Former Vice Chairman of the Federal Reserve board joined the chorus of Wall Street cheerleaders saying the Fed can afford to be patient with raising interest rates earlier this week. His rationale? Inflation as measured by the consumer price index or the Fed’s favored measure is very low: The so-called hawks, who have been calling […]
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You’ve heard me say this before (but not this strongly) that the monetary machinations of the global central banks (led by the Fed, and buttressed by the European Central Bank and the Bank of Japan) are flooding the world with liquidity and causing all sorts of malinvestment. In the video above, Ed Yardeni agrees, perhaps […]
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Earlier in the week I criticized the results of Dodd-Frank, because it has miserably failed at its ostensible purpose of preventing future “too big too fail” incidents. Indeed, not only did it not succeed in this–in the sense of reducing the number of potential risks–it has significantly exacerbated it as the banks are increasingly consolidating […]
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A few weeks before the election, I speculated that a potential election threat to the Democrats was a significant correction to the stock market. The main reason for the speculation was the impending cessation of QE3, the Fed’s monetary stimulus program. Pretty much all market observers believe the Fed’s stimulus has at least contributed to […]
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The Fed giveth, and the Fed taketh away? Is a bursting stock market bubble going to be the October Surprise?
11 Oct 2014
The stock market swung wildly this past week, with the final result the S&P 500 down 3.1%, and the Nasdaq 100 down 3.9%. Everybody knows a major reason why: The Federal Reserve is winding down its aggressive monetary stimulus, and now the question is will they increase interest rates, and if so, how soon? QE3 is […]
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John Cochrane is a tremendously talented economist and professor of finance @ Chicago’s Booth School of Business. He’s probably forgotten more arcane financial reasoning than I know; but that doesn’t stop us from critically examining his thinking. In today’s WSJ, Mr. Cochrane cheers the Fed’s balance sheet expansion as a good thing for the economy. […]
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We’ve had tons of economic news worth highlighting over the last month, but Christmas offered much more fun than writing blog posts. So here is a quick review of several economic issues that will continue to be issues in 2014. First up is the Senate confirmed Janet Yellen as the first female Federal Reserve Chair […]
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Common Sense Economics
05 Nov 2013
Alan Greenspan was being interviewed about his new book The Map and the Territory in Time magazine recently and responded to the question, “Knowing what you know now, what would you have done differently during your time as chairman of the Fed?” His response was in part, “I always knew debt was important. If I […]
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Yesterday Barack Obama nominated Janet Yellen to become Chairwoman of the Board of Governors of the Federal Reserve. Borrowing from Stanly Kubrick’s classic film Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb and with apologies to Slim Pickens, this is how I perceive Yellen’s nomination (and subsequent Senate confirmation) will impact […]
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You say “Really? Are you just an anti-Fed nut case?” Well, I’m certainly anti-Fed, and my wife won’t confirm or deny #2. But let me make my case. As economist Russ Roberts likes to say, economists often tell “stories” that we think reflect reality. These stories are backed by a particular theory and often have […]
Bert Wheeler
Jeff Haymond
Marc Clauson
Mark Caleb Smith
Tom Mach