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ben bernanke

Rationalizing Betrayal

By |2015-08-26T12:52:51-04:00August 26th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

To illustrate just how badly Monday’s selloff (and yesterday’s late day reversal) seems to have shaken core confidence in the overriding narrative (ALL IS WELL!) you need only view the drastic reversal on what stock prices supposedly mean. With QE’s producing little or no tangible economic benefit, certainly nothing specific with which its proponents can easily point to, they have [...]

The Very Real, High And Ongoing Costs of Eurodollar Decay

By |2015-07-31T15:47:23-04:00July 31st, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

Sticking with purely financial expression of the eurodollar standard it is easy at times to forget such monetary influence has very real consequences. That is true in the US in particular, as even though the recovery is both deficient and waning it isn’t the disaster it is in other, connected places. It was, after all, the rise of the eurodollar [...]

More QE Non-neutrality

By |2015-07-29T16:35:24-04:00July 29th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

The simple narrative about QE is drawn from what is believed a simple process. The central bank buys bonds and by doing so it is simply assumed to be an “extra” bid on bond prices; therefore interest rates fall in whatever issue is being targeted by QE. Even in the US, QE has had trouble with that simple relationship. Instead [...]

Still The Same Greece, Still The Same Math

By |2015-07-08T12:58:06-04:00July 8th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

In April 2008, Nassim Taleb was becoming a household name criticizing the quant dominance in finance. Bear Stearns had just failed and the entire edifice of mathematical order was still breaking down, as the last bastions of credit default swap “supply”, the monoline insurers, were still rumored to be heading for insolvency (while the nightly news focused on whether that [...]

The Problem Is Accumulating Accumulation

By |2015-06-22T16:26:26-04:00June 22nd, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

The home market may literally be testing the notion that interest rate manipulation has the net effect of pulling forward demand. Existing home sales, as tabulated by the National Association of Realtors, surged in May to a new six-year high. That sounds like terrific news about a rebound in the real estate market after quite a rough period dating back [...]

GDP Works When There Is Nothing Going On

By |2015-06-18T11:21:00-04:00June 18th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

GDP estimates for Q2 2015 have been rising in June, largely due to updates on consumer and household spending. The first, the Quarterly Services Survey (QSS) showed a somewhat higher spending pattern for financial services (the largest component), which pushed Q2 GDP forecasts (according to the Atlanta Fed’s GDPNow tool) to +1.4%. Last week, the strictly seasonally-adjusted “surge” in retail [...]

Looking For The Next One; Part 2, Finding Risk Rather Easily

By |2015-06-03T16:33:51-04:00June 3rd, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

Part 1 is here, Orderly or Not (short version: not). Also noted yesterday, the Fed sees no risks of bubble trouble because they are looking at it all from the 2008 perspective. That is completely wrong-headed; if there is a “next one” it will have nothing to do with subprime mortgages, or even mortgages and real estate. By March 2007, [...]

Looking For The Next One; Part 1, Orderly Or Not?

By |2015-06-03T16:34:47-04:00June 3rd, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

I generally remain noncommittal about giving specific predictions about the future because there is simply no way toward predilection. We can think about probabilities as a guide for analysis, particularly in setting investment guidelines, but to offer targets for factors like GDP or some stock index is pointless. Even now, with all that is taking place of economic unraveling, there [...]

Whose Recovery Is It Anyway?

By |2015-06-03T10:44:56-04:00June 3rd, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

You may have heard recently about the Transportation Safety Administration’s record for safety measures in airline transportation. The task with which the government agency is charged has become a bit of a joke, with public perception almost of a gang of thieves running a sanctioned-criminal enterprise. The groping and stealing are held back, with apathy and inertia on its side, [...]

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