The Topsy-Turvy Economy

The financial markets are hooked on easy money, low interest rates, and growth via debt issuance. Yet, it has become obvious to some market players, economists, and maybe even the Federal Reserve’s Federal Open Market Committee (the rate setting cabal), that current monetary policy is now hurting, not helping, the economy. Of course, monetary historians […]

Painted into a Corner A Review of the Economic Environment Entering Q4/16

While Q3 started out much better than the very slow economy of the first half of 2016, August’s data was very weak although there was some bounce in September.  So, we enter Q4 with some serious concerns about the fragile state of the economy, where an outside shock or policy mistake could have serious consequences.  […]

Reconciling a 1-percent economy with record market highs

The recovery from the Great Recession has been the most sluggish in post-WWII economic history.  This is vividly displayed in the nation’s recent GDP report.    The Commerce Department estimated that the economy grew at a snail’s pace over the last 3 quarters: 0.9% in Q4, 0.8% in Q1, and 1.2% in Q2.  Yet, all of […]

Why Helicopter Money and Unconventional Monetary Policies Won’t Help the Economy

The equity markets continue to flirt with record highs while the yields on fixed income instruments are at or near all-time historic lows.  Generally, those two market movements are not compatible.  Everyone feels a high level of anxiety about the economic future.  Ben Bernanke visited the Bank of Japan in early July to help them […]

Quarterly Economic Outlook: Q3/2016

The “Brexit” caused market swoon on Wall Street turned out to be a nasty 5.3% two day dive (S&P 500) that was all but reversed in the next 4 trading sessions.  The reason was clear early on – despite forecasts of immediate worldwide economic doom and gloom, the non-binding referendum was mostly a political statement […]

Recognition shock

The wave of anti-establishment, anti-globalization sentiment, evident in the U.S. primary election cycle, manifest itself bigtime in the U.K. with its vote on Thursday, June 23rd, to exit the European Union (E.U.).  Wall Street hates uncertainty; that is why it loves the status quo.  In the days leading up to this historic British decision, the […]