they really don’t know what they are doing

Data Dependent

By |2016-09-01T16:48:47-04:00September 1st, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In 1991, economist Ronald H. Coase was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, colloquially referred to as the Nobel Prize in Economics. His lecture that December given while collecting it was notable in good part not just for his contributions but rather how he saw why such contributions were actually necessary. As he said [...]

The Inarguable Math of the Morally Unfit

By |2016-08-29T13:14:38-04:00August 29th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Central bankers have impeccable usually PhD level credentials from all the right places. Because of that, it is simply assumed that they are the preeminent experts of how any economy works. In reality, however, the term stamped on each of their doctoral degrees is highly misleading. Though it may say economics, it was really and truly nothing more than a [...]

What Yellen May Have Said

By |2016-08-26T18:46:18-04:00August 26th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In case you need any assistance in trying to figure out when Janet Yellen spoke, or at least when the text of her speech was released from embargo, here is a hint: It seems her stream of consciousness was somewhat consistent with the old Greenspan idea of “fedspeak.” People and investors appear to have taken from it what they wished, [...]

The Reckoning

By |2016-08-25T18:26:28-04:00August 25th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

As I have written many, many times, the “unexpected” events of January and February were a dramatic wake-up call for central banks. Last August’s global liquidation they could at least try to ignore because it could possibly fit within the paradigm of “transitory”, a one-off aberration that was some mysterious Chinese viral contagion and thus of not any great, lingering [...]

Magic Number Theory Must Be Magic For All Sides

By |2016-08-22T15:29:44-04:00August 22nd, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

John Williams: Finally, monetary policy frameworks should be critically reevaluated to identify potential improvements in the context of a low r-star. Although targeting a low inflation rate generally has been successful at taming inflation in the past, it is not as well-suited for a low r-star era. There is simply not enough room for central banks to cut interest rates [...]

Chart of The Week; They Really Don’t Know What They Are Doing Version

By |2016-08-05T18:43:52-04:00August 5th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Given it is payroll Friday, it has to be a chart related to the futility of focusing on the headline number. There is any number of ways with which to accomplish this, but it serves well to highlight the relationship already presented in my view of this specific view of the payroll report. Economists often claim that the participation problem [...]

It Was All A Dream

By |2016-08-02T16:31:15-04:00August 2nd, 2016|Markets|

Last Friday the Statistics Bureau of the Japanese Ministry of Internal Affairs and Communication reported some more bad news for Prime Minister Abe and really Bank of Japan chief Kuroda. Month-over-month, the consumer price index was down again, leaving it 0.48% less in June 2016 than June 2015. This was the third consecutive month of increasingly negative year-over-year CPI estimates. [...]

The Helicopter Has Already Been Tested And, Surprising Nobody But Economists, It Failed Spectacularly

By |2016-07-19T11:42:21-04:00July 19th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Most of what passes for modern monetary policy is nothing more than one assumption piled upon another (and then another, and so on). Taken for granted for so long, rarely are these unproven precepts ever challenged to justify themselves to the minimal standard of internal consistency, let alone prove discrete validity by parts. The latest is “helicopter money”, another sham [...]

End All The Myths; They’re Almost Done Anyway

By |2016-07-06T18:52:45-04:00July 6th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Nominal disposable income in Japan fell 4.4% year-over-year in May 2016. In what can only be a sign of the times being far too familiar in Japanese, real disposable income was thus slightly better at “only” -3.9%. For all the hundreds of trillions in new Japanese bank reserves provided by so many QE’s I have lost count, “real” in Japan [...]

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