Today should have been some sort of momentous occasion. The Germans have backed an expanded EFSF - but the markets are about as excited as Red Sox fans. The new chatter is that this expanded power is not enough - which is of course correct - the EFSF would need trillions to fill the holes […]

Here is an excerpt from Fed Governor Raskin's speech yesterday: "Indeed, some commentators assign a label of “hawk” or “dove” to the various FOMC participants in an attempt to characterize how we prioritize the goals of maximum employment and price stability. In my view, such labels are ill conceived and misleading because everyone on the […]

Remember the August 10, 2010 FOMC meeting? After the statement was released we wrote a commentary entitled the "The Top 10 FOMC mistake list – a new addition” (see the link “NSN L7TH583PWT1D” on your BB). It was the meeting where Ben thought he was setting the stage for a QE2 announcement in Jackson Hole […]

So, the colonel wimped out. He didn’t listen to his academic consigliore – Rogoff, Woodford and Geanakoplos. And he left the most courageous Fed President – Charlie Evans – out in the cold. Instead he went for a compromise after feeling the heat from both a highly politicized Republican leadership and a set of Austro-German […]

At the FOMC meeting which begins today, there will likely be 3 alternatives presented in the Bluebook - A, B and C. Below we present what the statement might look like under each alternative. The more dovish Alternative A would likely call for 600b of longer dated securities to be added to portfolio and 300b […]

Just a very short note today as I'm headed to the airport to start a 7 day trip across the US. I am putting a note together on what the FOMC statement might look like next week so keep an eye out - this is going to be one of the most important FOMC meetings […]

In most ways the excess borrowing by, and lending to, European sovereign nations was no different than it was to US sub-prime households. In both cases loans were made to folks that never had the means to pay them back. And these loans were made in the first place because regulatory arbitrage allowed stealth leverage […]

Our scorching summer has official ended but fear levels remain red hot. One only needs to look at a chart of the German Bund, the US 10yr, the Greek 2yr, Gold or any money center bank stock price to see that markets are anticipating some catastrophic events this autumn. In the last couple months we […]

A baseball score - probably about right if we played ball, but no. A hockey score - very unlikely. A soccer score - no chance. It is something far more important - it is the number of Nobel prizes in economics that have been awarded to residents of each country. When one searches for seminal […]

Jackson Hole has come and gone taking spoos up over 4% and 10s up 15bps from their Friday lows. We are clawing back some of the August misery, but there is a lot of pain still out there. The Colonel has work to do, but the good news is he knows it - and that […]