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Fox in the Hen House: Why Interest Rates Are Rising
Fox in the Hen House: Why Interest Rates Are Rising On March 31stthe Federal Reserve raised its benchmark interest rate for the sixth time in 3 years and signaled its intention to raise rates twice more in 2018, aiming for a fed funds target of 3.5% by 2020. LIBOR (the London Interbank Offered Rate) has […]
Belief in Inflation (And 4 or More Rate Hikes in 2018) Picks Up
Belief in Inflation (And 4 or More Rate Hikes in 2018) Picks Up Investors Increasingly believe the Fed may hike four or more times in 2018. The inflation scare is picking up steam. Due to Federal Reserve Beige Book regional reports, investors increasingly believe the Fed will go on a rate hike spree this year. […]
The Central Bank Crisis on the Immediate Horizon
The Central Bank Crisis on the Immediate Horizon While the majority keep bashing the Federal Reserve, other central banks seem to escape any criticism. The European Central Bank under Mario Draghi has engaged in what history will call the Great Monetary Experiment of the 21st Century – the daring experiment of negative interest rates. A look […]
Jerome Is The New Janet: Tie, Trousers And Same Old Keynesian Jabberwocky
Jerome Is The New Janet: Tie, Trousers And Same Old Keynesian Jabberwocky The election of 2016 was supposed to be the most disruptive break with the status quo in modern history, if ever. On the single most important decision of his tenure, however, the Donald has lined-up check-by-jowl with Barry and Dubya, too. That is to […]
What to Expect From Central Bankers
WHAT TO EXPECT FROM CENTRAL BANKERS The Federal Reserve continues to tighten and other Central Banks will follow The BIS expects stocks to lose their lustre and bond yields to rise The normalisation process will be protracted, like the QE it replaces Macro prudential policy will have greater emphasis during the next boom As financial […]
What a Hoot: Fed Chairman Powell Says “Growth Has Picked Up”
What a Hoot: Fed Chairman Powell Says “Growth Has Picked Up” In his first non-FOMC speech, Jerome Powell stresses growth and jobs. Inquiring minds are investigating Jerome Powell’s speech on his Outlook for the U.S. Economy presented today at the Economic Club of Chicago, Chicago, Illinois. Here are a few key quotes. After what at […]
The Next Crisis Will Be The Last
The Next Crisis Will Be The Last It is an interesting thing. Throughout the last four decades there is a direct link between the actions of the Federal Reserve and the eventual economic and market outcomes due to changes in monetary policy. In every case, that outcome has been negative. The general consensus continues to […]
Bank of Japan Buys Record Amount of Equity ETFs: Once Upon a Time
Bank of Japan Buys Record Amount of Equity ETFs: Once Upon a Time The Japanese stock market fell, so the Bank of Japan bought more equity funds. After cornering the bond market, the Bank of Japan has its sight on the stock market with a Record Buying Binge in March. The Bank of Japan spent […]
The Risk of the Fed’s Continuous Rate Hikes
The Risk of the Fed’s Continuous Rate Hikes This past week, the Fed raised interest rates by 0.25%. The effective Fed fund rate is now 1.63% – the highest since the big market crash of 2008. However, it could get as high as 3.375% by 2020. The decade 2020 – 2029 could see a high-tech […]
Stocks Post WORST April Start Since The Great Depression
Stocks Post WORST April Start Since The Great Depression The S&P 500 closed down more than 2.4% Monday and the broad market index posted its worst April start since 1929. This slide in the markets caused the worst start since the Great Depression, sparking fears we are on the same path. The Dow Jones industrial average fell […]
Monetary Policy is a Complete Failure? Will Shutting Down the Fed Solve All the Problems?
Monetary Policy is a Complete Failure? Will Shutting Down the Fed Solve All the Problems? I recently did an interview and was asked about the Federal Reserve. There is so much absolute nonsense sophistry that circulates where people think that ending the central bank will somehow cure everything. I really just laid it out plain […]
Crisis Struck 10 Years Ago: What’s Changed?
Crisis Struck 10 Years Ago: What’s Changed? The financial crisis and the massive federal response reshaped the world we live in. Or did it? The Wall Street Journal has an interesting infographic series of 25 charts entitled 10 Years After the Crisis. Here’s eight of the 25. Median Income Barely Up Forget averages. The median […]
What The Gold-Silver Ratio Says About The Future Silver Price
What The Gold-Silver Ratio Says About The Future Silver Price While silver investment demand is totally off the radar, certain indicators, including the Gold-Silver ratio, suggest that interest in the poor man’s gold will likely increase significantly over the next few years. The rising interest in silver will also occur as the broader markets continue […]
The Looming Mortgage Liquidity Crisis
THE LOOMING MORTGAGE LIQUIDITY CRISIS Every 10 years or so there is a banking crisis. We are due. However, the furthest thing from most people’s minds with the Trump boom is a banking/financial crisis, except for a few folks at the Brookings Institution, who just released a paper entitled “Liquidity Crisis in the Mortgage Market.” You […]
The Fed is Raising Rates Because of the Pension Crisis
The Fed is Raising Rates Because of the Pension Crisis QUESTION: The Fed says it will raise rates two or three times more this year. My question is this: If the stock market is crashing, why are they still raising rates? HW ANSWER: The Fed is raising rates because they must be NORMALIZED given the […]
