Archive - 2009 - Blog entry

More tough talk from a Fed Governor. The problem with talking tough is if you do not back it up with action you look soft. If that is the way this plays out the weak link is still the dollar. If they raise rates as they say they will it is going to dramatically increase the cost of funding the mega-trillions of short term debt that Geithner has floated on our behalf.

Currently, the great market debate seems to center around two chief concerns: Have stocks jumped ahead of the economic recovery? And if so, are they setting up for a big correction? To better gauge the real economic condition, I typically like to look at commercial trade related indicators to verify just how good or bad business is doing. One of the most ignored leading economic indicators is probably freight volume. A review of some key freight indices should provides a much more sobering picture of the US economy.

Should Britain get ready for a mass exodus of bankers who are pissed at these new measures to curb their bonuses? Oh please, where are they going to go? Wall Street? They're next in the line of fire.

Where IS the economy going? Ben Bernanke says we've turned the corner and the economy is in recovery. Don't assume that is the case. It isn't. The data has too many negatives to assume that everything is going to re-set to pre-2008. The prospect of deflation and then stagflation is a more likely scenario.

The Financial Times recently reported on the Fed’s latest exit strategy to eventually contain the inflation zombie...TD touched on this last Thursday, and we will expand upon it here as it is particularly relevant to our ongoing theory that it is the proceeds from permanent open market operations (POMOs) and their close cousins that are driving equities. Though this may be received wisdom to ZH readers, the Fed has done us the favor of providing additional evidence through the FT story. A bit of background, as we are new contributors to this forum:

Project Mayhem reviews the most important financial and geopolitical news of the past week and takes a look at the week ahead.

One of Timmy G's smaller responsibilities is the $60 billion Federal Financing Bank. They're doing a "heck of a job". My bet is it's going to cost us one way or the other. The FFB might be the new lender to the FDIC. It looks like they have already filled out the loan forms. Sheila B. will love the pricing. They are giving the money away.

So, predictably, Gold was hammered ahead of the “G-20” (nice little acronym for a criminal ruling elite, isn’t it? – more like mafia family heads getting together if you ask me) meeting in Pittsburg, Pennsylvania this weekend. What didn’t help matters...

As the nature of markets evolve, you need to understand how collective inflows are influencing the trends in each asset class and changing the relationship between them. Rebalancing is crucial, but so is understanding what is going on in each asset class and how developments in one asset class will impact other asset classes.

Must and interesting reads for your weekend ponder. Some Evans-Pritchard goodness, cash calls, horse manure and a lot more.

All this for a measly $100 million paycheck? He only made $2 billion for Citigroup.

In investing, it's important to think unconventionally and creatively while at the same time considering risks - no matter how remote or unmanageable they are. I keep thinking: What would drive our interest rates up in the US?

Fed Governor Warsh wrote his 'Blog'on QE. He may have penned the words, but not without Bernanke's approval. This was intended to calm the concerns over QE. It did not work for me.

There is a clean energy revolution going on and it's just in its infancy. Those who can't see it are either blind or hopelessly ignorant. If pension funds are smart, they will start thinking about investing opportunistically in this sector now.

Jim Cramer calls a top in Treasury Bonds. So it must be.