Jon Hilsenrath, the Fed mouthpiece at the Wall Street Journal is out with a piece this morning describing how Mr. Bernanke built a consensus on the FOMC to start another round of money printing. Hilsenrath is Bernanke’s go to man when he wants to pass information to investors between policy meetings. What was the purpose of this piece? Looks like Dr. B. might not be happy with the stock market response to his QE-Infinity program. As of this morning, the S&P 500 is only a few basis points above its level before the Fed unveiled the program. So Mr. Bernanke is back to jawboning to prop up … [Read more...]
Archives for September 2012
What We’re Reading 9-28-12
Euro Zone Misery to Last for Decade: Ernst & Young, Catherine Boyle, CNBC QE3 will not fix America's problems, warns Paul Volcker, Helia Ebrahimi, The Telegraph A Capital Gains Primer, Review & Outlook, Wall Street Journal ETFs Funds Total Reaches $1.215 Trillion in August, ICI … [Read more...]
VIDEO: Re-Made in America – 5M Manufacturing Jobs Are Coming Back, Report Says
While the U.S. unemployment rate hangs high above 8%, manufacturing is one sector of the American economy that has seen substantial jobs growth over the last few years. Source: Yahoo Finance … [Read more...]
Warning Sign! Don’t Get Caught Off Guard
As we head into the final stretch for the elections it sure is convenient to have QE 3 on your side if you’re the incumbent. Bernanke is protecting his own employment by dressing the bride for the big day. You can see his handy work by the advance in the Dow Jones Industrial Average. But he’s not able to mask the whole truth. Take a look at the dismal relative performance of the Dow Jones Transports. The goods aren’t moving. That’s a bad sign. … [Read more...]
The Peril of a Monetary Politburo
We’ve written plenty about the Fed and QE-infinity on this site over recent days, so we had planned to lay things to rest for a while, but then Minnesota Federal Reserve Bank President Narayana Kocherlakota came out with one of the most perilous ideas yet from the Fed. Kocherlakota was formerly viewed as an inflation hawk. In fact in April of this year, during a speech to the Southern Minnesota Initiative Foundation, Mr. K said “My own belief is that we will need to initiate our somewhat lengthy exit strategy sometime in the next six to nine months or so, and that conditions will warrant … [Read more...]
What We’re Reading 9-21-12
Beware the costs and psychology of QE3, Gillian Tett, Financial Times China's Slowdown May Be Worse Than Official Data Suggest, Koech and Wang, Federal Reserve Bank of Dallas Suitcase packed: France’s richest man applies to become a Belgian, Bernard Arnault, The Economist Can Trade Links Transmit a European Crisis?, Auerbach and Peralta-Alva, Federal Reserve Bank of St. Louis Sweden 22-U.S. 35, Review & Outlook, Wall Street Journal … [Read more...]
Bernanke: To Infinity and Beyond!
In case you missed it, last week Ben Bernanke rolled out another misguided money printing campaign. This isn’t QE3, it is QE-infinity. The Bernank opened the monetary spigot and isn’t shutting it off until he sees substantial improvement in the labor market, inflation and speculative bubbles be damned. And if the jobs picture doesn’t improve, the Fed plans to double down on its strategy. How will we know if the Fed’s actions cause the labor market to improve? We won’t and that is by design. The Fed has rigged the game. No matter the limited efficacy of quantitative easing, the press (and … [Read more...]
VIDEO: Fed’s Fisher- Fed Policy Costs More Than Benefits
Sept. 19 (Bloomberg) -- Federal Reserve Bank of Dallas President Richard Fisher talks about Fed monetary policy and the possible impact on the U.S. economy. Fisher also discusses his opposition to the central bank's third round of quantitative easing and partisanship in Washington. He speaks with Trish Regan and Adam Johnson on Bloomberg Television's "Street Smart." (Source: Bloomberg) … [Read more...]
Fed Turns Savers into Sacrificial Lambs
How is Federal Reserve Chairman Ben Bernanke helping your bank account? It’s not pretty, I know. Here we have a guy who is from the Ivy halls of academia controlling the value of the dollars you earned busting your butt in the private sector. The money you saved rather than spent on lavish vacations or new cars is rotting away thanks to him. Just look at how gold prices have moved up. Gold is priced in dollars per ounce, so when it goes up there is a relative devaluation of the dollar. In other words, it’s inflationary. You know darn well your dollar is worth less and less. You fill up your … [Read more...]
Empire State and Wall Street Disagree
As we outlined last week, economic fundamentals are not in-step with market movements. While the prices of stocks have been moving skyward in reaction to worldwide monetary and fiscal stimulus measures, the real economy takes on an ever bleaker look. By way of evidence, we point to the Empire State Manufacturing Survey released this morning. For the second consecutive month the index has marched deeper into negative territory. The September survey indicated that the General Business Conditions index fell to -10.4, an indication of a worsening business environment for manufacturers in the … [Read more...]