Tag Archives | Ben Bernanke

“Reservations are no longer necessary at many high-end restaurants”

Think back a moment to September 16 2008.  Newly released transcripts analysed by the Wall Street Journal and Financial Times reveal for the first time what was really going on that day at the world’s most important central bank. Lehman Bros, one of Wall Street’s largest investment banks, had just gone bust.  Merrill Lynch, another giant, had […]

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US markets see Happy Days again

New Year optimism over the economic outlook is breaking out all over the USA.   Weak employment numbers for December were ignored, as were weak data on housing markets.  Whilst prices for benzene, the blog’s favourite sentiment indicator, not only jumped to a record high but dragged European levels to an all-time record as well. Happy Days are clearly […]

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Deflation far more likely than inflation

The last in the blog’s series on things that we think we know, but may not, looks at the prospects for inflation.  A new survey this week of the world’s wealthiest individuals summed up the consensus view: “If there are two factors that make the rich stand out, on this survey, it is their fear […]

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Germany’s Bundesbank warns on the growth outlook

Last week the blog looked back at the performance of its 3 benchmark products since the start of 2009. This week it looks at what has happened to its 3 financial market products: • Before 2009, there was normally an inverse correlation between oil/naphtha prices and the US S&P 500 stock market index. Higher oil […]

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‘Waiting for Bernanke’ is hottest show on Wall Street

‘Waiting for Godot’, the great play by Irish writer and Nobel Literature Prizewinner, Samuel Beckett, deals with the meaning of existence. Written just after the Second World War, its two characters wait endlessly for the arrival of Godot. US financial markets are currently staging their own version of the play: • They no longer see […]

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US Fed policy may be going Back to the Future

Today’s 419 point fall on the Dow Jones Average, and $6/bbl fall in WTI crude oil prices, may not be just another example of the wild volatility that has come to seem normal in financial markets. It may also mark the end of an era. Since 1994, the US Federal Reserve has used all its […]

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Speculators begin to leave crude oil markets

Speculators, assisted by the US Federal Reserve, have driven crude oil prices to unsustainable levels over the past year. Now, the Fed is withdrawing the liquidity that has financed this rise. The above chart from Petromatrix shows the surge in crude oil speculation on the Chicago futures market since August. The light blue line shows […]

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US Fed’s QE2 programme hits consumer confidence, raises mortgage rates

Last November, the Chairman of the US Federal Reserve justified his $600bn QE2 programme to boost financial markets by claiming “higher stock prices will boost consumer wealth and help increase confidence“, whilst also leading to “lower mortgage rates“. And stock prices have indeed risen. As the above chart from PetroMatrix shows, there has been an […]

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Central banks warn on likely growth rates

Coincidentally, both the US Federal Reserve and the Bank of England yesterday signalled the probable end of the ‘the recession’ yesterday. But as the blog noted last month, statistics don’t tell the whole story. The issue is that economists usually define recession as simply being 2 or more quarters of negative growth. Automatically, therefore, any […]

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GDP’s “statistical recovery”

The blog is very interested to see the different outlooks being proposed by central bank heads. US Fed Chairman Ben Bernanke claimed Friday that the financial crisis was due to “panic”, rather than fundamental problems such as reckless lending. As a result, with the “panic” over, he now saw the potential for securing “a sustained […]

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