Tag Archives | US Federal Reserve

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US Fed’s doubling of QE3 fails to impress markets

Over the past 4 years, 18 men (no women are involved) have run the global response to the financial crisis, as politicians refused to take a lead. Instead, the world’s leading central bankers felt forced to establish their own Economic Consultative Committee (ECC). They represent countries comprising 75% of the global economy ($51tn). They now […]

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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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US Federal Reserve policies confront a closing door

The blog’s friends at the American Chemistry Council used a very relevant quotation recently from Alexander Graham Bell, who invented the telephone and numerous other modern wonders: “Sometimes we stare so long at a door that is closing that we seek too late the one that is open.” It is a theme taken up recently […]

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US companies’ revenue starts to fall, as higher oil prices bite

Whisper it quietly, so as not to disturb the world’s central bankers as they rest. But the impact of their latest round of quantitative easing programmes (yellow highlight, QE3) may already be slowing. As the chart shows, these had an immediate impact on financial markets from their launch in June: • The benchmark S&P 500 […]

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Boom/Gloom Index slows as sentiment weakens

Here we go again’ seems to be the reaction of financial markets to the US Federal Reserve’s latest push to expand liquidity. So far, policymakers have tried 4 times to return the economy to the world of the Supercycle between 1982-2007. As the chart shows: • Major stimulus programmes were launched by the G-20 in […]

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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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Financial markets at top of their trading range, again

Financial markets cannot make up their minds about the outlook. As this month’s IeC Boom/Gloom Index shows, sentiment (blue column) remains exactly at the dividing line between optimism and pessimism. This parallels the behaviour of the S&P 500 Index (red line). It had recovered strongly from March 2009, but has since found it very difficult […]

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US companies have less cash to spend

The US Federal Reserve has provided a wonderful new example of the problems with spreadsheets. It also shows how a naive belief in the credibility of any computer-generated output has come to over-ride common sense. In turn, policy can become based on myth, rather than reality. The chart above from the Wall Street Journal shows […]

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A is for Ambiguity

Today the blog ends its review of the VUCA world with A for Ambiguity. The global economy often seemed to be on auto-pilot during the 25 years of the economic Supercycle between 1982-2007. The chart above shows US GDP since 1929 (when records began), with the pink columns showing the official dates for recession: • […]

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Demand declines as Federal Reserve fuels oil price rise

The Wall Street Journal carried an interesting opinion piece on Friday, assessing current market conditions from the viewpoint of the film character, Forrest Gump. Gump’s key insight is that “Stupid is as stupid does”. Thus the Journal noted: “Oil staged its last price surge along with other commodity prices when the Fed revved up its […]

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