The orthodox intention behind NIRP is that by taxing idle “money” it will make banks put it to use. Setting aside relevant objections about what bank “reserves” actually are, negative nominal rates used in this fashion just don’t work that way. This is not an arguable point; it has been proven across 618 days or just shy of 21 months. [...]
If markets have rebounded today after the sustained selloff on fresh “stimulus” hopes, then one would have to wonder immediately what the background fundamentals might be. Setting aside all notions of past “stimulus”, the call for more would seem to suggest, quite strongly, something far, far less than desirable. Yet, in the same breath economists and brokerage firms would have [...]
It ain't so much the things we don't know that get us into trouble. It's the things we know that just ain't so. Mark Twain Mark Twain probably wasn't thinking of investors when he wrote those words, but truer ones have rarely been written. Investors routinely become overconfident in their assessment of economic and market conditions. They assume that [...]
While on the other side of the Pacific economists try to decipher what China has truly gotten itself into, over the Atlantic the Europeans are admitting that trillion is again not “enough.” As I have written repeatedly, the adjectives attached to QE depend on the tense. Ahead of time, peering into the unwritten future, QE “will be” powerful and able, [...]
On September 28, Mark Haefele, Global CIO at UBS Wealth Management, wrote at CNBC.com there was much more to the central banking offerings than currently employed. The implication, obviously, was a reassuring call to not heed any darkening outlook. Blaming that upon “overanalyzed data”, Mr. Haefele insisted that investors were becoming far too pessimistic given the potential monetarism yet untapped. [...]
From the growing inconsistencies even in statements about the short run, economists are going to have to be careful lest they conclude monetarism doesn’t work. That is, of course, where most of the rest of the world is headed (and where the “dollar” already resides) but the strains to credulity lately are nails in the coffin. I described the political [...]
I don’t think Mario Draghi panicked, but China is as good a scapegoat as any at the moment. The ECB’s intended adjustment in the PSPP (QE) is cosmetic, but then again QE itself is pretty much only that to begin with. It seems pretty obvious given the desperate lack of any positive impact from it so far, and the very [...]
The re-crash of oil prices during the recent “dollar” wave/run were hard on almost everyone involved, economically and otherwise, but perhaps not more so than the ECB and its QE proponents. Despite being attributed with every minor upward move that could plausibly be assigned, for all the hype there has been very little actual movement anywhere of significance. The virtuous [...]
Let’s start by stipulating that the ECB’s operations are far more complex. This is the case both in terms of actual operations but also in trying to figure out what goes where and why. That is at the start unsurprising given the European monetary framework; even though the euro as a denomination is continental there are still national fissures in [...]
Top News Headlines China devalues the Yuan. China lets Yuan float. China supports Yuan. Something happens in the Chinese currency market. Oil prices continue to fall. US raises flag over Havana. Dissidents' invitation gets lost in the mail. Tesla to sell more stock, profits elusive. Okay, very elusive. Okay, not frigging likely anytime soon. Dow chart gets a death cross; [...]
Stay In Touch