Economists these days are increasingly sure they can “smooth out” the business cycle rather than just forestall the inevitable. They are wrong. And they’ve been proven so time and again. “Smoothing out the business cycle” just means destroying creative destruction thus not allowing the system to purge itself of misallocated capital thereby leading to even… Keep Reading
If you watched last night’s presidential debate and didn’t start crying from either laughter or pity for the country then you should check your pulse. It was a veritable mudslinging, sideshow, circus act which featured Trump weirdly stalking Clinton around the stage and Clinton asserting that every single thing Trump said was an outright lie.… Keep Reading
We’ve spilled quite a bit of digital ink explaining how the uncertainty surrounding the US election isn’t even close to priced in. Have a look at the following chart from Goldman: (Chart: Goldman) And so, with the S&P at damn near 18X and bonds trading at historically stretched levels, here’s a rundown via Bloomberg on… Keep Reading
We kind of feel like we’re picking on the Bank of Japan at this point. And we are. But let’s face it, they’re an easy target. Never in the history of monetary policy has such a grand policy failure been witnessed. We outlined this on Friday in “Just How Crazy Is The Bank of Japan.”… Keep Reading
A strange thing has happened in the central bank-controlled post-crisis world. Equities have become akin to bonds and bonds akin to equities. That is, the risk is in fixed income, whereas equities have become a shadow of their former selves, exhibiting low volatility and reliable returns. How long will this perversion last? How long, considering… Keep Reading
At the risk of sounding cold-hearted, it’s been nothing short of hilarious to watch Haruhiko Kuroda and Shinzo Abe attempt to guide the yen lower (weaker). In what may well go down in history as one of the most ill-fated policy decisions the market has ever seen, the BoJ took rates into negative territory and… Keep Reading
We’ve talked quite a bit about the money market fund reforms that go into effect next month. If you aren’t familiar, it’s a pretty simple concept. If you’re a prime fund (i.e. not a fund that invests solely in government bonds but instead buys CDs and corporate commercial paper), you’re going to have to start… Keep Reading
Earlier this week, we brought you Sen. Elizabeth Warren’s epic takedown of Wells Fargo CEO John Stumph who presided over a scam that saw the bank create “phantom accounts” to boost their “cross-selling numbers.” Frankly, Warren’s criticism is virtually ironclad, but here to defend Wells Fargo is Priyank Gandhi, assistant professor of finance at the University… Keep Reading
What have we been saying for weeks? That the weak ISM non-manufacturing number, the weak retail print, and the sub-consensus August payrolls print would be all the Fed needed to go “full-Brainard.” Well, they didn’t go “full-Brainard” per se – there were three dissents. And as it turns out, Yellen didn’t really cite that data. Which surprised… Keep Reading
Well, if further inflating asset bubbles was what the Fed wanted to do, they accomplished it today with stocks closing sharply higher after a Fed hold. R.I.P vol. Below, find a rundown of the Street’s take, courtesy of Bloomberg. *********** Independent strategist Ian Lyngen FOMC statement “constructive,” keeps December in play Language on economic activity… Keep Reading