That was a circus. These things are typically ungraceful to begin with, but this one was in a class by itself. Mario Draghi, the leader of the rudderless ECB, was in top form today. For pure entertainment value, he couldn’t have done better. People think that’s not the job of a top central banker but it is! Monetary policy long [...]
Markets today celebrated more bad news out of Germany. Misunderstanding especially in stocks is par for the course, not that it’s much better outside of them. German officials are laying the groundwork to change the nation’s banking laws so that it’s two largest banks, really “banks”, can more easily combine. If it should ever come to that. The major sticking [...]
I am no fan of John Maynard Keynes. But this isn’t to say that there is nothing worthwhile about Keynes’ work. Indeed, it is a logical fallacy that one can’t object to his conclusions while at the same time admiring some of the ways with which he arrived at them. There is a lot about what Keynes thought, and wrote, [...]
If there is one thing Ben Bernanke got right, it was this. In 2009 during the worst of the worst monetary crisis in four generations, the Federal Reserve’s Chairman was asked in front of Congress if we all should be worried about zombies. Senator Bob Corker wasn’t talking about the literal undead, rather a scenario much like Japan where the [...]
How quickly things change. Only a few days ago, a fuel tax in France was blamed for widespread rioting. Today, Emmanuel Macron’s government under siege threatens to break its fiscal budget. Having given up on gasoline and diesel, the French government now promises wage increases and tax cuts. Italy has found competition in the race to violate EU fiscal guidelines. [...]
There are several points of confluence between financial markets and the real economy. Asset price volatility can produce negative effects on confidence, of course, forcing economic agents to reconsider their own business activities. More than that, in the gigantic bond market, in particular, a turn in pricing regimes is often accompanied by the dreaded credit crunch. That’s when it starts [...]
Banking regulation is never easy. Shifting regimes and tightening things up a bit during a rip-roaring global economy, however, makes it much less stressful. Among global banking systems the one in India has lagged. Much of the rest of the world had moved on to higher capital requirements in addition to (sappy) liquidity constraints long ago so as to keep [...]
The enormous setback hadn’t yet been fully appreciated in March 2012 when China’s Premiere Wen Jiabao spoke to and on behalf of the country’s Communist governing State Council. Despite it having been four years since Bear Stearns had grabbed the whole world’s attention (for reasons the whole world wouldn’t fully comprehend, specifically as to why the whole world would need [...]
There were rumors and whispers of a trade truce between China and the US. Wages domestically grew by the most since 2009, better than 3% last month. OPEC is going to be cutting oil production again. And most of all, for the mainstream narrative anyway, the Fed is about to go on a break. Why didn’t markets react positively to [...]
The real question is why no one says anything. They can continue to make these grossly untrue, often contradictory statements without fear of having to explain themselves. Don’t even think about repercussions. Even in front of politicians ostensibly being there on behalf of the public, pedigree still matters more than results. It’s actually worse than that since all that I’m [...]
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