Tag Archives | US Federal Reserve

US incomes decline as job participation rate drops

There are two ways to approach last Friday’s monthly release of the US jobs figures: One is the Wall Street way, which is to bet on whether the numbers will be bad enough to persuade the Federal Reserve to boost its money printing operations The other is to look for clues as to what is […]

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“Bad news barrage sinks New Year consensus”

Markets stopped operating in their true role of providing price discovery sometime ago.  Instead, they became dominated by the central banks, determined to prove their theory that increased asset values can stimulate sustained economic recovery. They, of course, have the firepower to bend markets to their will.  Nobody else could have spent $16tn in this manner […]

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You can’t print babies to create new demand

What would you have done 5 years ago, in 2009, if you had been given $16tn to restore global economic growth? Would you have boosted spending in areas such as education, health and infrastructure in the belief this would create a sustained boost to economic capability?  Would you have cut taxes in order to encourage entrepreneurs to develop new businesses and promote […]

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“2 Steps and Then a Stumble”, as the Fed starts to taper

The most important event of the past week, and possibly of the whole year, was Wednesday’s decision by the US Federal Reserve to finally “taper” its vast stimulus effort – now worth $4tn, nearly 25% of US GDP. The timing was no great surprise.  The blog was convinced Ben Bernanke would want to start the process […]

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The trend is your friend, until it isn’t

Investing in today’s financial markets is relatively easy.  You simply have to believe that governments in the US, Japan and Europe will continue to provide plenty of free cash to investors as part of their Recovery Scenario of a quick return to ‘normal growth’.  It doesn’t matter whether the investor believes in the Scenario, the driver is simply the fear of […]

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Iran talks offer hope on oil prices

Iran has been at the centre of all the major oil market price spikes in the past few decades: Today’s record prices on an annual basis are partly due to market fears over supply disruptions due to the Iran/Israel nuclear issue Fears over a nuclear showdown also led prices to jump to $150/bbl in July 2008, when the […]

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“I’m Sorry, America” says Fed’s official responsible for QE operations

Over the years, the blog has been very critical of the quality of people appointed by the US Federal Reserve to undertake the actual trading involved in its ‘Quantitative Easing’ (QE) programmes: In October 2008, it felt “distinctly underwhelmed” by news that the person supervising decisions on which financial institutions should live or die during the peak of the Crisis […]

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US Federal Reserve cuts growth forecast, again

5 years after the Crisis began, there still seems to be a worrying lack of accountability in the banking sector, even when things go wrong on an epic scale.  Take JP Morgan Chase, for example: It lost $6.2bn in London last year, which its CEO Jamie Dimon initially called “a tempest in a teapot” It has now been […]

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US stock markets hit record but real economy remains slow

“Don’t fight the Fed” is one of the oldest rules in stock market investment.  And it has proved valid again, as this month’s IeC Boom/Gloom Index shows: The Fed and other G7 central banks have poured $10tn of stimulus into financial markets since 2008 This cash has finally taken the S&P 500 (red line) into record territory Critical to this […]

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Central banks pop champagne corks as stock markets soar

Central bankers mean well. But, of course, good intentions do not guarantee good results. Their intention since the start of the 2008 crisis has been to boost financial markets. They have therefore provided $tns of liquidity, which has indeed produced record highs in major stock market indices such as the S&P 500 and Dow Jones […]

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