Pumpkin Policy and Dollarominos
the economic pumpkin patch
pumpkin spice policy
The TL;DR of this newsletter is that the Fed is the main gardener of markets and the economy, and they are going to carve faces into the pumpkins at any cost to scare away the ghost of inflation. Here are my notes from the week.
Pumpkin Policy
The Federal Reserve’s Waller said this beautiful statement when addressing illiquidity in Treasury markets:
A lot of people complain about Treasury market strains and liquidity… a lot of people complain about “Treasurys aren’t liquid.” What does that mean? It means people aren’t willing to pay the price that you’re selling at. Okay well, lower the price.
On Oct 31, the liquidity for pumpkins is very high. But on Nov 1, the market liquidity for pumpkins goes to zero. I'm not going to step in and try to fix the pumpkin market"
There is no liquidity problem if you lower the price!
Well actually: But if the Treasury market gets smashed into the street by a bunch of teenagers, Waller and the Federal Reserve are likely going to have to…
