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Fed’s Asset Purchases Result in Increased Market Volatility
Fed’s Asset Purchases Result in Increased Market Volatility “Once again, the empirical evidence supports reigning in the Fed; the economy works better when the Fed does less, not more.” The Federal Reserve underwent a massive regime shift following the 2008 financial crisis. It incorporated several new tools into its monetary policy arsenal, ranging from interest on excess […]
The Fed Will Break the Economy
The Fed Will Break the Economy Last week, the Fed was handed an unexpected gift as first-time jobless claims fell to the lowest level since 1969, which gives the Federal Reserve the green light to continue tapering its $120 billion monthly purchases of U.S. Treasury and mortgage-backed securities. Given the Fed’s dual mandate of maximum employment and stable […]
The Eurozone Is in a Danger Zone
The Eurozone Is in a Danger Zone It is easy to conclude the EU, and the Eurozone in particular, is a financial and systemic time-bomb waiting to happen. Most commentary has focused on problems that are routinely patched over, such as Greece, Italy, or the impending rescue of Deutsche Bank. This is a mistake. The […]
ECB Confirms It Will End Asset Purchases, Will Reinvest Maturities In Full
ECB Confirms It Will End Asset Purchases, Will Reinvest Maturities In Full As expected, the ECB – which obviously is keeping its rates unchanged – confirmed it would end its asset purchases in December 2018, while clarifying for the first time that it would “continue reinvesting, in full, the principal payments from maturing securities purchased […]
QR 3/2018: How the Eurozone breaks
QR 3/2018: How the Eurozone breaks The Eurozone is a fragile financial mammoth. While its GDP lacks the US by around $3 trillion, assets of the banking sector are some 240 percent of GDP vs. around 90 percent in the US. It has been kept standing only through the large-scale asset purchase program (quantitative easing […]
It Was Not Effective, But We’ll Do It Again
It Was Not Effective, But We’ll Do It Again Boston Fed President Eric Rosengren has some interesting comments about QE today. The Bond Buyer reports Rosengren Expects Fed to Again Resort to Asset Purchases. Although large scale asset purchase programs may not be as effective as previously believed, Federal Reserve Bank of Boston President Eric […]
Central Banks Have Purchased $2 Trillion In Assets In 2017
Central Banks Have Purchased $2 Trillion In Assets In 2017 In his latest “flow report”, BofA’s Michael Hartnett looks at the “Disconnect Myth” between rising stocks and bonds and summarizes succinctly that there is “no disconnect between stocks & bonds.” Why? The best, and simplest, explanation for low yields & high stocks is simple: so […]
Yes, The ECB Chief Economist Really Said It: “If You Print Enough Money, You Always Get Inflation. Always.”
Yes, The ECB Chief Economist Really Said It: “If You Print Enough Money, You Always Get Inflation. Always.” Once upon a time there was a cute, if amusing and terribly disingenuous debate among those who have never actually traded but pretend to know finance, about what QE and “unconventional policy” actually was. “It’s an asset […]
The Federal Reserve – Which CREATED Quantitative Easing – Admits QE Doesn’t Work
The Federal Reserve – Which CREATED Quantitative Easing – Admits QE Doesn’t Work Even the Fed Admits QE Doesn’t Work The Vice President of the Federal Reserve Bank of St Louis (Stephen Williamson) writes in a new Fed white paper (as explained by Zero Hedge): The theory behind Quantitative Easing (QE) is “not well-developed” The evidence in support […]
Who Runs the Fed?
Who Runs the Fed? Ben Bernanke, 2011. (Shirley Li/Medill DC via Flickr) The 2008 financial crisis challenged many orthodox assumptions in finance and economics, including the proper role and accountability of central banks. The U.S. Federal Reserve, commonly known as the Fed, is the world’s most powerful central bank. One major source of Federal Reserve […]
When Authorities “Own” the Market, The System Breaks Down: Here’s Why
When Authorities “Own” the Market, The System Breaks Down: Here’s Why Central planning asset purchases aimed at propping up prices destroy the essential price discovery needed by private investors. Panicked by the possibility of declines that undermine the official narrative that all is well, authorities the world over are purchasing assets like stocks, bonds and […]
