Fed

David Stockman Alienates Both Ends of The Political Spectrum

David Stockman wrote an intriguing article which appeared in the NY Times. That it appeared in the Times is noteworthy itself, for it contradicts so many liberal shibboleths the paper has supported (promoted) for many years. Its appearance is less likely to reflect the first steps to Damascus and may be a sign of financial desperation where the need for [...]

Hope and Crosby Never Went to Zimbabwe

Bob Hope and Bing Crosby made a series of movies together entitled “Road to …”. The first, made in 1940, was “The Road to Singapore.” The series was successful and included destinations such as Bali, Zanzibar, Rio, and Morocco. In all, I believe seven different movies were made over about a twelve year period ending in the early 1950s. Were [...]

Federal Reserve Policy Ensures Inflation

The Federal Reserve is the enabler of Federal government’s profligacy. It plays this role by monetizing the debt, i.e., purchasing Treasury bonds that otherwise could not be sold, or at least not sold for the artificially low interest rates that currently prevail. Since the financial crisis, the Fed’s balance sheet has risen from $800 Billion to over $3 Trillion! Government [...]

Economics Is A Subset Of Common Sense and Logic

I argue that the economy won’t improve from the standpoint of economics. Many do not (justifiably) trust economic analysis or reasoning. They feel more comfortable with what is sometimes called “good old common sense.” Along those lines, a reader sent in a comment that provides a common sense conclusion identical to the less common (and perhaps less sense) economic analysis. [...]

Why The Fed Makes Matters Worse

For those who don't understand the damage being done by the Federal Reserve, Jerry O'Driscoll provides a short Austrian description why. Mr. O'Driscoll penned this in response to a piece written by John Taylor in the WSJ. Easy Money, Slow Growth January 29, 2013 by Jerry O’Driscoll In today’s Wall Street Journal, John Taylor explains why the U.S. recovery has been tepid while money [...]

A Madoff Market

Fantasy is fun while it lasts. But reality eventually intercedes and interferes with even the mildest fantasy. Those way out in fantasy land are especially vulnerable to disappointment. So it is for those betting on the stock market and an economic recovery.   More Bad Information There is no economic recovery despite all the media and Washington bravado. Just another sign is [...]

Economist as Monkey With Typewriter

Ludwig von Mises, Frederich Hayek and other Austrians believed in the foolishness and errors inherent in attempting to macromanage an economy. None, however, expressed their objections quite as colorfully as Seth Klarman: QOTD: "Modern economies are too complex to be reliably modeled; their connections and correlations are loose and imprecise, the second- and third-order effects largely immeasurable, the fickle vagaries [...]

The Non-Recovery In Advance of A Depression

For anyone who believes that there has been an economic recovery, go buy the Brooklyn Bridge. I’m sure there are thousands who would be willing to sell it to you. There will be no recovery until the economy crashes and rebuilds from the ashes. There is too much debt outstanding can never be repaid and will not be serviced. Governments [...]

The Psychotic Fed

Whether it is growing older and less patient or whether the world is actually becoming more stupid is an issue I wrestle with periodically. I suspect it is a bit of both. Here is an example of the nonsense that increasingly riles me. This snippet comes from a Reuters report available at CNBC: Dramatic action by central banks to counter a [...]

The Federal Reserve: Fraud That Passes For Economic Policy

The Federal Reserve has spoken, again. And again they have said nothing worth hearing, but done so in serious language and tone. Does anyone consider this quarterly spectacle worthwhile anymore? Every quarter, like some pagan ritual, this scene repeats. Market worshipers treat it as some profound economic emanation that has the potential to re-direct the economic fate of the nation. [...]

Fed: Recession Certain?

How convenient is it that the following information based on data from the Federal Reserve was not made public before the election: What’s interesting about this index is the current reading. At 20%, the index is at a level that has ALWAYS been followed by a recession. As you can see below, the index has never approached 20% without a subsequent recession. All [...]

The Government Is Helpless, Bankrupt and Immoral.

Finally, some people are coming out and questioning the actions of the Federal Reserve. Here is a comment from David Einhorn (my emboldening): Sometimes you have to look at what is the base assumption. because sometimes you have a groupthink around the base assumption and everybody agrees to the same thing and acts reflexively and doesn’t really challenge what is [...]