Monetary Policy

Gold Standard Institute's picture

Legal Tender Renders Planning Impossible





There is confusion over what legal tender law does. It doesn't force merchants to accept dollars under threat of imprisonment. It attacks lender, by granting debtors a right to repay in dollars.

 
Tyler Durden's picture

Frontrunning: July 23





  • Here come the gates which we predicted in 2010: SEC Is Set to Approve Money-Fund Rules (WSJ)
  • Dick's cuts 400 jobs as golf now less popular (MW)
  • Kerry arrives in Israel, pushes for peace (Reuters)
  • Pay Penalty Haunts Recession Grads as U.S. Economy Mends (BBG)
  • Appeals Courts Issue Conflicting Rulings on Health-Law Subsidies (WSJ)
  • Rebel Stronghold Donetsk Holds Breath as Shellfire Mounts (BBG)
  • Business executive wins Georgia Republican runoff in U.S. Senate race (Reuters)
  • Five held in China food scandal probe, including head of Shanghai Husi Food (Reuters)
  • Jobs Hold Sway Over Yellen-Carney as Central Banks Splinter (BBG)
 
Tyler Durden's picture

Overnight Futures Levitation Mode Engaged But Subdued





Despite yesterday's lackluster earnings the most recent market levitation on low volume was largely due to what some considered a moderation in geopolitical tensions after Europe once again showed it is completely incapable of stopping Putin from dominating Europe with his energy trump card, and is so conflicted it is even unable to impose sanctions (despite the US prodding first France with BNP and now Germany with the latest DB revelations to get their act together), as well as it being, well, Tuesday, today's moderate run-up in equity futures can likely be best attributed to momentum algos, which are also rushing to recalibrate and follow the overnight surge in the AUDJPY while ignoring any drifting USDJPY signals.

 
Tyler Durden's picture

Cows Versus Bulls





In yet another example of central planners not comprehending the unintended consequences of their actions, Glenn Stevens - head of the Reserve Bank of Australia - commented last night on the curious lack of animal spirits holding back the global economic recovery. As Bloomberg's Richard Breslow notes though, of course, his argument is disingenuous at best since it is the actions (and consequences) of central banks crowding out other market participants and creating a culture of investors who moo (herd-like along with their yield-chasing, buyback purchasing, capex cutting peers) rather than roar... Central banks have turned investors from bulls to cows...

 
Tyler Durden's picture

"Authenticity Is As Rare As A Unicorn In Today's Politically-Motivated Markets"





In the Golden Age of the Central Banker it is impossible to distinguish fundamental economic reasons for asset class price movements from politically-driven strategic reasons. When words are used for strategic effect rather than a genuine transmission of information you create a virtual stalking horse. It’s a focus on how something is said as opposed to what is described. It’s a focus on form rather than content, on truthiness rather than truth. It’s why authenticity is as rare as a unicorn in the public world today.

 
Tyler Durden's picture

How Effective Have The Fed's QE Programs Been?





It is quite clear that Bernanke achieved his goal of inflating asset prices by expanding the Federal Reserve's balance sheet by 371.64% since the end of the financial crisis. However, was he as successful in fulfilling his other objectives? The following charts perform the same cost/benefit analysis on real economic health... Did the Fed's monetary intervention programs keep the economy from sliding into a much deeper recession?  Probably. Have the programs been effective in achieving Bernanke's stated goals? Not really.

 

 
Phoenix Capital Research's picture

The Fed's Cancerous Actions Are Killing the Patient





Today we’re going to explain what the “final outcome” for this process will be. The short version is what happens to a cancer patient who allows the disease to spread unchecked (death).

 
Tyler Durden's picture

Is Yellen Being Misled By Employment Statistics?





The actual state of employment in the U.S. is likely far weaker than the economic statistics currently suggest. If this is indeed the case, it creates a potential for policy mistakes that could have negative consequences to both the economy and the financial markets.

 
Tyler Durden's picture

IMF's Christine Lagarde Joins The Chorus, Warns Market Is "Too Upbeat"





"The head of the International Monetary Fund warned on Friday that financial markets were "perhaps too upbeat" because high unemployment and high debt in Europe could drag down investment and hurt future growth prospects." To summarize: first the BIS, then the Fed and now the IMF are not only warning there is either a broad market bubble or a localized one, impacting primarily the momentum stocks (which is ironic in a new normal in which momentum ignition has replaced fundamentals as the main price discovery mechanism), they are doing so ever more frequently.

 
Tyler Durden's picture

On Janet "Pump-And-Regulate, Baby" Yellen's Acting Skills





Fed history is riddled with examples of how ‘too-low-for-too-long’ Fed policies have created booms that caused busts.   The crazy irony now is that current policy is specifically trying to create the boom with the belief that rules, promises, and a gradual change of any policy will be enough to massage a soft landing.   Equally disturbing is the fact that the FOMC appears to believe that it has no choice but to keep policy exceptionally easy, because with rates at zero, it has no bullets left should the economy falter.  It reminds me of that movie when Sargent Foley (Louis Gossett) was trying to get Mayo (Richard Gere) to quit boot camp and a broken Mayo cries out, “I’ve got nowhere else to go”.

 
Tyler Durden's picture

This Is Not Your Grandma's Business Cycle





Presented with little comment aside to ask - in all frankness - does this look like a 'recovering' economy five years after a central bank unleashes its extreme monetary policy?

 
EconMatters's picture

The Counterfactual Case Against ZIRP





These are two areas where the Federal Reserve might want to consider in their overall evaluation of the effectiveness of the ZIRP Experiment. I think the counterfactual case in these two examples is quite compelling.

 
Tyler Durden's picture

Frontrunning: July 17





  • Bubble Paranoia Setting in as S&P 500 Surge Stirs Angst (BBG)
  • But how will math PhDs determine "fair value" - Wall Street Techs Take Secrets to Next Job at Their Peril (BBG)
  • U.S., EU Escalate Russia Sanctions as Putin Holds Firm (Bloomberg)
  • Australia Becomes First Developed Nation to Repeal Carbon Tax (WSJ)
  • Gaza humanitarian truce goes into force, hours after tunnel clash (Reuters)
  • Barclays, Deutsche Bank Said to Face U.S. Senate Hearing (BBG)
  • ECB Asset Buying Far Off and May Not Come, Hansson Says (BBG)
  • Time Warner win would make Murdoch U.S. media king (Reuters)
  • Costly Vertex Drug Is Denied, and Medicaid Patients Sue (WSJ)
  • China Rallying for All Wrong Reasons to Top-Rated Analyst (BBG)
  • GM recalls some cars with problematic switches; judges others safe (Reuters)
 
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