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2008

Low Rates As Chaos, Not ‘Stimulus’

By |2020-03-10T17:28:21-04:00March 10th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Basic recession economics says that when you end up with too much of some commodity, too much inventory that you can’t otherwise sell, you have to cut the price in order to move it. Discounting is a feature of those times. What about a monetary panic? This might sound weird, but same thing. In other words, if you have too [...]

COT Blue: A Short-term Path For Powell

By |2018-10-22T17:31:53-04:00October 22nd, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

On December 12, 2007, the Federal Reserve announced its entry into emergency “non-standard” policy measures. In a belated attempt to “address elevated pressures in short-term funding markets”, the US central bank would begin auctioning reserve funds “against the wide variety of collateral that can be used to secure loans at the discount window.” The Term Auction Facility (TAF) would become, [...]

It’s Not Actually Inconsistent

By |2016-11-11T12:51:49-05:00November 11th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There are many facets to gold, which is as it should be. In trying to discern what ones are moving prices at any given moment, the complexities and really its duality can cloud the matter, often greatly. From the post-1971 traditional perspective, it is believed the preeminent inflation hedge. In financial terms, it is sensitive to shifts in relative interest [...]

Yellen Looks the Other Way

By |2014-07-02T14:45:23-04:00July 2nd, 2014|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Real Estate, Stocks|

More of the same from Janet Yellen in her latest speech, but her focus on “resilience” caught my attention as it relates to very recent developments. The taper threat experience last year may have been a warning, but it doesn’t seem like it resonated with her or policymakers. The major bond selloff, which led to global ripples of crisis in [...]

Basel III and The ‘Costs’ of Competition

By |2014-06-30T14:48:07-04:00June 30th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

My colleague Margie Fernandez flagged a research report from Oppenheimer on the ongoing Basel implementation. It has been calculated, through various methodologies, that the implementation of both Basel III and Dodd-Frank may be “upwards of 15% of operating profits of small banks.” Now it should be noted that these figures were derived from a meeting with Frank Keating, former governor [...]

Friday FOMC Memories – Re-fashioning Beavis

By |2014-05-23T13:46:20-04:00May 23rd, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

The occasion of this year has lent itself to what I sense is more and more the drive to set down “history” before a full review can coalesce interpretations that might not be kind. I’m talking about Ben Bernanke now “speaking his mind” and the cast of 2008 writing books to tell their side. It is highly natural of any [...]

Friday FOMC Memories: Bent Straight Lines

By |2014-04-11T16:53:38-04:00April 11th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

I suppose when your entire task derives from regression-based statistics, there is the tendency to incorporate straight lines into even your own thought patterns. Of course, that leads to self-reinforcing bias and should be canceled by some governing process. Usually that governing process takes the form of applied knowledge (as opposed to math-based knowledge) and plain common sense. In a [...]

Friday FOMC Memories: TBTF

By |2014-03-28T14:45:24-04:00March 28th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

It wasn’t all that long ago that bank stress tests were designed specifically to ensure 100% passing rates. The purpose of the exercise has nothing to do with bank safety or even oversight, it is a mode of pure psychology (bordering on propaganda). The first introduction back in 2009 was effectively that – to calm investor fears by stamping the [...]

Friday FOMC Memories: Fair Is Fair

By |2014-03-14T16:51:32-04:00March 14th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

It is somewhat of a fair criticism that playing armchair quarterback years after events unfolded amounts to lazy or devalued analysis. Picking apart assessments with the full benefit of hindsight is seemingly unfair to the participants and targets of any reproach. It also may appear to be irrelevant to spend so much time when current events demand more attention and [...]

Friday FOMC Memories: Absurdity

By |2014-03-07T12:52:04-05:00March 7th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

The day after Lehman Brothers failed, the FOMC gathered to discuss how to conduct monetary business in the wake of the turbulence that decision created. Every single participant was willing to roll the dice on standing pat for two very big reasons. First, they felt that had been aggressive enough to counteract any downside, and that being aggressive in that [...]

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