Paul Volcker
Guest Post: Fed Policy Risks, Hedge Funds And Brad DeLong’s Whale Of A Tale
Submitted by Tyler Durden on 05/15/2013 20:30 -0400- Ben Bernanke
- Ben Bernanke
- Bill Gross
- Bond
- Congressional Budget Office
- Creditors
- Cyclicality
- Guest Post
- Hayman Capital
- High Yield
- Jeremy Grantham
- John Maynard Keynes
- Kyle Bass
- Kyle Bass
- Maynard Keynes
- Monetary Policy
- National Debt
- Paul Volcker
- Reality
- Recession
- Student Loans
- Tyler Durden
- Unemployment
- Volatility
It’s amazing what people can trick themselves into believing and even shout about when you tell them exactly what they want to hear. It was disappointing to see Brad DeLong’s latest defense of Fed policy, which was published this past weekend and trumpeted far and wide by like-minded bloggers. If you take DeLong’s word for it, you would think that the only policy risk that concerns hedge fund managers is a return to full employment. He suggests that these managers criticize existing policy only because they’ve made bad bets that are losing money, while they naively expect the Fed’s “political masters” to bail them out. Well, every one of these claims is blatantly false. DeLong’s story is irresponsible and arrogant, really. And since he flouts the truth in his worst articles and ignores half the picture in much of the rest, we’ll take a stab here at a more balanced summary of the pros and cons of the Fed’s current policies. We’ll try to capture the discussion that’s occurring within the investment community that DeLong ridicules. Firstly, the benefits of existing policies are well understood. Monetary stimulus has certainly contributed to the meager growth of recent years. And jobs that are preserved in the near-term have helped to mitigate the rise in long-term unemployment, which can weigh on the economy for years to come. These are the primary benefits of monetary stimulus, and we don’t recall any hedge fund managers disputing them. But the ultimate success or failure of today’s policies won’t be determined by these benefits alone – there are many delayed effects and unintended consequences. Here are seven long-term risks that aren’t mentioned in DeLong’s article...
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Reuters Releases George Soros Obituary By Mistake: "Enigmatic Financier, Liberal Philanthropist Dies At XX"
Submitted by Tyler Durden on 04/18/2013 18:04 -0400First CNN, then AP, now Reuters: the entire media is increasingly starting to look like amateur hour. Unless, of course, Soros is like Osama, and had several "reincarnated" body doubles, with the original specimen long gone. Here is our suggestion for another prepared article: "Today after XX centuries of monetizing debt, the Emperor of the Galactic Central Bank, Gaius Maximus Printius Bernankius the DCLXVIth, ended QE in the year of the alien invasion, XXXXX. Bread costs XXXXXXXXXXX."
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BlackRock Calls For Bernanke To "Rein In" QE: Says It "Distorts Markets, Risks Stoking Inflation"
Submitted by Tyler Durden on 04/08/2013 19:49 -0400It has been well known for years that PIMCO's Dr. Jekyll and Mr. Gross, the original bond king in charge of Allianz' $1+ trillion bond portfolio, has been a vocal critic of QE even in the face of his daily tweet barrage, which often recommends positions in complete contradiction to what said king opined on in his expansive monthly essays. What will come a great surprise, however, is that the "other" fund, which is just as big, is run by Wall Street's shadow king Larry Fink, and which has been advocating to go all in stocks for over a year (preferably using ETFs) interim drawdowns be damned (after all everyone by now should have an infinite balance sheet) - BlackRock - just went all out against QE. As the FT reports, BlackRock's fixed income guru, formerly at Lehman Brothers, Rick Reider, "has called on the Federal Reserve to rein in its programme of quantitative easing, saying its bond-buying tactics are a “large and dull hammer” that have distorted markets and risk stoking inflation." Why, it is almost as if we wrote that... Oh wait, we did. Back in 2009.
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But Do We Really Want Smaller Zombie Banks?
Submitted by rcwhalen on 02/12/2013 10:11 -0400The problem with “too-big-to-fail” is first and foremost the behavior of our beloved political leaders in Washington
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Guest Post: Why Reforms Won't Work
Submitted by Tyler Durden on 02/07/2013 12:21 -0400
The list of public/private institutions that desperately need structural reform is long: the Pentagon, healthcare (a.k.a. sickcare), Social Security, the complex mish-mash of programs that make up the Welfare State, the 73,000 page tax code, public pensions and the financial sector, to name just the top few. Regardless of the need for reform, it isn't going to happen for these structural reasons.
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Deep Dive: Financial Repression Reconsidered
Submitted by Marc To Market on 01/17/2013 09:20 -0400- Bank of England
- Bank of Japan
- Bond
- Capital Markets
- Central Banks
- Credit Crisis
- Creditors
- default
- European Central Bank
- Federal Reserve
- Gross Domestic Product
- HIGHER UNEMPLOYMENT
- International Monetary Fund
- Japan
- Lehman
- Monetary Policy
- Money Supply
- national security
- Nominal GDP
- None
- Paul Volcker
- PIMCO
- Quantitative Easing
- Real estate
- REITs
- Swiss National Bank
- Switzerland
- The Visible Hand
- Unemployment
In this piece, I re-examine what many economists call "financial repression" and I find it to be sorely lacking as a description of what is happening. I also look at a related concern about the loss of central bank independence. Color me skeptical.
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Qualified Mortgages, Loan Credit Standards and Safe Harbors for Securities Fraud
Submitted by rcwhalen on 01/14/2013 11:24 -0400It is a “fraudulent transfer” to transfer assets with intent to leave the transferor with inadequate capital... Thus every bank “sale” done for the purpose of reducing regulatory capital is, by definition, fraud – a form of bank theft.
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Five Decades Of Systemic Shocks And Policy Responses
Submitted by Tyler Durden on 01/09/2013 11:40 -0400
With the decision of the Federal Reserve to continue its policy of asset purchases (QE) as long as US employment remains depressed, we can say that inflation targeting as a tool of monetary policy, introduced in the early 80s under Paul Volcker, has finally been buried. Central banks are now moving towards a policy of targeting asset prices and other economic variables, primarily nominal GDP (or jobs per se). The consequences of this monetarist revolution on asset price formation are difficult to assess. However, we cannot overemphasise the potential disruption to the correlation and volatility regimes to which investors have become accustomed. In such conditions, proven investment strategies may prove obsolete. More than ever, investors will need to be able to challenge and fight against preconceived ideas. Lastly, and fundamentally, it is to be hoped that the policy of quantitative easing (QE) does not last too long, because, ultimately, it could lead to a massive distortion in the allocation of capital. However, as the charts below illustrate, every decade has been characterised by a different economic, monetary/fiscal policy, and investing environment and the limitations of Keynesian policy have been betrayed.
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The Banking Elite are Not Only Stealing Our Wealth, But They Are Also Stealing Our Minds
Submitted by smartknowledgeu on 01/03/2013 06:22 -0400Though the banking elite are now increasingly being exposed for their criminal activities against humanity in their theft of citizens’ wealth, rarely is another one of their greatest transgressions, their theft of citizens’ minds and the process by which they target and transform young adults into docile, obedient creatures through institutional academia, ever discussed.
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On Surviving The Monetary Meltdown
Submitted by Tyler Durden on 11/18/2012 23:18 -0400
After 40 years of boozing on easy money and feasting on fantastical asset price inflations, the global monetary system is approaching catharsis, its arteries clogged and instant cardiac arrest a persistent threat. ‘Muddling through’ is the name of the game today but in the end authorities will have two choices: stop printing money and allow the market to cleanse the system of its dislocations. This would involve defaults (including those of sovereigns) and some pretty nasty asset price corrections. Or, keep printing money and risk complete currency collapse. We think they should go for option one but we fear they will go for option two. In this environment, how can people protect themselves and their property? Our three favourite assets are, in no particular order, gold, gold and gold. After that, there may be silver. We are, in our assessment, in the endgame of this, mankind’s latest and so far most ambitious, experiment with unconstrained fiat money. The present crisis is a paper money crisis. Whenever paper money dies, eternal money – gold and silver – stage a comeback. Remember, paper money is always a political tool, gold is market money and apolitical.
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Kyle Bass: Fallacies Such As MMT Are "Leading The Sheep To Slaughter" And "We Believe War Is Inevitable"
Submitted by Tyler Durden on 11/17/2012 14:58 -0400
"Trillions of dollars of debts will be restructured and millions of financially prudent savers will lose large percentages of their real purchasing power at exactly the wrong time in their lives. Again, the world will not end, but the social fabric of the profligate nations will be stretched and in some cases torn. Sadly, looking back through economic history, all too often war is the manifestation of simple economic entropy played to its logical conclusion. We believe that war is an inevitable consequence of the current global economic situation."
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The IRA | Basel III, Fiscal Cliffs and Economic Mysticism
Submitted by rcwhalen on 11/14/2012 11:49 -0400- Barack Obama
- Ben Bernanke
- Book Value
- Budget Deficit
- Central Banks
- Congressional Budget Office
- default
- Dyson
- Federal Deposit Insurance Corporation
- Fisher
- Global Economy
- Gross Domestic Product
- JPMorgan Chase
- Larry Summers
- Neo-Keynesian
- Nominal GDP
- None
- Paul Volcker
- Reality
- Recession
- Reuters
- Securities Fraud
- Sheila Bair
- Social Security Trust Fund
- The Economist
- White House
Will Congress go over the fiscal cliff? Yes, we've been going for decades, really since the social unrest of the 1970s.
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R(osenberg) & B(ernstein): Two Ex-Merrill Colleagues, Two Opposing Outlooks, One Permabull Rebuttal
Submitted by Tyler Durden on 10/19/2012 22:32 -0400- Bank of America
- Bank of America
- Ben Bernanke
- Ben Bernanke
- Bond
- Capital Markets
- Central Banks
- Commodity Futures Trading Commission
- David Rosenberg
- European Central Bank
- Exchange Traded Fund
- Federal Reserve
- GAAP
- Gross Domestic Product
- Investor Sentiment
- Jim Cramer
- Kool-Aid
- Merrill
- Merrill Lynch
- National Debt
- None
- Paul Volcker
- recovery
- Richard Bernstein
- Rosenberg
- Value Investing
Earlier this week two former Merrill colleagues, since separated, were reunited on several media occasions, and allowed to spar over their conflicting views of the world. The two people in question, of course, are Gluskin Sheff's David Rosenberg, best known during the past 3 years for not drinking the propaganda Kool-Aid, and systematically deconstructing every "bullish" macroeconomic datapoint into its far more downbeat constituent parts, and his ebullient ex-coworker, Richard Bernstein, formerly head of equity strategy at a firm that had to be rescued by none other than Bank of America and currently head of RBA advisors, who just happens to be bullish on, well, everything. And since any attempt at holding an intelligent conversation on CNBC is ultimately futile (as can be seen here) and is constantly broken up by both ads, and interjecting anchors and show producers who care far less about facts than keeping the presentation 'engaging' (and going to such lengths to even allow Jim Cramer to have his own TV show), Rosenberg decided to dedicate his entire letter to clients today to "providing a rebuttal" of the slate of reasons why according to Bernstein the "we are on the precipice of a 1982-2000 style of secular market." What follows is one of the most comprehensive "white papers" debunking the bullish view we have seen in a while. Read on.
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Frontrunning: October 18
Submitted by Tyler Durden on 10/18/2012 07:39 -0400- American Express
- Australia
- Bank of America
- Bank of America
- China
- Corporate America
- Crude
- Crude Oil
- Exxon
- Fail
- Federal Reserve
- Germany
- Goldman Sachs
- goldman sachs
- Gross Domestic Product
- India
- Insider Trading
- International Monetary Fund
- Italy
- Keefe
- Market Conditions
- Merrill
- Merrill Lynch
- Moore Capital
- Natural Gas
- Newspaper
- Paul Volcker
- Pepsi
- Prudential
- ratings
- Reuters
- SAC
- Trade Balance
- Unemployment
- United Kingdom
- Verizon
- Wall Street Journal
- Germany will pay Greek aid (Spiegel)
- Spain Banks Face More Pain as Worst-Case Scenario Turns Real (Bloomberg)
- China’s Growth Continues to Slow (WSJ)
- Executives Lack Confidence in U.S. Competitiveness (WSJ)
- Poor Market Conditions will See 180 Solar Manufacturers Fail by 2015 (OilPrice)
- Wen upbeat on China’s economy (FT)
- Gold remains popular, despite the doubts of economists (Economist)
- Armstrong Stands to Lose $30 Million as Sponsors Flee (Bloomberg)
- IMF urges aid for Italy, Spain but Rome baulking (Reuters)
- EU Summit Highlights Financial Divide (WSJ)
- FOMC Straying on Price Target, Former Fed Officials Say (Bloomberg)
- Putin defiant over weapons sales (FT)
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Game of Thrones: The Debate of Liars
Submitted by Econophile on 10/06/2012 14:13 -0400Polticians lie. Obama and Romney are politicians. They talk. Therefore they lie. They lied big time during the debate. Are our choices between evil and lesser evil?
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