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    AGF.B   CA0010921058


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06:11aAGF MANAGEMENT : Biden Press Conference Will Be Remembered for Only One Thing
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AGF Management : The Federal Reserve's Growing Credibility Crisis; The Debt Ceiling Solution

10/05/2021 | 08:13am EST

Insights and Market Perspectives

Author: 8

October 5, 2021

The Federal Reserve's Growing Credibility Crisis;
What's the Debt Ceiling Solution?
October 5, 2021
THE FEDERAL RESERVE, long known as apolitical, faces a serious credibility crisis as inflation surges and Chairman Jerome Powell's critics become more vocal. They're asking, bluntly, whether it's time to clean house at the Fed.

AFTER TWO REGIONAL BANK PRESIDENTS were forced out last month for active trading, there was hope among Fed supporters (like us) that the public relations damage could be contained. That was shattered in recent days when it was disclosed that Vice Chairman Richard Clarida traded between $1 million and $5 million in early 2000, shifting bond investments to a stock fund.

THE FOLLOWING DAY, Chairman Powell announced that the Fed would take action to support the economy if the pandemic threatened economic growth.

THIS HAS EMBOLDENED SEN. ELIZABETH WARREN, who wants Powell out. The embattled Fed chairman, who insisted this summer that inflation was transitory, has policy critics - but his bigger headache is the lax internal supervision over active traders within the bank. An internal Fed watchdog has begun an investigation of the trading.

POWELL'S CHANCES OF ANOTHER TERM aren't much better than 50-50, a stunning slide after he was considered a shoo-in earlier this year.

NAMES OF POTENTIAL SUCCESSORS have always included dovish Gov. Lael Brainard, but there are other candidates, including Atlanta Fed President Raphael Bostic, who could become the first African-American and openly gay Fed Chairman. Both Brainard and Bostic would be more aggressive bank regulators than Powell.

PRESIDENT BIDEN NEEDS ALL THE SUPPORT HE CAN GET, as his agenda sputters. So he needs to keep the fiery progressive Warren happy. Warren urged a SEC probe yesterday, and stated that "it is not clear why Chair Powell did not stop these activities, which corrode the trust and effectiveness of the Fed."
* * * * *
DEBT CEILING - THE MOST LIKELY PATH: Chuck Schumer probably will lose another debt ceiling vote in the Senate tomorrow; he's still trying to pin blame for the crisis on Mitch McConnell. But that tactic hasn't worked, so the Democrats may be forced to use the complicated budget reconciliation process to approve a debt ceiling increase.

THERE ARE LONGSHOTS, such as minting a $1 trillion coin (or several coins) that would pay off debts, but these don't pass the smell test. A reconciliation path, which McConnell wants, is the most logical move - but it's a time-consuming process, likely to take weeks. Unfortunately, there aren't weeks left before a default crisis could arrive.

IS OCTOBER 18 THE REAL DROP-DEAD DATE? It could come a little later, in early November - but if Congress dithers, a sense of crisis later this month may push the reeling Fed into taking very controversial emergency measures to keep bonds from defaulting.

* * * * *
AN OUTRAGEOUS IRS POWER GRAB: We don't always agree with the Wall Street Journal's editorials, but your blood pressure will rise after reading today's screed, titled "The IRS Wants to Look at Your Bank Account."

IRS OFFICIALS and many Democrats, eager to stop tax avoidance, apparently want to review every account above a $600 balance, or with more than $600 of transactions in a year. That would affect virtually everyone - and could become an explosive election issue next year.

The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF's suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

For further information, please visit AGF.com.

©2021 AGF Management Limited. All rights reserved.


AGF Management Limited published this content on 05 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 October 2021 12:08:16 UTC.

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Sales 2021 457 M 367 M 367 M
Net income 2021 38,1 M 30,6 M 30,6 M
Net Debt 2021 - - -
P/E ratio 2021 15,1x
Yield 2021 4,25%
Capitalization 554 M 443 M 444 M
Capi. / Sales 2021 1,21x
Capi. / Sales 2022 1,14x
Nbr of Employees 618
Free-Float -
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Mean consensus HOLD
Number of Analysts 8
Last Close Price 7,94 CAD
Average target price 9,09 CAD
Spread / Average Target 14,5%
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Managers and Directors
Kevin Andrew McCreadie Director, Chief Executive & Investment Officer
Judith Gail Goldring President, Director & Head-Global Distribution
Adrian Basaraba Chief Financial Officer & Senior Vice President
Blake Charles Goldring Executive Chairman
Chris Jackson Chief Operating Officer
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