Sunday Gold Fix – Monday GOFO Plunges With Gold
I delayed posting in its regular Sunday spot to see if there were any additional pressures in gold prices over the weekend. Sure enough, gold sold off again seemingly in tandem with Japanese financial events. Both gold and silver were sold hard right at the open, bringing in a morning London fix well below the .. read more
Legal Duplicity
Christopher Rad of Cedar Park, Texas, was just sentenced to 71 months in prison for executing a technologically advanced update of a very old stock scam. Mr. Rad enlisted the aid of hackers and spammers to spread rumors and interest equity investors in various stocks, including RSUV, QRVS, VSHE, SVXA, and ASIC. The scheme involved .. read more
Durable Monopoly
Any truly capitalist economic system is instilled with an embedded remedy for the natural progression of business and production toward monopoly. The very success that society needs and benefits from capitalist progression, owing to innovation, naturally thins the herd of producers. The most successful producers continually suppress their own production costs through “small-scale” innovation and .. read more
Exploring the Limits of Monetary Intervention
The mini-cycle in inventory has re-appeared in the latest two regional manufacturing surveys. Both the Empire Fed and Philly Fed indices have again fallen below zero, indicating a contraction in activity. However, it is the frequency of negative readings that is most relevant. Since the middle of 2012, both surveys (along with their three other .. read more
There’s That Word Again
The Federal Reserve on a few separate occasions, as I noted late last week, has begun to peremptorily quash the growing use of the loaded word “bubble”. From academic papers to Fed speeches, US monetary policymakers want to make sure that investors and the public know they are watching for them though they have yet .. read more
Sunday Gold Fix – Inventory Paradox
The physical markets for precious metals do operate under the philosophical framework of basic economics. The price of gold, for example, will move based on underlying demand and supply dynamics though it appears to have taken a break from that relationship recently. Unlike industrial commodities, however, gold still occupies monetary spheres, particularly interbank liquidity. That .. read more
Happy Mother’s Day Mr. Bernanke
In light of the current low interest rate environment, we are watching particularly closely for instances of “reaching for yield” and other forms of excessive risk-taking, which may affect asset prices and their relationships with fundamentals. It is worth emphasizing that looking for historically unusual patterns or relationships in asset prices can be useful even .. read more
Bubble Friday? FRBNY Economists See No Bubble
Apparently, we have clear sailing for another five years for stock prices: “We surveyed banks, we combed the academic literature, we asked economists at central banks. It turns out that most of their models predict that we will enjoy historically high excess returns for the S&P 500 for the next five years.” Sure, there are .. read more
