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Home“There’s No Sense of Urgency” in Washington
Posted by Larry Doyle on February 10th, 2011 7:35 AM |
For those critical of Ben Bernanke and his massive bubble inducing, asset inflating quantitative easing program, Ben and his Federal Reserve friends have something to say to you. What wisdom do these banking behemoths have to share? Are you sitting down? In so many words, Bernanke and company offered that ‘if you think we’re bad, you should really focus on the clowns who have run up the out of control federal deficit.’
Wow!
Do two wrongs make a right? Does digging one hole get us out of another? Does a series of left hand turns ultimately bring us right back to where we began? Does anybody in Washington have the character to address our real structural problems? Does pointing fingers really get us anywhere? Why are we faced with these questions and problems? A lack of real leadership. (more…)
A ‘Graphic’ View of the U.S. Credit Collapse
Posted by Larry Doyle on December 14th, 2010 6:28 AM |
If a picture paints a thousand words, then the graphs I am highlighting today would encompass many volumes. I thank the regular reader of Sense on Cents who brought them to my attention. Major prop to Barry Ritholtz of The Big Picture who ran this commentary yesterday. Major credit to the writer at the Global Macro Monitor blog.
The Global Macro Monitor blog was started by an independent trader and economist and, in a prior life, was a global macro hedge fund PM/trader, headed emerging market bond trading desks on Wall Street, and an economist/global strategist, beginning his career at the World Bank in the mid 1980’s. His unique and unconventional views are reflected on his website at marcromon.wordpress.com.
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We constructed these charts with data from today’s release of the Federal Reserve’s Flow of Funds. They are both stunning and frightening as they illustrate the cardiac arrest that took place in the credit markets. The collapse in credit issuance/borrowing began in 2008 and would have been net negative without the Federal government. In 2009, for example, the Federal government was 141 percent of total net credit borrowings. (more…)
Federal Reserve: Increasingly Defensive and Admits Structural Issues
Posted by Larry Doyle on November 22nd, 2010 7:55 AM |
The Federal Reserve may be America’s greatest enigma.
The Fed would clearly much prefer to remain opaque in the midst of our current economic turmoil. However, even the ‘all powerful’ Fed is unable to withstand the pressure from those seeking answers and clarity while navigating our economic landscape.
I have often tried to highlight the Fed’s shortcomings and inconsistencies. From the Fed’s overly optimistic economic projections to its unwillingness to openly admit the ongoing structural issues and changes within our economy, I believe the Fed has been playing politics for far too long and well beyond its goals and mandates. (more…)
Ben Davies: Ex Scientia Pecuniae Libertas/Out of Knowledge of Money Comes Freedom
Posted by Larry Doyle on October 25th, 2010 8:47 AM |
I thoroughly appreciate those involved in the markets who also have an equal appreciation for history, languages, literature, and the arts and sciences. Rare is the individual who is able to intertwine their passions and fluent enough to share them with others.
I thank a loyal reader of Sense on Cents who brings us just such an individual, that being Ben Davies, CEO of London-based Hinde Capital. Davies spoke the other day to the Committee for Monetary Research and Education in New York. Although his remarks are extensive, I found them to be quite compelling and truly insightful. I commend Ben for his passion and well rounded perspectives. If you consider yourself a student of the markets, interested in our global economy, or merely a lover of topics well written, you will want to read and savor Ben’s thoughts. I am happy to share them here today.
Remarks by Ben Davies,
CEO, Hinde Capital, London
Fall Dinner Meeting
Committee for Monetary Research and Education
Union League Club, New York
Thursday, October 21, 2010 (more…)
Federal Reserve: Economic Prognosticators or “Just Winging It”?
Posted by Larry Doyle on October 21st, 2010 6:47 AM |
All hail the mighty and powerful Federal Reserve!!
Is that right?
Are we all supposed to bow down and prostrate ourselves at the throne of Ben Bernanke and assume he is ‘all knowing’? The fact is the Federal Reserve has assumed a mantle of being ‘all powerful’ but who in our country is willing to challenge the Federal Reserve? Are we supposed to merely turn over the economic fortunes of our nation and our children’s future to one individual and one institution without aggressively calling them on the carpet? What happened to the calls for increased Fed transparency? What happened to the pressure on the Fed to justify their actions? The silence is deafening.
Those with a degree of sense on cents understand and appreciate the following: (more…)
What Is a ‘Walking Pneumonia’ Economy?
Posted by Larry Doyle on September 22nd, 2010 5:12 AM |
Almost three full years from the official start of The Great Recession and fifteen months from its end, and our economy continues to limp along and languish amidst the weight of ongoing — even unrecognized — debts. Can we take a double dose of Nyquil, chase it with some Irish Mist, and hope we wake up feeling better in the morning? If it were only that easy.
The simple fact is our economy is battling a serious bout of seemingly terminal ‘walking pneumonia.’ How might we diagnose that malady? All we need to do is read yesterday’s Release from the Federal Reserve:
Information received since the Federal Open Market Committee met in August indicates that the pace of recovery in output and employment has slowed in recent months. (more…)
Ben Bernanke Is Running out of Ammo
Posted by Larry Doyle on August 10th, 2010 4:24 PM |
What if you were playing a round of golf with a set number of balls and were restricted by how often you might be able to use specific clubs? Might feel somewhat overwhelmed, no? What if you faced this predicament when you realized that you were still many holes away from the clubhouse? Might feel increasingly overwhelmed, no? Why do I have this mental image of Ben Bernanke and his fellow Fed governors standing out on the farthest point of a golf course wondering just how the heck they are going to finish their round–that is, navigate the economy–and get back to the clubhouse.
Let’s quickly review the Federal Reserve’s statement released today. In the process, let’s take the pulse of the economy and the Fed’s ability to impact it. From the Federal Reserve’s website, (more…)
Insiders’ Views on Financial Regulatory Reform
Posted by Larry Doyle on July 16th, 2010 1:02 PM |
What do industry insiders think of the Financial Regulatory Reform package coming out of Washington? The Wall Street Journal provides a fascinating review in Fed Gets More Power, Responsibility. Let’s navigate.
1. Henry Paulson
Former Treasury secretary
Grade: Incomplete
The systemic-risk council, tougher Fed regulation over top financial institutions and new authority to wind down failing institutions are essential steps forward. Improving derivatives rules is a real positive. But the bill doesn’t tackle Fannie and Freddie, and there are too many unknowns as to how the regulations will be applied.
Will it help prevent another crisis? (more…)
Fed Minutes Flashing Caution
Posted by Larry Doyle on July 14th, 2010 3:24 PM |
The Federal Reserve just released the minutes from a June 22-23 meeting and an early May conference call. The Fed as an institution is always careful in its delivery, but in reading through their tea leaves this afternoon I sense concern on the Fed’s part of a real slowing, if not a double dip, in our economy. A summary of the Fed minutes includes the following highlights:
FOMC participants’ forecasts for economic activity and inflation suggested that they expected the recovery to continue and inflation to remain subdued, but with, on balance, slightly weaker real activity and a bit lower inflation than in the projections they made in conjunction with the April 2010 FOMC meeting. (more…)
Ambulance Chasing on Wall Street
Posted by Larry Doyle on April 12th, 2010 10:58 AM |
What is driving our markets higher? A rebound in earnings along with a rebound in the economy, correct? Well, let’s take a quick look at corporate earnings.
Thanks to our Sense on Cents Hall of Famer and resident Economic All-Star David Rosenberg, we learn this morning that:
Financial sector profits have accounted for 85% of the overall increase in corporate earnings.
When I read this, I immediately think of the market akin to that gutless driver who jumps behind an ambulance as it screams down the street. Who is in that ambulance? Main Street. Who is in that car getting the ‘free ride’? Wall Street. (more…)
