My fellow Americans, our long national nightmare is over. Ben Bernanke has joined the millions of Americans in the unemployment line that he worked so hard to lengthen. Over two terms as Chairman and almost three years as a Governor of the Federal Reserve - interrupted by a brief stint as head of President Bush's Council Of Economic Advisers (talk [...]
The Law Of Unintended Consequences, often cited but rarely defined, is that actions of people - and especially of government - always have effects that are unanticipated or unintended. Economists and other social scientists have heeded its power for centuries; for just as long, politicians and popular opinion have largely ignored it. Rob Norton, The Concise Encyclopedia of Economics There [...]
Though we have passed through the event horizon on taper finally, it is still difficult to understate how much the threat of it upset the various settled mannerisms of credit and dollar markets this past summer. Though there is a degree of calm in appearance now, there are certainly more than a few hints of markets still enthralled by some [...]
Quarterly results from IBM are watched because they serve as a proxy for business spending across the globe. Capex in the modern world often takes the form of technology/computer investments. In fact, productivity growth in the past three decades has been driven, at the margins, by corporate investments in digital technology. Ever since late last year, IBM has been keeping [...]
Perhaps being deprived of incoming data has set my mind too far toward conspiratorial, but there were a few developments in the global finance realm that piqued my interest. First, the head of the World Bank basically warned emerging market economies to get their act together in the next few months. “We think that now emerging market economies have maybe [...]
The emerging market story has unfortunately been turned into, as the kids say, a meme. According to Bloomberg, the “weakest” of the EM currencies have been dubbed the “Fragile Five” by Morgan Stanley “strategists”. These include the South African rand, Brazilian real, Indian rupee, Indonesian rupiah and Turkish lira (3 out of the 5 BRICS). Such incandescent weakness, a surprise [...]
For about three hours last Wednesday the goals of the Ben Bernanke led Fed were achieved when the NASDAQ market stopped trading due to a technical glitch. With no quotes available, investors were not able to sell - or buy - and the level of the NASDAQ market was stuck at a semi-permanent plateau. Finally, a way to unwind QE [...]
Interest rates, as measured by the 10 year Treasury note, are up roughly 100 basis points (1%) from the low yields set last year of about 1.4%. That has everyone and his brother calling for the end of the great bond bull market that has been going on all my adult life. The 10 year Treasury note peaked in yield [...]
Market volatility increased again last week and while I could point to a lot of different factors, I think the most important one was the uncertainty produced by the musings of Ben Bernanke. I along with everyone else - and that should have been a warning sign - believed that Bernanke would come to the press conference with the purpose [...]
Gold dropped 20%. Oil dropped over 10%. The Goldman Sachs Commodity Index dropped 11%. The US Dollar rose. Last week? No, that's what happened in the first week of July of 2008. Last week's rout in the commodities markets was eerily similar to that week nearly 5 years ago when the first signs of the great financial crisis were coming [...]
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