Economics: Is The Monetary Policy Expansive Again?

 

(Drivebycuriosity) - There is a lot talk about the current monetary policy. Many claim that the Federal Reserve is too restrictive and may risk a recession. These claims are based on the interest rates, which are still on the highest level since 2006.

 

But there is one important indicator that gives a different message: The money supply M2, which is bank notes & coins & liquid deposits at banks (  ycharts  fred.stlouisfed).

 

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The sharp growth of M2 in the years 2020 & 2021, created by Government checks and financed by the Federal Reserve, caused the inflation of the recent years (I elaborated this here ). Too much money chased too few goods. 

In April 2022 the growth of the money supply ended and turned negative, thanks to the end of the government checks and the sharp interest rate hikes of the Federal Reserve. The monetary policy became restrictive, which explains that the inflation rate dropped from 9.l% to around 3%. 

But since November 2023 the money supply is growing again - in spite of the continuous high Fed rates (images above). It seems that the economy is more robust than many believe. It looks like that the resilient economy and growing investments into technology (including AI) lead to growing bank loans that lands on the banking accounts of the customers, feeding the renewed growth of M2.

 

Contemporary Art: Armig Santos`Memoria @ Half Gallery New York

(Drivebycuriosity) - Manhattan´s East Village is a
cluster of dives and fast food places, but there is at least one art gallery which has frequently interesting exhibitions: Half Gallery. They display now works by Armig Santos (Puerto Rico ). The show is called "Memoria".

 

I love these bluish expressionist images which are inspired by Santo`s tropical home and Puerto Rico´s history.

 

 

To be continued.

Books: Waterloo Sunrise - London From The Sixties To Thatcher

(Drivebycuriosity) - I love London. I visited the metropolis 5-times since the 1960s and observed a part of her evolution since then. This brought my attention to the book "Waterloo Sunrise - London from the Sixties to Thatcher" by John Davis (amazon ).

Obviously the title is a play on the famous song "Waterloos Sunset" by "The Kinks", released in 1967, even though London´s music scene (The Kinks, Rolling Stones, Led Zeppelin, Pink Floyd etc. etc) is ignored. Instead the author describes the social, economic, political & legal developments in the British Capital.

The book is very densely & dryly written and staffed with a huge amount of information. It is really impressing how many facts and anecdotes the author was able to pack into more than 500 pages - way too many I could digest. So I skimmed the text and picked just some of the gems. But there are a lot:

I learned for instance that Mary Quant declared that "the young must never on account like the old". The innovative fashion designer build a million Pound Sterling empire on that and made her Carnaby Street neighborhood famous. 

I learned how the owners of porno shops and strip clubs struggled with the law, turning Soho into "London`s erogenous zone". The lawmakers tried to restrict nudity and erotic performances in the public, the entrepreneurs, who dealt with a growing competition, sought ways to circumvent the law. Bars were declared as private clubs.  

I learned that the brand name "Swinging London" became a tourist magnet in the 1960s. I learned about the evolution of the restaurant scene and the invasion of ethnic eateries. I read how rising house prices & rents changed the environment and that London`s bureaucracies & administrations tried fruitless to deal with all the changes. 

I got introduced into the mind set of London cabbies, the Nottingham race riots of 1976 and how London adapted to Thatcher´s new economy - and much much more!

Anyway the book is a huge fountain of information and a valuable source for anyone who is really interested in the British capital and her development. 

Contemporary Art: Nastaran Shahbazi`s Wild Roses @ The Hole New York

 (Drivebycuriosity) - Manhattan´s Bowery is a tourist magnet with plenty of restaurants & bars. But there is at least one ambitious art gallery: 

The Hole ( thehole.com). 

 

Recently I spotted an amazing show with new paintings by Nastaran Shahbazi (b 1982, Iran), who lives and works in Paris. The show is called "Wild Roses".

Above this paragraph you can see "Nowhere Land" (2024, oil on canvas, 79 x 71 inches, 200 x 180 cm)

 

I love these expressionist compositions, the wonderful crafted scenes with intense colors. Above follow "Ballroom" (2023, oil on linen ); "The Meal" (2024, oil on canvas) & "Whispering Roses" (2023, oil on canvas).

                      Conquest Of The Garden

 

 

Some images could be stills from noir thrillers. Above this paragraph you can see: "A cup of Tea" & "Conquest of the Garden".

 

 

Above: "Nowhere Land"; "By the Apple Tree"; "Dejeuneur sur l`Herbe"; "Warm up your Heart", "In the Red Room" & "Sweet Oranges".

To be continued

Books: The Rabbit Factor Trilogy By Antti Tuomainen

 (Drivebycuriosity) - Imagine that you are a rational thinker & mathematician. Suddenly you become an owner of a messy adventure park for children, inherited from your late brother, who was quite your opposite. Antti Tuomainen`s trilogy is set in Finland and told in first person. The series starts with the novel "The Rabbit Factor", followed by "The Moose Paradox" and "The Beaver Theory" (amazon ).

The protagonist is a man who`s world is set upside down, who has to adapt to a totally new life. The protagonist has to deal with irrationality, menace & violence. But the novels are also about learning, adapting and growing with one`s challenges. "What doesn`t kill us, will make us stronger", said Nietsche and Darwin added "adapt or perish". The series deals also with issues like economics, management & labor relations

I loved the first 2 books of the series. The protagonist is not only struggling with stubborn and irrational employees, he also gets challenged by vicious criminals. Tuomainen can write and creates intense & beautiful descriptions of situations & environments, spiced  with a dark humor. 

Unfortunately the third book intensifies all the ridicule; villains & cops get even more violent, obnoxious and stupid. And the protagonist seems to soften his rational stance  

I recommend the first 2 books, the third one is just for those who got hooked by the first two.

Contemporary Art: Flowers Do Cry @ Lyles & King New York

  (Drivebycuriosity) -  Do you like abstracts? Gallery Lyles & King in Manhattan´s Chinatown has now a show with amazing abstract paintings by San Francisco-based artist Hyba Kallache. The exhibition is called "Flowers do cry" (lylesandking). According to the press release Kallache is born in Beirut and these paintings are created in the memory of a huge explosion that happened 2020 in her hometown.

 

 

On top of this post you can see "There's a temple in Baalbeck, dedicated to Bacchus" (2023, Ink, oil, and oil bar on canvas
114 x 65 inches, 289.6 x 165.1 cm) followed by "Audible, inaudible" (2023, Ink, oil, and oil bar on canvas).

 

Above follow "The rain will make its way through your bones" & "Acoustic territories".

 

Above: "An abnormal elsewhere" &  "Syria has always been the mother of chaos. In the epiphany of a sun to come, breathless".

 

 

As a bonus 2 images from a second show at the gallery:
Catalina Ouyang`s "Sphinx Study" (profile) & (rear) (2024, Oil and acrylic on linen). (catalina-ouyang-trick ) ( marguo.com ).

 

To be continued

Books: The Mammoth Book Of Extreme Science Fiction

 (Drivebycuriosity) - I love science fiction. Scifi authors ask "what if" and they try to give plausible answers. The best of them speculate about the future by appreciating scientific possibilities, using a lot of logic; and they mingle their tales with physics, evolution biology and other sciences (hard science fiction). Hard science fiction mixes entertainment with constructive and logical thinking.

The Mammoth Book of Extreme Science Fiction" edited by Mike Ashley is a collection of 25 short stories & novellas ( amazon). I enjoyed 6 of them:

Gregory Benford: "Anomalies". Benford belongs to my favorite science fiction authors because he writes hard science fiction in the tradition of Isaac Asimov & Arthur C. Clarke and mingles fascinating tales with sciences like physics, logic, evolution, biology, chemistry & information technology. The logical, analytical and scientific style of his novels & short stories shows that the author also has a career as astrophysicist on the faculty of the Department of Physics and Astronomy at the University of California, Irvine (wikipedia). In this story are mysterious things happening in the sky - a kind of cosmic puzzle.

Paul di Filippo: "..and the Dish ran away with the spoon". The author makes fun of the Internet of Things and AI. When almost everything is connected and has some kind of brain, what could get wrong?

Lawrence Person:  "Crucifixion Variations". A mixture of time travel and religious speculation based on alternate worlds theory.

Alastair Reynolds:  "Merlin`s Gun". Reynolds is another favorite of mine. His novels and short stories show what contemporary scifi is capable of. Reynolds has a PhD in physics and started his career as research astronomer for the European Space Research and Technology Centre (part of the European Space Agency) until 2004 when he left to pursue writing full-time ( wikipedia). But he also has a lot of fantasy and excellent writing skills. Here is a gem of space opera.

Stephen L Gillettn & Jerry Oltion: "Waterworld". Team works are rare in literature, but this piece is a powerful adventure story based on cosmology & chemistry. The reason why I like science fiction.

Jerry Oltion: "Stuffed". Oltion also can write good stories alone. This funny piece is set in a dystopian future where people have given up eating and receive their energy from sunlight. A couple has the idea to have a kind of thanksgiving dinner, based on ancient recipes and created by robots, shared with friends. How will this go?

The rest of the stories might cater different tastes.  

Stay tuned

Economics: Is The Federal Reserve Really Hawkish?

(Drivebycuriosity) - There is a lot ado about the allegedly hawkish Federal Reserve. Many claim that the Fed is too restrictive and might risk a new recession. I am aware that the Fed keeps her interest rates ( Fed rate) on a high level and does not signal to cut them any time soon. But is her politics really restrictive?

The Fed doesn`t control the economy directly. The authority exerts an indirect influence by coaxing the banks to give more or less credits, which impacts the general credit volume and the money supply. When the Fed hikes her interest rates (Fed rate) the banks are less inclined to give more credits and vice versa. When the Fed buys bonds from the banks (usually US government bonds) the banks have more Fed money on their accounts, which induces them to expand their credits (Q3). When the Fed purchases less bonds - or resells them - the banks have less money on their Fed accounts and are less inclined to give credits.

 

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When we want to find out how expansive or restrictive the Fed actually behaves, we need to take a look on the money supply, which works as an intermediate between Federal Reserve and the real economy. The image above this paragraph shows that the money supply M2 was shrinking from April 2022 through November 2023 , obviously signaling a tight Federal Reserve Bank policy. 

But the growth of M2 restarted in December 2023 and re-accelerated in the recent months (image on top of this post  ycharts).

High interest rates or not, according to M2 the Fed is not hawkish at all, rather expansive.