Some Risk Assets Getting Frothy While the Amazing Treasury Bond Bull Market Rolls On Under Most Radar Screens

I’m not a downer all the time.  I try to go where the data leads, in a risk-averse manner.  If it keeps pointing in the same direction, so be it.

When I first began writing on this website in August 2010, I argued against the prevailing gloom.  Recovery Summer as predicted by the advocates of Keynesian stimulus had [...]


The Greatest Trick

“I believe in an America where millions of Americans believe in an America that’s the America millions of Americans believe in. That’s the America I love.”

-     US Presidential Candidate Mitt Romney.

 Never try to teach a pig to sing, advised Robert Heinlein. It wastes your time and it [...]


Ham and Yams and QE

Ben and I are stranded on an island, Robinson Crusoe-like and I, on my east side of the island, have been planting yams, collecting coconuts, and doing a little fishing. Ben decides to hunt on his west side and offers to trade a boar hindquarter for some yams. We negotiate and make a deal: 20 yams [...]


The Fed Panicked

Here is the Fed Open Market Committee’s announcement of November 25, 2008 announcing the implementation of QE1, a $600 billion bond purchase program:

This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial [...]


The Fed: We’ll Print As Much As It Takes

I’ll have more on this shortly, but the Fed has announced an open-ended bond purchase program (QE3): “… until such improvement is achieved … “

Here is their statement: 

Release Date: September 13, 2012

    For immediate release

       Information received since the Federal Open Market Committee met in August suggests that economic activity has [...]


FOMC Minutes: QE3 Is “Fairly Soon”

Many participants expected that a [new large-scale asset purchase program] could provide additional support for the economic recovery both by putting downward pressure on longer-term interest rates and by contributing to easier financial conditions more broadly. In addition, some participants noted that a new program might boost business and consumer confidence and reinforce the Committee’s [...]


QE3′s Looming Failure Means Ben’s Days Are Numbered

July 26, 2012

The above-the-fold headline of  [last week's] Wall Street Journal, “Fed Moves Closer to Action”, signals an impossibly deluded Federal Reserve utterly blind to the damage its machinations are bringing to the U.S. and global economy.  Though the Fed’s policies are the single greatest barrier to economic growth, Ben Bernanke, its walking, talking contarian indicator [...]


What Germany’s Biggest Bank Is Thinking

More research notes from Deutsche Bank’s DB Research on Spain, the Eurozone crisis, and QE for the U.S. If you are interested, here is a note on the growing world economic decline as well. It is worth listening to what they think whether we agree or not.   Perhaps they should be thinking more about [...]


The Dreaded “D” Word

Prices are falling. The Fed will interpret this as “deflation” whereas it is more related to lack of demand. They will interpret falling prices as “deflation” and view this as dangerous to the economy. Here is a summary of the PPI and Ex-Im prices indices. Tomorrow (Thursday) the CPI will come [...]


Unnatural Disasters: Jobs, Wages, And Savings

The employment numbers that came out today (Friday) were very bad and caught most economists and analysts by surprise. Nothing the Fed has done has worked. Once again the ranks of the unemployed grow, wages flatten out, manufacturing weakens, GDP declines, and savings are spent to maintain lifestyles. The U.S. and much of the rest [...]


GDP Q1 2012 Revised Down To 1.88%

Lakewood, Colorado

In their second estimate of the first quarter 2012 GDP, the Bureau of Economic Analysis (BEA) lowered the annualized rate of U.S. domestic economic growth to 1.88% (down about a third of a percent from the 2.20% previously reported), and now more than a percent below the growth rate for the fourth quarter [...]