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2008

Bernanke Says Policymakers Too Smart For Markets

By |2014-03-05T11:17:00-05:00March 5th, 2014|Economy, Federal Reserve/Monetary Policy, 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 gauges and math telling them [...]

Peering Beyond Conventions of Inventory and Inflation

By |2014-03-04T17:52:33-05:00March 4th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

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 similar downward revision in Q4 [...]

Friday FOMC Memories: Wachovia and Bagehot

By |2014-02-28T16:45:08-05:00February 28th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

Despite the obvious disinterest from pretty much everyone in the media, I still find tremendous relevance and value in the 2008 FOMC. The entire year was spent in a comedy of errors that should make even the most ardent monetarist shameful. This is not to say that I would have preferred more diligent and swift action on the part of [...]

Where Did This Go?

By |2014-02-21T16:00:51-05:00February 21st, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

THOMAS HOENIG, “Mr. Chairman, I have thought about this considerably because I think we have come to a time in our history when we have institutions that clearly ought to be and may in fact be too big to fail. I think we tend to react ad hoc during the crisis, and we have no choice at this point. But [...]

Meeting of the Minds

By |2014-02-21T15:36:14-05:00February 21st, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

As late as September 2008, the FOMC’s primary concern remained inflation. There were caveats and characterizations abounding through the conversation, but each time they kept coming back to uncomfortably high inflation and the extrapolations of that through their models. The old Philips Curve dies hard, and even with the financial turmoil already rotting through the entire edifice, policy discussion was [...]

Your FOMC, Ladies and Gentlemen

By |2014-02-21T13:26:40-05:00February 21st, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

Ask and ye shall receive. Only a few days after noting how curious it was that the 2008 FOMC meeting transcripts had not yet been posted, today they arrived. Unfortunately for me, it means I will be stuck reading through (yet again) the arrogant slop of all-too-comfortable monetary mystics. At the September 16, 2008, FOMC meeting, the day after Lehman’s [...]

Curiously Waiting

By |2014-02-19T12:34:26-05:00February 19th, 2014|Federal Reserve/Monetary Policy, Markets|

It is a definitive facet of the modern central bank that mystique is often more precious than actual skill or competence, including specific knowledge of the economy or markets (or both together). Such an aura is predicated solely on the plausibility that the central bank actually possess such. Removing that veil, as has been done in some measure since 2007, [...]

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