Monday Smackdown: The Elementary Arithmetic of a Value-Added Tax (VAT)
Procrastination for October 1, 2017

Must-Read: Everybody should be very clear: Kevin Warsh is likely to be a disaster as Fed Chair—and a disaster for every class of assets:

Pedro Nicolaci de Costa: Trump sees Fed chair nomination as a reality show: "Neil Dutta, head of US economics at the research firm RenaissanceMacro, had this to say about the possible appointment of Warsh...

...a lawyer by training and a banker by profession — in a note to clients: "A client asked me 'Can you tell me your thoughts on Kevin Warsh as the next Fed Chair? The likelihood as well as what type of chairperson they would be and how would the market react?'" His response confirms my own analysis.

Not positive. Yes, Kevin Warsh was a governor during the financial crisis. But, the way he has gone after the Fed since he has left probably has not endeared him to the people there. So, my primary concern is whether the organization would even respect him. Normally, the board’s staff assumes the chair knows the ins and outs of monetary economics at least as well as they do. Warsh would not be afforded that assumption. That is a big problem.

Warsh was consistently on the wrong side of the policy debate, Dutta adds... "calling for a sharp upturn in inflation when none arrived," Dutta wrote. "He was originally sold as a student of the financial markets in 2006 but was grumbling about aggressive monetary action while the credit markets froze up." As for his chances at clinching the post, Trump appears to be doing a good job of keeping the reality-TV-inspired suspense alive. "Trump met with Warsh," Dutta said. "Fine. Should we draw a big line to an actual appointment? I am quite skeptical." Not me. Stay tuned.