201412.17
0
0

Woe the ‘Dollar’

It seems Charles Dickens had a flair for 21st century economics all the way back in the 19th century. Writing in his book Little Dorrit (thanks to W Krauss for the reminder) he observed that credit systems tended to be, “…a person who can’t pay, gets another person who can’t pay, to guarantee that he…

201412.14
3
0

A Considerable Period

con·sid·er·able 1. Worth consideration; significant 2. Large in extent or degree Merriam-Webster It was six years ago this month that the Federal Reserve cut the Fed Funds rate to its current target range of 0 – 0.25%, essentially cutting the interbank lending rate to zero. The upper end of that range hasn’t been a problem,…

201412.12
4
0

Global Credit Markets Have Proclaimed An End To The Recovery

The amount of credit market fireworks this week is only surpassed by those of October 15. Everywhere you look, credit markets are not just growing bearish but, as I said earlier in the week, bearish in comparison with past crisis periods. The past few days have surpassed even that observation, making credit now a fast-moving…

201412.10
4
0

Monetarism Destroys Money

Most people have at least a passing familiarity with the basic concepts of finance. These are intuitive aspects that count almost like Platonic qualities of “truth”, existing as almost transcendent reality upon which human construction is based. In this particular case I am talking about money and time value. The reason a yield curve takes…

201412.07
3
0

Rising Dollar: Good News, Bad News

So here we are nearly 6 years removed from the last global financial crisis – surely not the last – and while a lot has been done by global economic policymakers, it seems that not much has really been accomplished. Globally, debt has risen since the crisis despite the cries from some quarters of “austerity”;…

201411.23
Off
0

The Return of Conundrum

co·nun·drum – noun: A confusing or difficult problem; a question or problem having only a conjectural answer Merriam-Webster Back in the last Fed tightening cycle, Alan Greenspan described the refusal of long term rates to follow short rates higher a conundrum, something he couldn’t really explain. Unlike past periods of tightening, long term rates refused…

201411.16
7
0

Bubble Behavior?

I really hate the term bubble. With regard to markets, frankly it has no meaning. One man’s bubble is another man’s rational bull market. There is no agreed upon valuation metric which, once exceeded, pegs a market or a sector or a stock as a bubble. My view on the matter is that “bubbles’ are…

201411.09
1
0

Political Economy

I hate to do it, but I’m going to have to write about politics this week. Believe me, it isn’t something I relish, but in light of the recent election, it would be dereliction of duty to ignore the elephant and donkey in the room. Let’s get this out of the way right up front;…

201411.02
4
0

Bank Of Japan Fills The Gap

The Federal Reserve ended QE3 last week as was widely expected and markets seemed to take it calmly enough. Stocks and bonds fluctuated, as they tend to do, but the end result was a non-event. It seemed that investors were willing to give the economy and the markets the benefit of the doubt as we…

201410.28
Off
0

A Word of Advice, Woman-to-Woman

“A woman is like a tea bag – you can’t tell how strong she is until you put her in hot water.” Eleanor Roosevelt Back in 1983, portfolio management was largely a male dominated industry. The majority of decision-making clients in the bank Trust Investment division where I began my career as a portfolio manager,…