E Market Briefing For Monday, Jan. 7

"You don't go from Wild Turkey to Cold Turkey" very quickly. That's an old quote of Herb Kelleher, founder of Southwest Airlines (LUV), who passed away this week. Former Dallas Fed head Dick Fisher mentioned that quote today.

He was reflecting on Fed monetary policy and former Dallas Fed President Kelleher (the LUV Chairman was also at that post during the 'Epic Debacle' we had projected in 2007-'08); and was also a fan of Wild Turkey Kentucky Bourbon.

Of course Dick Fisher was sharing the metaphor as relates to weaning off a form of addiction, as he lamented Mr. Kelleher's explanation years ago as to why Chairman Bernanke's Fed (on which Fisher served) 'failed' to lighten-up on super-easy 'emergency' monetary stimulus after the 'Crisis' ebbed.  

To me this comment, and earlier today Jim Grant (who 'is' a bond guy) about the 'commercialization' of ultra-low-cost money, confirm my assertion that no problem exists with regard to how Jerome Powell chairs the Fed, but rather the issue was how Bernanke overstayed the 'emergency low rates' and QE.

Earlier Friday (and yesterday) I suspected Powell would 'talk nice' but not at all change actual policy thinking at Friday's panel discussion. So I found the opinion Dick Fisher shared (since he was on the FOMC, not me or Grant) to be very important. That was that other than one or two palliative words, he saw 'no change or movement at all' in Fed monetary policy.  

So we have Dick Fisher and Jim Grant (these guys are in the bond arena so again it meant something to me, as I was drawing common sense outlooks as regard rolling-off the tremendous amount of Fed Balance Sheet paper of course now, and presumably expanding this year if they can't roll it off. Now you have these gentlemen saying I've got this right about the heart of issues surrounding rates. That being that it's a 'Supply' issue primarily and not very much related to anything inflationary or to domestic economic strength.

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