Deep Economic Thoughts Ivan Illan

This episode contains unscripted comments on the perceived burgeoning "banking crisis" and Fed Chair Powell's Congressional testimony that occurred earlier this week.
© 2023, Ivan M. Illán

The U.S. Bureau of Labor Statistics (BLS) reported a seemingly phenomenal new jobs figure for January 2023. For the past several months, there have been many hundreds of thousand of new jobs created each month.
But looking back over the past year to the types of jobs (part-time versus full-time) being created in the U.S. economy reveals an uneasy familiarity to prior economic cycles leading up to recessionary periods.
© 2023, Ivan M. Illán
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The U.S. Federal Reserve Bank is technically insolvent (or bankrupt in layman's terms). Of course, as "buyer of last resort", the U.S. Treasury would not allow the Fed to cease operations legally. Instead, the Fed maintains operations in the red (booking losses in the form of a "deferred asset") until such time it makes money again when it can once again make remittances to the U.S. Treasury. I talk about the broader complications this presents in the current environment, and to be mindful of the "headwinds" this may create in the capital markets.

Get ready for more stock market volatility, as the Federal Reserve and other central banks around the world implement tightening monetary policy.