Tag Archives | US Federal Reserve

Chemical and oil prices still lower than 3 years ago

Its now 3 years since the blog suggested on 2 May 2011: “They don’t ring bells at market turning points.  Otherwise, we could all retire to the Bahamas.   But there is growing anecdotal evidence, from chemical buyers and the main retailers, that we may have reached at least a temporary market peak.  And Brent crude oil […]

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Central banks have “attempted to manipulate asset prices and financial makets”

“The proper role for monetary policy is to work behind the scenes to promote long-term growth and price stability, yet central banks have instead attempted to “manipulate asset prices and financial markets” to fine-tune their economies. “I do not think this is a particularly healthy state of affairs for the central banks or our economies. […]

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Sentiment weakens as US stock markets wait for more QE

Sentiment, as measured by the IeC Boom/Gloom Index has weakened considerably over the past 3 months as the chart shows: It peaked at 12 in November, hitting its highest level since before the 2008 Crisis began (blue column) It then drifted lower in December, before rallying back to 9 in the New Year But now […]

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“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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“The dog ate my homework”: excuses for economic slowdown

There were never any excuses from policymakers during the BabyBoomer-led SuperCycle from 1983 – 2007.  The Chairman of the US Federal Reserve, Alan Greenspan, came to be styled ‘The Maestro’.  Whilst the Governor of the Bank of England argued that his efforts had created the NICE decade of Non-Inflationary Constant Expansion. Central bankers came to be seen as wise […]

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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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