Trump's Nominees Will Reshape the Fed

The Federal Reserve Board of Governors consists of 7 positions filled by appointment. President Trump already has two vacant seats that need to be filled. Over the next 18 months he may need to fill another 2 or 3 seats. His ability to recast the Fed may have more immediate impact on the country than his Supreme Court picks.

Trump needs to pick someone with real world, problem solving experience:
 

Instead of the jokers that we have been running the show:
 

It is preferable to find someone who will bring balance to their thought process and deliberations:
 
Ok, back to work (that was fun)!
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Can the Fed Raise Rates With Construction Spending Tanking?

Yes, on the heels of Yellen's Speech at Jackson Hole and Fisher's jawboning a rate increase. They shouldn't (especially so close to the presidential election).



Last month we highlighted the decline in capital investment from American corporations and the consequences for the manufacturing economy. With this morning's terrible manufacturing activity report, we have confirmation that the manufacturing recession is picking up steam (to the downside). At this early stage, investors still have time to adjust their portfolio exposure and reduce risk. We recommend a healthy dose of cash.
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The Stock Market's Problem in One Chart.

After Janet Yellen was confirmed Federal Reserve Chair Person in February 2014, she quickly halted the Feds "Quantitative Easing" asset purchase programs. The effect of QE on stocks is visibly discernible in this FRED chart.


Options for stock investors - Pick one:

1. The Fed restarts QE (not likely)
2. Congress passes a "helicopter drop" stimulus bill (less likely)
3. Stocks remain stagnant until economic activity materializes (probable)

Yellen has been a dogmatic proponent of Income equality. She is very unlikely to restart QE. There is no chance congress does anything in an election year and earnings weakness has stock range-bound. You have to believe that the US economy is strong enough to accelerate in the midst of economic weakness across the rest of the planet to be positioned for bullish "risk on" trades right now.
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