Perceptions Of Chairman Powell’s Volatile Credible Commitment Limits Are “Third Mandate” Reality

“I don’t know how long it’ll take, and, I don’t know exactly when that will be.” (Jerome H. Powell)

(Source: FT, caption by the Author based on a meme by Nathan Mayer Rothschild)

Summary:

·       Based on the trend, in observed perceptions, Chairman Greenspan is the worst bi-decennial Fed Chair, in recent economic history.

·       Based on volatility, in observed perceptions, Chairman Powell is the worst bi-decennial Fed Chair, in recent economic history, even though he has raised the credible commitment upper confidence limit.

·       Powell’s handling of COVID, and the immediate aftermath, have led to his volatile perceived credibility problem.

·       Current Fed “Third Mandate” drift, towards a financial stability policymaking mandate, has the opportunity to improve perceptions, of Powell, by spreading authority, and accountability, across a perceived more objective, and thereby effective, institutional process.

·       Current Fed “Third Mandate” drift, towards a financial stability policymaking mandate, faces the significant risk of being perceived as capture by Wall Street.

·       “Jai Ho!” Morgan “ignites” the “Global Blair Inc. Witch Project” bonfire of the vanities.

·       “Jai Ho’s” inclusion of Indian bonds is intended to exclude India from the BRICs.

Extracts

(Source: Gallup, caption and editing by the Author)

·       The exodus, of dissenting talent, from the “Prison of Transient Groupthink”, at the New York Fed, is a strategic institutional governance success for the Federal Reserve.

·       The talent exodus, from the New York Fed, creates “balance” in the monetary policymaking framework process at the Fed.

·       A “balanced” monetary policymaking framework is consistent with the, observed, “mandate drift” towards a financial stability policymaking “Third Mandate”.

·       “Balanced Third Mandate Drift” lowers the probability of a hard landing and, commensurately, raises the probability of a soft landing.

·       Fed escape, from “Transient Groupthink”, via “Third Mandate Drift”, has an elevated probability of ending in capture by the “Smartest Guys in the Room” rather than Jamie Dimon/JP Morgan.

(Source: the Author)

·       Jamie Dimon “narrates”, his firm’s positioning for, a Lehman/Bear Stearns moment at, his competitors, in private credit, outside the Federal Reserve Banking system.

·       The “Smartest Guys In the Room” have, apparently, got five years, of fees, and a new Presidential Election Cycle first term, to put the next $300 Billion “Big Short” on.

(Source: the Author)

(Source: the Author)

(Source and editing by the Author)

·       The rekindling of the symbiotic Special Relationship is pending the tall New World Order of the permanent sacking/resignation of the Butler, the conviction of the Oxford Apostles, the UK re-joining the EU, the closure of the VIP Lane, and India leaving the BRICs.

·       The rekindling of the symbiotic Special Relationship is also pending the syncretic bicameral Anglo-Saxon political cleansing simultaneously occurring on either side of the Atlantic.

(Source: the Author)

(Source: Bloomberg, caption by the Author)

(Source: Bloomberg, caption by Eddie Van Halen RIP, editing by the Author)