In August 2014, Federal Reserve Vice Chairman Stanley Fischer admitted to an audience in Sweden the possibility in some unusually candid terms that maybe they (economists, not Sweden) didn’t know what they were doing. His speech was lost in the times, those being the middle of that year where the Fed having already started to taper QE3 and 4 were [...]
Although he didn’t state it specifically in his November 2010 Washington Post op-ed formally justifying QE2, it was very clear that then-Fed Chairman Ben Bernanke intended it to work through lending and especially the bank channel. Though he doesn’t explain, nor has any official ever, why a second one was needed given that the first was “quantitatively” determined, Bernanke was [...]
November 2008 was an extremely busy month for authorities in the US. The financial markets had just undergone panic the month before, but rather than dissipate there were lingering indications that all was not yet over. On November 23, 2008, the Treasury Department, the FDIC, and the Federal Reserve issued a joint statement on Citigroup. The first two had agreed [...]
Germany is notoriously fickle when it comes to money, speaking as much of discipline in economy or industry as central banking. If ever there is disagreement about monetary arrangements, surely the Germans are behind it. Since ECB policy only ever attains the one direction, so-called accommodation, there never seems to be harmony. But that may only be true because “accommodation” [...]
On February 23, the equivalent yield for the 4-week US Treasury bill was just 39 bps. That was almost 11 bps (counting full pips) below the so-called money rate floor, to which T-bills are a near enough equivalent to count in that view. It was also 36 bps below IOER, which at one time was thought to be a huge [...]
The greatest mistake any statistician can make is to confuse correlation for causation. It is quite natural to do so, of course, a limitation not limited to modern society where information can at times seem limitless. There are also cases where you are left with little other alternative. But within them requires even more robust evidence and more thorough examinations, [...]
Rather than bury this chart in my earlier discussion of liquidity preferences, I felt it deserved its own piece to highlight what it shows. By all traditional and orthodox Economics, this just should not be possible. Yet, there it is and it’s not the only example of violation. For very different markets as robust as each one is, there should [...]
There are actually two parts to examining the orthodox treatment of the output gap. The first is the review, looking backward to trace how we got to this state. The second is looking forward trying to figure what it means to be here. One final rearward assessment is required so as to frame how we view what comes next. As [...]
Real average weekly earnings for the private sector fell 0.6% year-over-year in January. It was the first contraction since December 2013 and the sharpest since October 2012. The reason for it is very simple; nominal wages remain stubbornly stagnant but now a rising CPI subtracts even more from them. Consumers receive no significant boost to their incomes, but are starting [...]
Industrial Production in the United States was flat in January 2017, following in December the first positive growth rate in over a year. The monthly estimates for IP are often subject to greater revisions than in other data series, so the figures for the latest month might change in the months ahead. Still, even with that in mind, there is [...]
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