{"id":40321,"date":"2018-11-09T08:34:26","date_gmt":"2018-11-09T13:34:26","guid":{"rendered":"http:\/\/olduvai.ca\/?p=40321"},"modified":"2018-11-09T08:34:26","modified_gmt":"2018-11-09T13:34:26","slug":"hilarious-how-wall-street-crybabies-whine-about-the-feds-qe-unwind-after-a-decade-of-wealth-effect","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=40321","title":{"rendered":"Hilarious How Wall-Street Crybabies Whine about the Fed\u2019s QE Unwind after a Decade of \u201cWealth Effect\u201d"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"https:\/\/wolfstreet.com\/2018\/11\/08\/hilarious-how-spoiled-wall-street-crybabies-whine-about-the-feds-qe-unwind-after-a-decade-of-wealth-effect\/\">Hilarious How Wall-Street Crybabies Whine about the Fed\u2019s QE Unwind after a Decade of \u201cWealth Effect\u201d<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>Their \u201cEverything Bubble\u201d is being pricked \u201cgradually,\u201d and they don\u2019t like it.<\/strong><\/p>\n<p>Wall Street has been moaning, groaning, and crying out loud about the Fed\u2019s current monetary policies \u2013 raising rates and unwinding QE. They fear that these policies will undo the Fed\u2019s handiwork since the onset of QE and zero-interest-rate policy in 2008, now called the \u201cEverything Bubble\u201d (stocks, bonds, \u201cleveraged loans,\u201d housing, commercial real estate, classic cars, art\u2026). In an effort to pressure the Fed to back off, they\u2019re accusing the Fed of making a \u201cpolicy mistake\u201d and creating \u201cscarcity\u201d of bank reserves.<\/p>\n<p>Here is <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2018-11-08\/-fed-is-in-denial-how-a-4-trillion-dilemma-could-get-ugly\" target=\"_blank\" rel=\"noopener\">Bloomberg News<\/a> this morning. It\u2019s really cute how this works. This is how the article starts out: \u201cFixed-income traders are telling the Federal Reserve that it might end up making a big policy mistake.\u201d<\/p>\n<p>These folks cannot say that the Fed\u2019s QE unwind and higher rates might unwind some of the wealth of asset holders that resulted from the Fed\u2019s desired \u201cwealth effect.\u201d That would be too clear. So they have to come up with hoary theories to back their \u201cpolicy mistake\u201d theme. This time it\u2019s the theory of a \u201cscarcity of bank reserves.\u201d<\/p>\n<p>When these folks talk about \u201cscarcity,\u201d what they mean is that they have to pay a little more. In this case, banks are having to pay more interest to attract deposits.<\/p>\n<p><ins class=\"adsbygoogle\" data-ad-client=\"ca-pub-8212587530282873\" data-ad-slot=\"1767955946\"><\/ins>For the crybabies on Wall Street, that\u2019s \u201cscarcity.\u201d For savers, money-market investors, and short-term Treasury investors, however, it means the era of brutal interest rate repression has ended, and that they\u2019re earning once again more than inflation on their money (savers might have to shop around).<\/p>\n<p>But that the money from depositors is suddenly not free anymore is anathema on Wall Street. So here we go \u2013 this time specifically targeting the QE unwind. Bloomberg:<\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Hilarious How Wall-Street Crybabies Whine about the Fed\u2019s QE Unwind after a Decade of \u201cWealth Effect\u201d Their \u201cEverything Bubble\u201d is being pricked \u201cgradually,\u201d and they don\u2019t like it. Wall Street has been moaning, groaning, and crying out loud about the Fed\u2019s current monetary policies \u2013 raising rates and unwinding QE. They fear that these policies [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[83,17853,303,430,534,661,662,3650,860,13234,4254,4255],"class_list":["post-40321","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bloomberg","tag-everything-bubble","tag-fed","tag-interest-rate","tag-monetary-policy","tag-qe","tag-quantitative-easing","tag-us-federal-reserve","tag-wall-street","tag-wealth-effect","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/40321","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=40321"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/40321\/revisions"}],"predecessor-version":[{"id":40322,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/40321\/revisions\/40322"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=40321"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=40321"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=40321"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}