QE is NOT good for the long-end of the bond market. Rather than buying duration to front run the FED, with kneejerk precision, as was done initially after the QE1 and QE2 announcements, the market now fully understands that balance sheet expansion is inflationary....
I was nervous this morning. Would there be electricity? Would there be riots on the streets? Would the ATM work? Had the dike system started cracking? Would there be lines at every bank with angry men in viking hats, pig tails and swords demanding wads of Kroner? I...
Imagine that the state of California could not fund itself in the private capital markets. And as the state unemployment rate pushed north of 25 percent, basic government services ceased, pensions were slashed, house values plummeted and there was growing social...
I'll keep this note short as I'm tooling around Amsterdam and Utrecht with a very limited amount of time for reading and writing. I see no real surprises in Mario's statement. The bond buying plans look to be as advertised with some minor positive changes on the...
The Colonel is baaaaack! In a page right off the script of a "A Few Good Men", a renitent Colonel Bernanke gave one of his strongest performances on the witness stand to date. And while he still won't admit to administering a "code red" - the practice of debasing the...
I was struck once again this morning by how good a central banker Mario Draghi has become. The guy rocks!! My only hope is that some folks at the Federal Reserve begin to take note of what he is really saying. For those that didn't read his Die Zeit article from...
"In terms of the quantity theory of money, we may say that the velocity of circulation of money does not remain constant. 'You can lead a horse to water, but you can’t make him drink.' You can force money on the system in exchange for government bonds, its close money...
A little over 3 and half years ago I was holed up inside an office on the third floor of the Marriner S Eccles building on 20th and Constitution Ave in DC. As many readers know, I chose to leave the private sector in 2009 after spending 16 years on the street. At the...
In an interview with Der Speigel last weekend, Mario Monti said - "It is because of the risk of a euro collapse that the difference between Italy's interest rates and those of Germany are so great. In this way, the high interest rates that Italy is now having to pay...
All aboard the Bernaghi Express - next stop risk asset paradise! The second iteration of "The Committee to Save the World" nailed it last week. The Fed is "closely monitoring" the situation and stands ready to provide "accommodation". These are code words for imminent...
All aboard the Bernaghi Express - next stop risk asset paradise! The second iteration of "The Committee to Save the World" nailed it last week. The Fed is "closely monitoring" the situation and stands ready to provide "accommodation". These are code words for imminent action. It will take some very strong US data, and a […]
