201611.11
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It’s Not Actually Inconsistent

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…

201407.02
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Yellen Looks the Other Way

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…

201406.30
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Basel III and The ‘Costs’ of Competition

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…

201404.11 1

Friday FOMC Memories: Bent Straight Lines

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…

201403.28
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Friday FOMC Memories: TBTF

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…

201403.14
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Friday FOMC Memories: Fair Is Fair

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…

201403.07
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Friday FOMC Memories: Absurdity

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…

201403.05
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Bernanke Says Policymakers Too Smart For Markets

It may come as a surprise to some, but that is exactly the sentiment that central banks have been expressing for years; decades even. The economists at the Federal Reserve, ECB, BoE, BoJ and elsewhere see themselves as scientists, the equivalent of nuclear engineers sitting inside the control room of a nuclear reactor. They have…

201403.04
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Peering Beyond Conventions of Inventory and Inflation

The preliminary revisions to Q4 2013 GDP subtracted a significant portion off what was previously believed much more robust, thus making Q3 more and more of an outlier. We knew that 2013 (and even late 2012) had a very heavy inventory component, far more than is “typical”, and that observation survived these adjustments despite a…