friday that he believes the markets are wildly overvalued in places and that the current environment…

…[The Australian Financial Review reports that Munger said Friday that he believes the] markets are wildly overvalued in places and that the current environment is “even crazier” than the dotcom boom of the late 1990s that subsequently led to a bust. He is not wrong.

This post by Lorimer Wilson, Managing Editor of munKNEE.com, is an edited ([ ]) and abridged (…) excerpt from an article from zerohedge.com for the sake of clarity and brevity to provide you with a fast and easy read. Please note that this complete paragraph must be included in any re-posting to avoid copyright infringement.

1. Investor demand for U.S. technology stocks amid the pandemic has taken the Nasdaq 100 to a relative record against the Dow Jones Industrial Average…exceeding the peak set during the dot-com bubble.

2. On an absolute basis, US stocks have never been more expensive relative to sales.and never been more expensive relative to the nation’s GDP.

4. …Munger wishes cryptocurrencies had “never been invented,” and thinks the Chinesemade the correct decision, which was to simply ban them. In my country, English-speaking civilization has made the wrong decision, I just can’t stand participating in these insane booms, one way or another.”…

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The post Berkshire’s Charlie Munger: Market “Even Crazier” Now Than During DotCom Boom appeared first on munKNEE.com.




Author: Lorimer Wilson

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