United States Doesn’t Need the Fed,

This of course is nonsense....demonstrated by Williams head of the NY Fed, who made a very accomodative statement on Friday morning. The market went up 300 and then plunged. The Fed is one of many factors behind the collapse, but also including trade, the historically high return on sales for large companies, corporate debt, geopolitical risk, the weakness of Europe.......and let's not forget the risks and constraints to the Presidency. It's s scandalous that the people's choice, according to the vote as expressed in the constitution, is being attacked in this way...the Russia probe is a disgrace. That said Trump has made some terrible people choices and botched the phasing of his agenda....but I give him something of a pass because the resistance he is facing and the daily attacks would have broken all but a very committed person. The Fed has made a few mistakes....most notably the statement that running down of the balance sheet is on 'auto pilot'. I was listening to Powell's speech live and I winced when I heard that one....the market hated it. He certainly needs a better speech writer.

One of the reasons the Fed has a propensity to normalize interest rates and reduce it's balance sheet is so that it has some weapons when the country inevitably hits the next recession, If interest rates are zero, it's out of bullets. But it was the Fed under Bernacki that saved the economic system by buying financial assets, after the Treasury under Bush brought us to the brink of disaster....by allowing Bank balance sheets to balloon and then allowing Lehman to tank. The Lehman decision was very personal, Dick Fuld the Lehman chairman was hated on the Street and disliked by the bankers in the Bush administration. The feeble excuse that they never had the authority to bail out Lehman was discredited by the almost immediate bail out of much larger AIG. The Fed was a bulwark of professionalism during that mess. But I will agree Powell, who was Trump's choice, was very inarticulate last week. Donald should probably have kept. Yellen who was doing a good job.