What if the FOMC and the wider Federal Reserve apparatus had heeded Greenspan’s uncertainty? There is grave danger in wandering too far into counterfactuals, but there is some value, I think, in the exercise in this context. What we are really talking about is time, and it is time that is most relevant today as the greatest economic cost. This [...]
I have referred to the June 2003 FOMC meeting many times before and I suspect that I will continue to do so long into the future. It was one of those events that should be marked in history, truly relevant to the future developments that became panic and now sustained economic decay. It’s as if the committee members at that [...]
There is great allure in comparing our current economic circumstances to those in 1937, and why wouldn’t there be? The associations are especially striking, starting with the gaping hole left over by each contraction. Each recovery, then and now, was at least moving in the right direction but not nearly fast enough to close the gaps. So where growth rates [...]
While continuing to tout an economic recovery that is being missed by far too many, the government and economists say one thing and then move toward the other. The unemployment rate claims one economic version that is talked about openly, but then there are “little things” that various official capacities seek to carry out suggesting they realize full well the [...]
When former Dallas Fed President Richard Fisher stepped down last March after a decade in that role, the New York Times (of course) wrote his professional obituary under the headline Richard Fisher, Often Wrong But Seldom Boring. Fisher had apparently viewed his own philosophical root and career at the Fed as something of an updated Paul Volcker, not surprising given [...]
When Janet Yellen testified to Congress last week, she was as usual careful with her words. Alan Greenspan once called it “mumbling with incoherence” but there is very little left to rambling in Yellen’s predicament. Where Greenspan was once the “maestro” and Bernanke the “hero” Yellen is stuck holding the bag, and I think she knows it. In truth, there [...]
The entire point of leveraged positions is the margin of safety. That is true on both sides of that equation, as for the provider and the borrower/user. In the most famous examples of collapse, from AIG to LTCM losses were never really the issue. None of them could withstand instead collateral calls to their liquidity reserves. As noted last week, [...]
The link between stock prices and oil has been especially high of late, and that has left quite a few traders and experts stumped. For a good long while any impact from oil was denied as only “transitory” or even helpful to consumers through some sort of “tax cut” effect. In January 2016, however, liquidations appeared regularly in one alongside [...]
When the Fed is revered as it is in certain circles, its superstitions afford unwavering faith and even straight up desire. It is much, much easier and comforting to believe in a benevolent guiding spirit, an all-powerful force of good that removes all the nightmares. The cultivation of that ideal started in the 1980’s but reached its apex in the [...]
Ben Bernanke has shown a singular capacity from his entire time as Chairman of the Federal Reserve, one that he has clearly held onto and even nurtured in the nearly two years since he left office. Unlike many other notable economists, Bernanke still has the ability to astound, to produce an uneven marvel at how the man ever got so [...]
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