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HomeFederal Reserve Misses The Target
Posted by Larry Doyle on December 13th, 2012 8:21 AM |
Stand back.
A marksman with a powerful weapon not properly focused on an appropriate target is capable of wreaking real havoc.
Who is the marksman? Federal Reserve chair Ben Bernanke. What is his powerful weapon? Monetary policy. What is the appropriate target? The level of employment in our nation. What might be the havoc? The list is too long but let’s start with a breakdown in the relationship between monetary policy and inflation and work our way to civil unrest. Havoc does not typically connote a well defined set of outcomes.
Am I being overly alarmist? I think not given the size of Bernanke’s weapon and how wildly off target he really is in the message he sent the markets just yesterday. What did he say? (more…)
Federal Reserve Issues a Blank Check
Posted by Larry Doyle on September 14th, 2012 7:37 AM |
Well, I gather we will not be discussing the need for a 4th round of quantitative easing down the road.
Given that the Federal Reserve’s announcement yesterday put neither a dollar amount nor an end date on its pronouncement to purchase $40 billion in MBS (mortgage-backed securities) per month as needed, the great and wondrous Fed wizard Ben Bernanke effectively pre-signed a series of blank checks.
Thoughts and questions crossing my mind this morning include: (more…)
Will the Federal Reserve ‘Go Nuclear?’
Posted by Larry Doyle on June 8th, 2012 9:32 AM |
Many market participants are hoping and praying that Ben Bernanke will save the day by implementing another round of quantitative easing. Having become addicted to the monetary ‘heroin’ provided by our central bank, those on Wall Street would love another ‘hit.’
Is this the right approach to curing what ails our nation’s economy? Of course not. I stated as much in a recent interview:
“The problems with the current Fed policy and fiscal programs implemented by this administration are that the MASSIVE structural issues eroding the foundation of our economy and society are not being confronted.”
So what might the Fed do? With the Fed’s ‘dope’ packing less and less of a punch, would they ‘go nuclear’? What’s that you say? (more…)
R. Wenzel Further Exposes the Federal Reserve
Posted by Larry Doyle on May 7th, 2012 4:49 AM |
“I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs.” — Thomas Jefferson, U.S. President.
A week or so ago thanks to a regular reader, I highlighted an amazing speech given inside the New York Federal Reserve by Robert Wenzel, editor and publisher of the Economic Policy Journal. Wenzel took the Fed to the cleaners in his remarks which I welcomed highlighting in writing R. Wenzel: Federal Reserve An Unmitigated Failure.
Wenzel is certainly one of very few who have ventured into the inner sanctum of the Fed, laid it to waste, and then been able to talk about it. What more might this financial Indiana Jones have to say about the all powerful Federal Reserve? (more…)
R. Wenzel: Federal Reserve An Unmitigated FAILURE
Posted by Larry Doyle on April 28th, 2012 9:17 AM |
This commentary is a little lengthy but a great and absolute MUST READ!! LD
Who really runs America?
The media may actively and aggressively debate the pandering provided by those on both ends of the political spectrum. But to whom do these pols really answer? The American public? I do not think so.
The Washington establishment strikes me as little more than puppets played by the one controlling the money. Who might that be? The all powerful and, all assertions to the contrary, perpetually opaque Federal Reserve.
Let’s navigate deep into the chambers of the New York Federal Reserve. (more…)
Central Bankers’ Favorite Games: We’re Being Played
Posted by Larry Doyle on February 21st, 2012 10:30 AM |
War. Street hockey. Hide the belt. Kick the can. Flipping cards.
The games of my youth growing up in my neighborhood section of Boston provide very fond memories. The best part of these games was the simple fact that everybody was included, the rules were clear cut, and the older kids looked out for the little guys.
In a manner of speaking, the central bankers of today are similarly engaged in a few different games. What are the games being played on both sides of the Atlantic? Kick the can and charades. Regrettably, the central bankers are not playing by the rules as we defined them.
Quantitative Easing: To Infinity and Beyond?
Posted by Larry Doyle on January 29th, 2012 12:02 PM |
What does the Federal Reserve know that we don’t?
I mean, why would the Federal Reserve commit to keeping prevailing interest rates at next to zero through the end of 2014 if they were not aware of just how weak our underlying economy truly is?
Bernanke and team know our domestic economy and the global economy at large remain in need of significant and steady oxygen support. (more…)
Fed’s White Paper on Housing: Uncle Sam a Landlord? Obama’s Plans for Re-Election?
Posted by Larry Doyle on January 5th, 2012 9:58 PM |
Housing and labor remain the cornerstones of our economy. In fact, the health of our labor market follows that of housing just like night follows day.
The near term prospects for both housing and labor remain decidedly challenging. The success of assorted federal programs to support housing so far have obviously been underwhelming.
That said, there are rumblings emanating from Washington that the Obama administration may end run Congress while unilaterally launching a massive program to support housing via Freddie/Fannie orchestrated refinancings.
Will this program be the ‘rabbit’ which Obama and team pull to prop the economy and their re-election chances in 2012? (more…)
Which Bank Is Leveraged 104:1?
Posted by Larry Doyle on July 14th, 2011 9:02 AM |
The road to hell is paved with positive carry.
Those in financial circles likely know that the above quote is a colloquialism used to highlight that excessive leverage can generate cash flow, that is the positive carry, but that ultimately unless properly and prudently unwound the leverage itself can lead to financial armageddon. We have witnessed this scenario time and again.
Wall Street specifically and our economy at large are continuing to lick their wounds and attempting to recapitalize from the “road to hell” we experienced beginning in 2008. While the financial system as a whole deleverages, Ben Bernanke and his minions within the Federal Reserve have leveraged up in an attempt to ‘ease the pain’. Just yesterday, Fed officials highlighted that they would continue to leverage up if need be.
In the process, I believe they will simply be moving further down that road to you know where. (more…)
Why Might The Fed’s Party Be Over?
Posted by Larry Doyle on June 20th, 2011 8:07 AM |
Over the last few years I have highlighted the fact that the deflationary impact of declining wages and home values gave cover to the Federal Reserve for maintaining an excessively easy monetary policy and pumping up asset prices via quantitative easing. That party would now seem to be over. Why?
There is no doubt that Fed chair Bernanke’s easy money has played an integral role in the inflation we are experiencing at the pump, in the supermarket, and across a number of other commodities.
As we continue to navigate the U.S. economic landscape circa 2011 and beyond, the ongoing decline in home values in many regions of our nation now would seem to be setting the table for an inflationary spike in housing costs. How so? What is going on here? (more…)
