U.S Dollar - Remember when we said that we'd hate to be a U.S. Dollar right now? Well, today you'd really hate to be one, as the dollar index, DXY, took a bit of a tumble, and not without cause.
In case you hadn't heard, the U.S. economy is changing pretty rapidly. Looming asset-purchase tapering, rate hikes, a near-breached debt ceiling, an a**load of government spending, not to mention rising inflation, and of course, energy issues, all coordinating to drive down the value of the dollar vs a basket of global currency peers. It's not all doom and gloom however, as the dollar remains up on the year, but it reminds us of the precarious position we find ourselves in. To add to that laundry list, other central banks are expected to tighten monetary conditions before the U.S. gets around to it, pushing the currency lower on a relative value basis. But I'm not burning my dollar bills just yet...
JPow Gets JPounded - You know that feeling of "wrong time, wrong place", when everything comes crashing down on you out of nowhere? Well, for our boy JPow, he's getting that, times the size of the Fed's balance sheet.
Revelations were made yesterday, upon financial disclosures from the Chairman of the Federal Reserve, that Mr. Jerome Powell, formerly known as JPow, allegedly sold somewhere between $1mm and $5mm worth of the Vanguard Stock Market Index Fund ($VTSAX) on Oct. 1, 2020, just before a somewhat significant market dip. While everyone is losing their minds over this, let's get some perspective. The VTSAX has returned ~36% since then, so if this was a nefarious trade, it sure wasn't a smart one. Not a single individual stock was traded, so it's not like the guy had insider info that oil was gonna explode so he loaded up on Diamondback Energy calls. But still, this comes right as the Chair is up for re-nomination and just weeks after the Dallas and Boston Fed Presidents, who faced similar allegations, resigned.
One person that is going to pound this story into diamond is Senator Elizabeth Warren, who is already not a fan of Powell, likely in attempt to get some fresh blood in his seat. Moreover, with all these stories of Fed officials, Representatives, and Senators trading at suspiciously convenient times, something has to be done. How funny would it be if tomorrow we find out Joey B himself bought a sh*tton of Nucor or something?