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The Central Problem with Central Banks: They Become the Greater Fools/Bag-Holders
The Central Problem with Central Banks: They Become the Greater Fools/Bag-Holders Those who are confident the central banks can print unlimited money may find there are political and financial consequences to such extremes that cannot be foreseen. The central problem with central banks is their mandate now includes propping up all asset markets globally. Back in […]
A Portrait of the Classical Gold Standard
A Portrait of the Classical Gold Standard “The world that disappeared in 1914 appeared, in retrospect, something like our picture of Paradise,” wrote the economist Cecil Hirsch in his June 1934 review of R.W. Hawtrey’s classic, The Art of Central Banking (1933). Hirsch bemoaned the loss of the far-sighted restraint that had once prevailed among the “bankers’ […]
The Goldilocks Illusion
The Goldilocks Illusion Why Market Participants Liked the Payrolls Report Some people have wondered why the stock market reacted with such a big rally to last Friday’s payrolls data. After all, the report wasn’t much to write home about, especially if one ponders the details. In addition, the already weak March payrolls data were revised lower […]
How the Liquidity “Delusion” Leads to a Crash
How the Liquidity “Delusion” Leads to a Crash They were just about all there at the Las Vegas SkyBridge Alternatives Conference, or SALT: Daniel Loeb, T. Boone Pickens, and of course George Papandreou, who in March 2011 as Greek prime minister had produced one of the funniest official Eurozone lies ever when he reassured those that were […]
Bank Reserves and Loans: The Fed is Pushing On a String
Bank Reserves and Loans: The Fed is Pushing On a String The money multiplier effect no longer works. As you (hopefully) know, we live in a fractional reserve banking system: if the bank is required to have $1 in cash reserves for every $10 in loans, it means the bank creates $10 of new money when it issues a […]
The Embarrassment of Transparency
The Embarrassment of Transparency Over the past decade or so, “transparency” has become one of the buzzwords that has guided the Federal Reserve’s culture. The word was meant to convey the belief that central banking was best done for all to see in the full light of day, not in the murky back rooms of […]
Oil Sector May Not Cause Financial Apocalypse After All
Oil Sector May Not Cause Financial Apocalypse After All Across the oil patch, banks are starting to close off their exposure to some of the riskiest oil drillers. A new monthly survey from the Federal Reserve finds that banks that have issued loans to oil drillers are projecting some of them to go bad. Over the course […]
The Rich Get Richer: Titanic Stock Bubble Fueled by Buyback Blitz
The Rich Get Richer: Titanic Stock Bubble Fueled by Buyback Blitz Why are stocks still flying-high when the smart money has fled overseas and the US economy has ground to a halt? According to Marketwatch: “For the eighth week in a row, long-term mutual funds saw more money flowing out of U.S. stocks and into international stocks, according […]
Blogger Ben’s Basically Full Of It
Blogger Ben’s Basically Full Of It Ben Bernanke’s skin is as thin, apparently, as is his comprehension of honest economics. The emphasis is on the “honest” part because he is a fount of the kind of Keynesian drivel that passes for economics in the financially deformed world that the Bernank did so much to bring about. Just […]
Why the Fed Will Crash the Economy If It Hikes Rates: In Three Charts
Why the Fed Will Crash the Economy If It Hikes Rates: In Three Charts If you’ve been scratching your head since the middle of last year as consumer confidence surveys depicted an optimistic, eager to spend consumer while other hard economic data was showing a sputtering economy, we’re here to put your mind to rest. […]
HFT, inept regulators & Fed distortion = more flash crashes
HFT, inept regulators & Fed distortion = more flash crashes As luck would have it, we had Joe Saluzzi lined up to record a podcast the day the news broke recently that the suspected culprit for the 2010 flash crash, Navinder Singh Sarao, had been arrested. Saluzzi is co-founder of Themis Trading LLC, long-time cautionary on the […]
WSJ Slams Bernanke’s Rambling Blog Post: “Stop Blaming Everyone” For Your Mistake
WSJ Slams Bernanke’s Rambling Blog Post: “Stop Blaming Everyone” For Your Mistake The mainstream is beginning to sound a lot like some fringe blog… A week after the world’s largest sovereign wealth fund unleashed a tirade against high-frequency trading and monetary policy distortions, The Wall Street Journal has penned an Op-Ed ramping up its war against Bernanke (and The […]
There Is No Solution To The Crisis
There Is No Solution To The Crisis A long, long time ago… it was the 16 September 1992, Black Wednesday, when the British Government was forced to withdraw the pound sterling from the European Exchange Rate Mechanism(ERM) after it was unable to keep the pound above its agreed lower limit in the ERM. A certain […]
Suddenly “You Can’t Ignore The Data” Has Turned Into “Trust Me”
Suddenly “You Can’t Ignore The Data” Has Turned Into “Trust Me” The week that passed has been nothing short of a roller coaster ride for many nervous investors. And for some: a realization that the once hyped, hawked, and levered Billion dollar babies can indeed “come off the rails.” Turning the once joyride into something more […]
We Just Broke 2008′s Record for the Fastest Economic Unraveling!
We Just Broke 2008′s Record for the Fastest Economic Unraveling! In my last piece I provided a technical analysis that signaled we are entering the first stage of a bursting bubble that we’ll call the Fed Bubble. Now while I do believe technicals provide good insight to the economic landscape I see them as a necessary rather […]
