Interbank Market News Scan: What traders need to know about politics …

What Traders Need to Know About Politics: Capital Hates Labor

Regurgitating textbook definitions of economic growth i.e., growth in employment or gross domestic product, etc., only throws you off the mark leaving you frustrated as you ask yourself, “Why are more people being left behind while others see growth in their stock portfolios?”

Economics has never been about growth in employment. Economics is about managing capital with the appropriate amount of labor and technology such that asset values grow. It means pushing the envelope on returns to capital by raising prices so that when discounted by some rate, the present value of the asset can increase thus increasing the value of an individual’s portfolio so that they can leverage the portfolio as collateral for borrowing money at low rates and buying bonds and stocks generating a yield greater than the interest they borrowed at.

In short, today’s economics is about optimizing the carry trade.

This approach to economics was exposed in 2007 and 2008. If this growth in income and asset value (the only inflation that matters) can be achieved without hiring another soul, the wealthy would be happy.

The politician’s job is to distract the low and middle-income populace with narratives of “attacks on democracy” “diversity and inclusion” and “climate change.” Throw in “gun violence” policy and attacks on the big banks ala Elizabeth Warren and Bernie Sanders and the masses really keep their eyes off the ball.

The politicians that are shedding crocodile tears over today’s inflation figures are either ignorant as to true economics or are putting on a show scripted by their supporting political action committees in order to throw the electorate off of the scent. Needless to say, I think it is the latter.

So, when your favorite politicians are telling you that they are looking out for your economic well-being by offering you $300 tax credits and promising you that they will beat up on the banks that are raising your interest rates on the adjustable-rate mortgage you foolhardily took out or dragging supermarkets into a hearing for raising the price on your T-bone steaks, ignore them. Their job is to ensure the distraction by cheerleading the greatness of their fiscal policies that eventually result in higher taxes or their social programs purposefully designed to be effective no more than eighteen months, assuming they are effective at all….

Meanwhile, replace fluffy concepts such as “economy” and “fiscal policy.” Accept that “socialism” and “capitalism” are policy terms designed more to divide, conquer, and garner votes versus helping put food on your table. Learn to accept that “capital” despises “labor” and her goal is to exterminate you or relegate you to an Andrew Yang universal basic income scheme. Stop repeating what you’ve read in a textbook. All lies. Either you have something of high value to trade for low value currency or you don’t. That is as “economy” as you need to get.

Exchange rates of interest as of 9:52 am AST

Currency pairExchange rate
AUD/USD*0.7422
EUR/USD*1.1793
GBP/USD*1.3804
USD/CAD*1.2593
USD/CHF*0.9182
USD/JPY*110.1900
USD/XCD+2.7000
USD/NGN+409.8540
USD/MXN*19.8603
Sources: *Reuters +OANDA

Rates reported by the Federal Reserve (Release Date 15 July 2021)

Effective Fed Funds Rate: 0.10%

Discount Window:  0.25%

Prime Bank Rate: 3.25%

3-month Treasury bill: 0.06%

6-month Treasury bill: 0.05%

1-year Treasury bill: 0.08%

National Futures Association announcements of interest …

For Immediate Release
April 28, 2021

For more information contact:

Christie Hillsman, 312-781-1490, chillsman@nfa.futures.org
Karen Wuertz, 312-781-1335, kwuertz@nfa.futures.org

NFA orders former associated person Jeremy Ruth never to reapply for NFA membership

April 28, Chicago—NFA has ordered Jeremy Ruth, a former associated person of Postrock Brokerage LLC (Postrock), never to reapply for NFA membership status in any capacity or act as a principal of an NFA Member. Postrock is a former NFA Member introducing broker located in Chicago, Illinois.

The Decision, issued by an NFA Hearing Panel, is based on a Complaint issued by NFA’s Business Conduct Committee and a settlement offer submitted by Ruth, in which he neither admitted nor denied the allegations. The Complaint alleges that he failed to disclose the impact of commissions on customers’ profit potential and placed trades for customers which offered no economic benefit to them and only generated additional commissions. The Complaint also alleges that Ruth made misleading statements to customers and failed to disclose that all of Ruth’s other customers had lost money. Finally, the Complaint alleges that Ruth made unauthorized trades for customers or exercised discretion over customer accounts without obtaining written authority.

For more information, read the Complaint and Decision.

Source: National Futures Association