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Global, Not Term Premiums: What Low Yields Really Say

By |2021-05-04T17:18:32-04:00May 4th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The standard explanation for low bond yields has been driven by – who else? – Ben Bernanke summing up the view from econometrics. Term premiums, he says, these made-up decomposition components which only allow for QE to save a tiny bit of its face. In other words, QE obviously didn’t lead to recovery, it sure didn’t create modest let alone [...]

Rate of Change

By |2019-01-10T16:43:28-05:00January 10th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

We’ve got to change our ornithological nomenclature. Hawks become doves because they are chickens underneath. Doves became hawks for reasons they don’t really understand. A fingers-crossed policy isn’t a robust one, so there really was no reason to expect the economy to be that way. In January 2019, especially the past few days, there are so many examples of flighty [...]

Not Snow or Seasons, Just Slow

By |2016-04-12T17:25:35-04:00April 12th, 2016|Economy, Federal Reserve/Monetary Policy, Markets|

Last year, economists were fed up with winter. They had had enough of Q1’s always lagging, threatening to upend the idea that there is a solid and improving recovery. To drop a negative GDP quarter into that mix was the final straw, since negative quarters are exceedingly rare – they actually don’t occur outside of recession. In the four decades [...]

Blame GDP

By |2015-04-17T15:50:03-04:00April 17th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

I think we are getting an even better sense of what might be the most ironclad law of orthodox economics. It seems as if there is a nonlinear proportionality between the desperation in which the mainstream denies it and the farther away from recovery the economy becomes. Last year was full of denial, especially as it related to that “anomaly” [...]

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