Employment figures are highly significant as to whether the Federal Reserve’s face is raising interest rates this year. So far, the Fed has twice raised interest rates in 2017, and there is no doubt that employment data over the past month – and in the coming months – will have weight in the central bank’s decision.Looking broadly, from the beginning of 2017, the US economy added an average of 162,000 jobs per month, down from 187,000 jobs, 226,000 and 250,000 on average per month in 2014-2016.Is it bad news? According to many economists, not necessarily. Since 2010, the world’s largest economy has added 16.4 million new jobs, and the slowdown in job creation seems natural, while the 16-year unemployment rate and fewer and fewer Americans remain unemployed.Bottom line, analysts estimate the U

remained virtually unchanged, against the backdrop of falling inflation expectations and the culture of signs of slowing economic growth. The last week of June was a jump in interest rate expectations, but after falling for most of the month, they are now lower than their level in early June.So what caused the rise in the shares of banks and financial services companies, and will these factors support the continued trend in the coming period?The financial sector showed the strongest performance immediately after Donald Trump’s victory in the November 2016 presidential election, but after a 17% jump in the two months after the election – in the first quarter, it was one of the weakest sectors.The reasons were mainly the decline in the rate of interest-rate markets, and Trump’s difficulties in passing health care reform, which raised concerns about his ability to pass comprehensive financial reform, as he promised in the election campaign.Financial performance weakness continued throughout most of the second quarter, but changed completely in early June due to four key factors. The first signal for a change of direction came in the first part of June, after the U.S. Treasury Department unveiled a comprehensive plan to change financial sector regulation. Bank shares came back to lifeContrary to previous months’ concerns over Trump’s ability to win congressional approval for this reform, this time the idea is to implement 80% of the plan through regulatory changes (which do not require congressional approval), and only 20% through legislation. The implication is that the path to implementing the reform suddenly seemed much easier and brought the large banks’ shares back to life.Among other things, the program is easing the restrictions on commercial activity of the banks, easing the resilience tests they are required to pass, changing the way they apply international capital rules and more

.The second factor supporting financial stocks over the past month was the results of the stress tests conducted by the US Central Bank. These tests are designed to examine the resilience of the economic system to a severe Crisis – as a result of the 2008 financial crisis events (for example, a 6.5% fall in GDP, a jump in unemployment to about 10% in a year and a half, a 50% decline in equities within a year, a fall Of 25% in house prices within two years).Last June, all 34 major US banks passed the test – for the first time since they began, in 2011. Furthermore, the Federal Reserve estimates that in an extreme scenario, banks will have big losses, but their aggregate capital adequacy ratio will be 9.2% – more Multiply by the Fed’s minimum requirement (4.5%).Simply put, the Fed has actually acknowledged that banks have huge capital surpluses that can be repaid to shareholders. Indeed, in the last week of the month, JP Morgan Chase announced it would increase its quarterly dividend by 12%, increasing its buybacks ($BB) to $ 19.5 billion – 90% more than the previous year; City announced a plan to double the dividend and purchase up to $ 15.6 billion in its shares; Bank of America raised its dividend by 60%, repurchasing its $ 12 billion stake. And they were only the first.Yellen encouraged investors even moreDeclarations of dividends and banks’ success in tests are, of course, the result of streamlining moves, huge capital raising and bond issuances in recent years, which, together with increased regulation, have made them more stable institutions. In the financial stocks last week, after the release of stress tests estimated that another significant financial crisis is not expected “in our lifetime.”Against this backdrop, it’s no wonder that this past week, ETFs raised nearly $ 1 billion in global finance, completing around $ 5 billion from the beginning of the year – the largest single-sector funding, after technology. In the past year, the ETF raised about $ 17 billion in the financial sector, becoming the leading fundraising sector.Looking ahead, the factors that continue to support the bank’s shares are the expected financial statements

and pricing. Just before the opening of the second quarter of the financial statements, finances are emerging as one of the sectors with the highest earnings growth expected, with an increase of 7.5 percent, according to Bloomberg. Only the technology sector is expected to grow more. Finance companies’ revenue is expected to grow by 3.5% in the quarter.When investors look at all of these parameters, they find that even after all this, the financial sector is still one of the weakest since the beginning of the year on Wall Street – which has also led to the sector’s multiples being the lowest in S&P 500. The current multiplier of the financials is 15.9, compared to the average of 21.5 for the index itself. The future multiplier for the next 12 months is also one of the lowest – 13.9, compared with 17.5 for 500 S&P.If investors

needed additional signaling to support the financials, they received the seal of approval on the last day of June from Warren Buffett. The legendary investor, who in 2011 bought $ 5 billion of preferred shares in Bank of America, announced that following the dividend increase, he would exercise those preferred shares in common stock  The next crisis will not happen “(Translation: Worry to start worrying)Guest Opinion: The comments of the Federal Reserve Chairman in London this week confirm the true nature of the heads of the financial system: false clergy, who mimic mantras and dogmas as a substitute for fact-selling policies and deal with the reality as it was in London a few days ago, in response to a question about the degree of stability Financials, Janet Yellen, chairman of the Federal Reserve (US Reserve Bank), replied that the regulatory system built after the 2008 crisis has made financial institutions much more “secure and robust.”Then Mrs. Yellen added the following sentences: “Will I say there will never be another financial crisis? No, it will probably go too far. But I do think we are much safer, and I hope he (the next crisis, PL) will not In our lifetime and I don’t believe it will.Yellen’s words elicited many angry reactions. Many compared the safe – not to say arrogant – tone of her words with speeches of a similar note

that Yellen’s predecessors carried, in the years leading up to the crisis. Others pointed out that the problem was not arrogance itself, but rather that it was based on worldviews and economic theories that the previous crisis had debunked and proved to be deficient – and therefore dangerous as the basis for today’s monetary policy management.From there a short way to denounce the general blindness of economists in governmental and multinational institutions – a blindness that also comes from being the same captive economists in the same misconceptions. For example, the OECD announced in August 2007 when financial markets were shaking and the real estate crisis was already underway (but severely denied by policymakers) that “the current economic situation is, in many ways, better than we have experienced in years,” And so the expectation is “for sustained growth in the OECD economies, which is based on a strong trend of job creation and reduction in unemployment.”It may seem cheap and not serious to attack the mistakes made in the past by forecasters, surgeons and policymakers, because all of this is post-op wisdom. But far more important than what they said and wrote are two fundamental questions: why did they think then, and were lessons learned from what happened next? As mentioned, the fundamental reason for the colossal failure of the economy profession to predict the Great Crisis of 2007-09 was because almost all the leading economists were engrossed in erroneous conceptions and baseless theories. In one sentence: the governing concept did not correctly – if at all – relate to the financial system and the importance of debt as a weight factor in financial activity and its impact on real activity.These misconceptions and blindness led to then-legendary Fed chairman Alan Greenspan to argue that “there is no real estate bubble” and underestimated the need to properly monitor the banking system. The sequel, as they say, is history.But today, a decade after the outbreak of the crisis and nearly nine years since a “quantitative easing” policy – which meant a massive expansion of central bank balance sheets by printing money – the financial-financial establishment still refuses to abandon those misconceptions. The profession, for the most part, refuses to acknowledge that the previous crisis was caused by excess debt – otherwise, how can one explain the fact that the central remedy offered to improve the situation is the addition of more and more debt?That is, the heart of the problem in setting monetary and economic policy today is that the determinants are fixed in two ways and not

open to discussion. They continue to adhere to the view that the weak recovery of the developed world from the crisis reflects insufficient demand, so they must artificially create additional demand – artificial as well.A prime example of this is the purchase of huge vehicles, thanks to providing cheap financing for almost every fly and leper. The inevitable result of distributing subprime credit to car buyers is a growing rate of insolvency on the part of borrowers, the collapse of prices in the second-hand car market and the creation of large inventories for manufacturers and marketers (all of which in the US – of course, such a scenario is unthinkable. ..).Simply put, the heads of the financial system – not the governors of central banks – have become false clerics who curb mantras and dogmas as a substitute for reality-selling policies and deal with reality as it is, not relying on models that have been proven wrong.The inability of the policies taken by central banks to bring about a real recovery of developed economies has led the world to get bogged down in the vicious mantras and disperse promises that cannot be realized. The credibility of the cult and their religion is becoming increasingly important, and this is an important – if not the most important – factor in the growth of populism and extremism in many countries in the developed world.And from a practical point of view? For anyone familiar with the miserable record of self-proclaimed leaders by self-confident leaders, Yellen’s silly statement – without going deep into the debate about her actions and failures – is enough to trigger all the alarm bells and get ready for the next crisis.  Especially for Israeli ears, when a religious priest and revered leader states that something that is intellectually and logically unavoidable can never happen – “there would be no” – the conclusions are taken for granted.

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