Home » Posts tagged 'zero interest rate policy' (Page 2)
Tag Archives: zero interest rate policy
Riding ZIRP Into The Doom Loop—–Monetary Central Planning’s Dead End
Riding ZIRP Into The Doom Loop—–Monetary Central Planning’s Dead End What the Fed really decided Thursday was to ride the zero-bound right smack into the next recession. When that calamity happens not too many months from now, the 28-year experiment in monetary central planning inaugurated by a desperate Alan Greenspan after Black Monday in October 1987 will come to […]
Cash-Strapped Saudi Arabia Hopes To Continue War Against Shale With Fed’s Blessing
Cash-Strapped Saudi Arabia Hopes To Continue War Against Shale With Fed’s Blessing Two weeks ago, Morgan Stanley made a decisively bearish call on oil, noting that if the forward curve was any indication, the recovery in prices will be “far worse than 1986” meaning “there would be little in analysable history that could be a […]
Scotiabank Warns “The Fed Is Cornered And There Are Visible Market Stresses Everywhere”
Scotiabank Warns “The Fed Is Cornered And There Are Visible Market Stresses Everywhere” Part One, China An economic slowdown is underway in China. This is reflected in the steep drop in the commodity complex and in the currencies of emerging market countries. Large imbalances are being worked off as Beijing attempts to shift the composition of […]
Future Shock and the Greening of America
Future Shock and the Greening of America What I find fascinating is our limited ability to make sense of trends unfolding in real time. During our recent breakfast meeting in Berkeley, author/blogger Jim Kunstler suggested that the coherence of eras waxed and waned, and the present era was incoherent. By this he meant the narratives being […]
ZIRP——The Monetary Trick Which Killed Wages
ZIRP——The Monetary Trick Which Killed Wages Stupid Fed Trick Number 1 The Fed thinks that keeping interest rates low spurs inflation. It was probably happy to see the purported uptick in wage inflation in the just released May jobs report. It wants to see wages start rising to create a bit of inflationary pressure. That […]
QE Breeds Instability
QE Breeds Instability Central bankers have promised ad nauseum to keep rates low for long periods of time. And they have delivered. Their claim is that this helps the economy recover, but that is just a silly idea. What it does do is help create the illusion of a recovering economy. But that is mostly […]
A Much Bigger Threat Than Our National Debt
A Much Bigger Threat Than Our National Debt The markets are acting as though it was already summer. They are wandering around with little ambition in either direction. Meanwhile, we’ve been wondering about… and trying to explain… what it is we are really doing at the Diary. We expect a violent monetary shock, in which the dollar […]
A Bubble on Thin Ice
A Bubble on Thin Ice An Inexperienced Herd A recent Bloomberg article discusses the fact that most traders active today have never known anything but the era of easy money, and wonders how they will handle the potential end of that era. To this it should be mentioned that the widely expected rate hike cycle may well […]
Something Smells Fishy
SOMETHING SMELLS FISHY It’s always interesting to see a long term chart that reflects your real life experiences. I bought my first home in 1990. It was a small townhouse and I paid $100k, put 10% down, and obtained a 9.875% mortgage. I was thrilled to get under 10%. Those were different times, when you […]
The trouble with cash
The trouble with cash When interest rates are zero and it costs a bank to look after your money it becomes an unattractive asset. Banks in some jurisdictions (such as Switzerland, Denmark and Sweden) are even charging customers interest on cash and deposits. And if you go to your bank and withdraw large amounts in […]
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 […]
Why Markets Are Manic—-The Fed Is Addicted To The ‘Easy Button’
Why Markets Are Manic—-The Fed Is Addicted To The ‘Easy Button’ Later this week another Fed meeting will pass with the policy rate still pinned to the zero bound. The month of May will make the 77th consecutive month of ZIRP—–an outcome that would have been utterly unimaginable even a decade ago; and most especially not with the […]
China Considers Launching QE; Shanghai Stocks Soar
China Considers Launching QE; Shanghai Stocks Soar Nearly two months ago we explained “How Beijing Is Responding To A Soaring Dollar, And Why QE In China Is Now Inevitable” in which we cited Cornerstone who reminded us “that from 2007 to late 2008, U.S. fed funds dropped 500 bp, and then the Fed still needed […]
The Euthanasia Of The Saver
The Euthanasia Of The Saver What have been the economic consequences of ultra-low interest rates? The answer might not be as hopeful as you may think. While better known for the role of government in stimulating the economy, John Maynard Keynes, one of the most influential economists of the 20th century, also provided the intellectual […]
What Happens To US Shale When The Easy Money Runs Out?
What Happens To US Shale When The Easy Money Runs Out? Today we will take a look at both Whiting Petroleum (WLL) and Continental Resources (CLR) as far as their Bakken economics. Overall the numbers will show that, despite claims of low cash costs per MBOE ($16 or so for CLR) and high IRRs on […]
