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monetary policy

Is There Really A Qualitative Difference Between Toyota And Cisco?

By |2013-11-14T10:52:28-05:00November 14th, 2013|Markets|

The Japanese administration is facing increasing criticisms as frustrations grow. This is contrary to the established narrative that everything is on the right track in Japan, and that Prime Minister Abe’s economic programs, including the Bank of Japan’s epic monetarisms, are wildly successful. Nowhere was that narrative more evident than recent commentary about Japan Inc.’s revival through current earnings. The [...]

Taper Template

By |2013-11-13T17:32:36-05:00November 13th, 2013|Markets|

The Great Depression was more than a monolithic period of economic calamity. In fact, it was more like a series of crises interceded by hope and optimism. After the initial collapse from 1929-33, the years immediately following appeared quite robust. Stock prices rebounded sharply as did consumer prices – the “inflation” that so many modern economists pine for. However, that [...]

Europe’s ‘Money’ Problem

By |2013-11-12T16:30:16-05:00November 12th, 2013|Markets|

If ever there was a case of “recession fatigue” it was Europe in the summer of 2013. There has been nothing but optimism from the Continent throughout, and sunshine purportedly reflected a burgeoning recovery that was far more broadly situated than the vagaries of Germany’s export economy. Spain and Italy were to be among those that could proudly proclaim, as [...]

Look For More Weakness In Gold

By |2013-11-08T16:17:18-05:00November 8th, 2013|Markets|

After the overdone debt ceiling/gov’t shutdown passed, gold was “released” from its interbank strangle and forward rates returned negative out to 3 months. The shortage was again prominent and gold prices began to adjust accordingly.  They didn't get very far. Since November 1, right around the time dollar conditions began to tighten noticeably again, forward rates have been rising in [...]

The Window of Calm Closes

By |2013-11-05T16:53:23-05:00November 5th, 2013|Markets|

Don’t look now, but US dollars are tightening again. The dollar calm that swept over markets since September 4 appears to have reached a nadir on October 23. Eurodollar markets in late October only moved very slightly, but enough to keep futures from rolling with the calendar, and thus indicating that risk positions and balance sheet expansion might be changing. [...]

The Market Isn’t The Market

By |2013-11-01T16:07:23-04:00November 1st, 2013|Markets|

With so much talk about bubbles resurfacing lately, it’s worth an attempt to try to draw out exactly what a stock bubble looks like. There is little dispute about the bubble nature of the dot-com era, but the market has drastically changed in its appearance and structure beyond just Greenspan’s exuberant creation. In this instance it is more than just [...]

Halloween, BoJ Style

By |2013-10-31T11:26:49-04:00October 31st, 2013|Markets|

I spend a lot of time on Japan not simply because it is the originator for the great QE experiment, rather the similarities between the US and Japan are well-worn and numerous. The primary interest in 2013, with the central banks of both going all out in monetary cajoling, is that those similarities are growing ever-closer. A few days ago [...]

The FOMC Trap

By |2013-10-30T15:21:10-04:00October 30th, 2013|Markets|

That there was no change to QE was not really unexpected in October, though consensus about this kind of policymaking theater has become somewhat of a crapshoot. The reason is, contrary to pre-crisis experience, a growing and more obvious schism in the FOMC façade. There have been disagreements in the past, uncovered by the delayed release of full meeting transcripts, [...]

The Rabbit Hole Deepens

By |2013-10-29T16:29:00-04:00October 29th, 2013|Markets|

Given the slide in activity at the nation’s retail outlets in September, and the worries that are going to persist over tapering mortgage refis, the economy probably did not need another setback. More specifically, the “wrong” side of the bifurcated economy is bracing for cutbacks in SNAP benefits. Part of the ARRA (remember the “stimulus” bill in 2009? That it [...]

Mortgage REITs Under Scrutiny

By |2013-10-28T14:53:05-04:00October 28th, 2013|Markets|

If the Financial Times report is to be believed, and there is no indication contrary, then FRBNY took warnings earlier this year to heart and began investigating. FT links a February speech by Fed Governor Jeremy Stein about “overheating credit markets” to what looks like an ongoing probe of bank exposure to mortgage REITs. “The worry is that MReits could [...]

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