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HomeFederal Reserve Quandary: Stagflation
Posted by Larry Doyle on June 18th, 2014 9:44 AM |
The Federal Reserve will wrap up its regularly scheduled meeting and release its highly anticipated statement this afternoon at 2pm. The markets always eagerly await this statement so as to read the tea leaves and see what they say about our economy and the impact on interest rates.
Do we really need to wait for 2pm, though, to determine what is really going on in our economy? I think not. What do we know? Plenty, although the financial media, government officials, and the bankers themselves are not always fully forthcoming in promoting the truth. Let’s navigate. (more…)
Federal Reserve Minutes Reveal “Ignorance”
Posted by Larry Doyle on February 24th, 2014 6:36 AM |
I know of few descriptive terms more harsh than classifying an individual or organization as being ignorant.
Yet that is exactly how The New York Times labels the most powerful institution in the world, that being the Federal Reserve, after reviewing the recently released minutes from the Fed’s meetings back in 2008.
The hundreds of pages of transcripts, based on recordings made at the time, reveal the ignorance of Fed officials about economic conditions during the climactic months of the financial crisis.
Serving as a Fed official is not a part time role akin to committing one’s time for a local civic organization. In fact, perhaps not fully appreciated by many in our nation, the Federal Reserve not only serves as our nation’s monetary authority but also as a primary regulator for our banking system. (more…)
5 Years Later, ‘TBTF’ Elephant In America Remains
Posted by Larry Doyle on February 21st, 2014 12:13 PM |
A slew of minutes and commentary related to Federal Reserve meetings held during the crisis of 2008 are just now being released.
While many of the minutes provide a riveting look at the topics on the table at that point in time, I found the following highlighted in a synopsis at The Street.com to be particularly meaningful. (more…)
Janet Yellen “Will Spot Asset Bubbles Before They Burst.” Can She Also Walk on Water and Cure Aging?
Posted by Larry Doyle on February 4th, 2014 9:42 AM |
Do you ever get incoming e-mails that just leave you scratching your head and thinking, “Are you kidding me?”
I am going to guess that we all do and most would typically delete them in short order. I almost did that late yesterday when I saw an incoming message informing me that Janet Yellen, the new head of the Federal Reserve, possessed powers and vision that some might define as otherworldly. Let’s navigate as the Cornell University Media Relations Office released the following:
Robert C. Hockett, former Resident Consultant for the Federal Reserve Board, international finance expert and professor of Law at Cornell University, discusses how Janet Yellen will usher in a new era of a proactive Fed. (more…)
What’s Going On: Market Pullback, Pump ‘n Dump?
Posted by Larry Doyle on January 30th, 2014 7:02 AM |
The consensus opinion by most market strategists coming into the year was that our equity markets would follow up the 25-30% gains of 2013 with another 8-10% gain this year.
The markets will have to experience a hellacious rally in the next two trading days or make an exception to an age old rule that January’s price action sets the direction for the year as a whole.
So what is going on with the markets? Are they simply experiencing a long overdue pullback? No doubt about that. Aside from a mild pullback last August and September of approximately 3-4%, the S&P 500 Index went straight up for the next 3 months to the tune of 12% to end the year with a 30% gain.
The 4% loss year to date certainly qualifies as a pullback but comes nowhere close to qualifying as a correction which market technicians define as a 10% decline. The S&P 500 would have to retrace another 110 points on top of the ~75 points it has lost year to date to meet that definition. (more…)
Judge Rakoff: Why Have No High Level Executives Been Prosecuted In Connection With The Financial Crisis?
Posted by Larry Doyle on November 14th, 2013 11:15 AM |
None other than Judge Jed Rakoff, who has heard many of the major financial suits brought over the course of the last few years, spoke the other day to the New York City Bar Association regarding the question so many in our nation still ask, “Why have no high level executives been prosecuted in connection with the financial crisis?”
In what might have been a fabulous foreword to my upcoming book, Rakoff skillfully delivers what I believe is an incredibly excoriating indictment of those within the Department of Justice,the SEC, and elsewhere. (more…)
“Greatest Wall Street Backdoor Bailout of All Time”: Sense on Cents Instant Classic
Posted by Larry Doyle on November 12th, 2013 10:01 AM |
It is not often that, in the midst of my daily morning reads, my jaw drops and I am left aghast by a writer’s hard hitting delivery. While many an editorial and commentary dive into topics that I appreciate and find riveting, I do not often find a writer from inside the arena who freely and openly speaks his/her mind.
This morning I had just such a pleasure.
While America and the world have been force-fed the notion that the Federal Reserve’s quantitative easing programs have been the magic elixir nursing our economy back to health, Andrew Huszar has a decidedly different take.
Who is Huszar? Only a former Fed official responsible for executing a large part of the Fed’s bond buying. Currently a senior fellow at Rutgers Business School, Huszar gains immediate induction into the Sense on Cents Hall of Fame as he pulls no punches in delivering a knockout in this morning’s WSJ. He begins with an apology. It only gets better from there.
I can only say: I’m sorry, America. (more…)
NY Fed’s Dudley Indicts Banks’ “Lack of Respect for Law, Regulation, Public Trust”
Posted by Larry Doyle on November 8th, 2013 7:33 AM |
Wow, just wow.
It is not often if ever that a major Federal Reserve governor will turn on his own banking bedmates, but we witnessed just that yesterday in an address delivered by New York Fed governor William Dudley at the Global Economic Policy Forum in New York City.
Dudley’s talk was intended to provide an outline for ending the ongoing ‘too big to fail’ reality of our major banking institutions.
Hey, wait a second. I thought Dodd-Frank ended too big to fail, didn’t it? President Obama told us so. Well, he also told us that if we liked our health care plan and our doctors and our hospitals that we could keep them . . . and we see where that got us. Back to Dudley’s talk in which he let slip a statement that should unnerve Wall Street and Washington to their very core. (more…)
Goldman’s Call As to Future Federal Reserve Policy
Posted by Larry Doyle on November 7th, 2013 9:06 AM |
What might be the next move by the all powerful Federal Reserve as it goes about trying to nurse our economy back to health?
Mike O’ Rourke, chief market strategist at Jones Trading recently highlighted that the folks at Goldman Sachs believe Fed policy may be set to shift. I mean, who on Wall Street might have the ear of the Fed more than the folks at Goldman, right? Ok, ok, enough of the sarcasm.
Let’s navigate as O’ Rourke interprets Goldman’s reading of the Fed’s tarot cards regarding future monetary policy. (more…)
Inflation: The Real Deal Not Uncle Sam’s Charade
Posted by Larry Doyle on October 11th, 2013 7:14 AM |
One of the main arguments made by the Federal Reserve for continuing to run the printing press via its quantitative easing program is the fact that the reported rate of inflation is running below its long term target of 2%.
Based on that reality (real or perceived?), Ben Bernanke has been very comfortable opening the Fed’s QE-hydrant and letting the dollars flow despite the fact that the Fed’s liquidity does not appear to be gaining meaningful traction in the system and actually stimulating true economic growth.
Some might say that things would be far worse without Ben’s liquidity, but first let’s take a harder look at that reported rate of inflation and focus on that qualifier “reported.” To do so, I welcome navigating into a report recently produced by Deutsche Asset & Wealth Management entitled Is The Inflation Threat Hype — or Real? (I thank the regular reader who highlighted this report.) (more…)
