We ran into this complication during Bernanke’s partial “confession” about his brand of QE, namely that what failed was not the power of the Fed overall but rather to extend the power of the Fed beyond merely the financial. He is trying to claim that QE wasn’t really impactful after having totally assured anyone who would listen contemporarily that it [...]
In the days before 2007, the idea of monetary “stimulus” was relatively straight-forward in theory as well as (seemingly) practice. A central bank declared that it would reduce an interest rate target and the “market” would respond by doing the work for it. In other words, all that was needed was an indication and banks would make it so as [...]
With the ECB set to plan on doing some QE, without much by way of reassurance that it can actually be accomplished, the central bank updated its modeled projections for QE’s success. That part was easy for them as they always assume at the outset that QE will do what they say QE does, though it is interesting just by [...]
The Keynesian revival that is currently underway in the backrooms and hallways of assorted world governments is being somewhat replicated in Europe this week. It is all predicated on the position that all previous forms of “stimulus” from the fiscal side were not the right size, composition or color for that matter and thus the lack of recovery can be [...]
The European mess is coming more into view, and in almost every case that is a negative outcome. There really isn’t much going right in Europe right now, belying everything that was said, done or proclaimed only a year ago. Italian unemployment unexpectedly rose to a record high that’s more than double the German rate, keeping alive concerns about the [...]
While Abenomics continues to be classified as “pro-growth” rather than vilified for what it has done, that is as clear in the real economy as it is in the financial realm. Japanese experimentation with ZIRP has destroyed, effectively, any informational content from the JGB curve which contributes to continued resource waste. The Japanese just auctioned a 2-year note at a negative [...]
The stock market takes off in holiday celebration of the FOMC being even less clear than it really has been in some time; perhaps going all the way back to Alan Greenspan’s intentional mush. Equity “investors” are happy that the Fed may be happy about the economy, even though there is nothing in actual markets (outside of stocks) to suggest [...]
Just as China grapples with the scale of economic waste induced by heavy monetarism, Europe has that old 2011 feeling again of financial waste. Mario Draghi’s July 2012 promise to “do whatever it takes” was taken by banks and financial “investors” as a free-for-all to ride severely discounted sovereign debt to tremendous profit. They did so much of that the [...]
If “investors” have notoriously short attention spans, then surely those in and of Europe are making a case to be classified as something entirely new, different, and worse. It is now just one day shy of six months ago that the latest central bank schematic was unleashed to the universal cheer of “markets” and economists alike. The ECB wasn’t fooling [...]
Sovereign debt is the tangible pivot by which everything in Europe depends. That speaks not just to persistent fiscal imbalances that remain, years later, unresolved, but the unspeakable financial equivalent to a doomsday scenario. The damage to the European economy from the last financial panic is slowly being revealed (as with the unrequited and un-criticized promises of central banks), which [...]
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