I can't help but chuckle when I see so many spun-out financial market professionals opine on the cataclysmic risks associated with threats to Fed independence. The idea that "The Creature from Jekyll Island" has somehow not been contaminated by the swamp that surrounds it, is surely one of the most foolish narratives in market folklore. […]

There have been a few days of calm since the largest weekly rise for US long-term interest rates in over 40 years. To see such a move, along with a sharp weakening in the dollar, during a period of equity and credit market stress, is extraordinarily unusual. For decades, we have all been conditioned to […]

On September 22,1985 the Plaza Accord went into effect to stem the deep trade imbalances existing between the US, Japan, and Western Europe. Once again, beginning a week ago Thursday, the US made initial moves to rebalance an unlevel global trade playing field. This time, of course, the primary target is China. The game is […]

Please join Jefferies Chief Market Strategist, David Zervos, for a discussion on how Trump’s attack on mercantilist trade policies will likely impact global financial markets and geopolitics. By bringing over 70 countries to the table to rebalance a broken global trading structure, while isolating China, Trump has set the stage for an epic battle between closed protectionist […]

I generally draft a few bullet points for my TV hits before going on air. Given all the market madness, I thought I would share them with readers this morning so as to give everyone a better idea of where my head is after the last 3 trading sessions. ______ Notes for CNBC: Making sense […]

Here is a simplistic version of the game played every day in the global trade arena. Each country chooses to either be cooperative (C) or uncooperative (U). Below are some illustrative payouts: C:C -> $100:$100 C:U -> $30:$130 U:C -> $130:$30 U:U -> $10:$10 Right now, the US is playing C, while most of it's […]

A little more than a week has passed since Jay decided to slip on a red jersey and distance himself from that politically charged 50bps rate cut just before the election. His dovish messaging was crystal clear. And the near complete shutdown of Treasury QT put dovish action behind the dovish rhetoric. Jay clearly doesn’t […]

Before proposing a 12-step recovery journey for countries struggling with fiscal policy addiction issues, I have two housekeeping issues and a quick FOMC thought to share: I want to apologize for the technical problems with last Thursday's macro zoom. It was inadvertently capped, thereby leaving many participants locked out. It does appear that the replay […]

Impending cuts in both federal spending and employment have added uncertainty to the economic outlook. While gains in government efficiency are generally seen as beneficial, if the transition takes place too quickly, there may be some unpleasant side effects from a rapid fiscal withdrawal. Administration officials have been quite candid in their analysis of these […]

The term reprivatization has entered into Trump policy lexicon courtesy of our new Treasury Secretary. To be sure, it is an excellent choice of vocabulary when describing the process of moving resources out of a less efficient, kakistocratic public sector into a more productive, meritocratic private sector. Reprivatizing conjures up images of large swaths of […]