What makes a stock bubble is really two parts. Most people might think those two parts are money and mania, but actually money supply plays no direct role. Perceptions about money do, even if mistaken as to what really takes place monetarily from time to time. In fact, for a bubble that would make sense; people are betting in stocks [...]
In Ian Fleming’s 1959 spy novel Goldfinger, he makes mention of the Moscow Rules. These were rules-of-thumb for clandestine agents working during the Cold War in the Soviet capital, a notoriously difficult assignment. Among the quips included in the catalog were, “everyone is potentially under opposition control” and “do not harass the opposition.” Fleming’s book added another, “Once is an [...]
Part 1 is here. The real clue as to what was going on monetarily was provided in early 2008 not by a Federal Reserve statement about some new program it was hastily putting together (except by proxy of what it meant for conditions in private wholesale markets that the Fed thought it necessary to hurriedly arrange some new liquidity program, [...]
I’ve never understood the myth of central bank dollar swaps. They are automatically placed in the category of QE or IOER, perhaps because very few seem to understand what was really happening with them (as well as outside of them). The Fed expands its balance sheet which everyone assumes is the same as expanding either base money or something like [...]
The economic reports released since the last update were slightly more upbeat than the previous period. The economic surprises have largely been on the positive side but there were some major disappointments as well. The economy has been doing this for several years now, one part of the economy waxing while another wanes and the overall trajectory not much changed. [...]
According to orthodox theory, if interest rates are falling because of term premiums then that equates to stimulus. Term premiums are what economists have invented so as to undertake Fisherian decomposition of interest rates (so that they can try to understand the bond market; as you might guess it doesn’t work any better). It is, they claim, the additional premium [...]
This week the Bureau of Economic Analysis will release updated estimates for Q2 GDP as well as Personal Consumption Expenditures (PCE) and Personal Incomes for July. Accompanying those latter two accounts is the currently preferred inflation standard for the US economy. The PCE Deflator finally hit 2% and in two consecutive months, after revisions, earlier this year. The inability of [...]
Anyone available to travel to the Caymans in October should consider adding this conference to their itinerary. The topic this year is money and its future. I am confirmed to participate, though the rest of the roster of featured speakers makes it far more worth your time. There promises to be some really good, really important discussions and presentations. It [...]
Many if not most people were looking at Janet Yellen’s Jackson Hole speech hoping for some hint or clue as to her “hawkishness” or “dovishness.” As I’ve written before, that’s the wrong to look at the Federal Reserve and its policy. They want to raise rates simply because it’s been one hundred and nineteen months since they started lowering them. [...]
Stay In Touch