Global Market Commentary, Analysis and Investments
“Hey why’s the market up big?� your editor asked a stockbroker friend yesterday.
“Because everything’s great today?� the friend deadpanned.
“But wasn’t everything broken yesterday?� your editor persisted.
“Yes,� the friend replied. “But today it’s fixed.�
[Read more...]“[H]igher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes.” -Federal Reserve Chairman Ben S. Bernanke, Washington Post, November 4, 2010
In Ben Bernanke’s Washington Post elucidation of Fed policy, “What the Fed Did and Why: Supporting the Recovery and Sustaining Price Stability,” the Fed chairman cut-and-pasted misleading paragraphs from earlier misleading speeches. He did not discuss the two most important aspects of his money experiment. Bernanke did not address, first, the real economy or, second, the rest of the world. It will be the first of these lapses that will be discussed below.
[Read more...]Just this week an inevitable milestone came to pass, the Federal Reserve surged ahead of Japan as the second largest owner in the world of US debt… second only to China. Of course, the funds used to generate that massive debt position have only been made possible through the smoke and mirrors of quantitative easing. Zero Hedge notes this, and two other generally under-reported US debt facts, in a recent post.
[Read more...]Faced with crisis, the White House and Congress turned to fiscal stimulus that’s not only itself unsustainable, but that’s also unable to provide a firm foundation for lasting recovery.
Sooner or later, the US will have to pay the piper in the form of reduced government services, some more needed than others, and substantially higher taxes for households and businesses. This is one trillion-plus-dollar beast that could stand to benefit from a leak.
[Read more...]Peter Orszag fell on his sword last week. Barack Obama’s budget director left after disagreeing with Obama’s tax pledge. ‘Read my lips,’ the chief executive might have said; no new taxes for people earning less than $250,000.
Mr. Orszag hastened to distort the record:
[Read more...]- Dow went nowhere yesterday. Gold fell $17.
“The doctrine of regulation and legislation by ‘master minds,’ in whose judgment and will all the people may gladly and quietly acquiesce, has been too glaringly apparent at Washington during these last ten years. Were it possible to find ‘master minds’ so unselfish, so willing to decide unhesitatingly against their own personal interests or private prejudices, men almost godlike in their ability to hold the scales of justice with an even hand, such a government might be to the interests of the country; but there are none such on our political horizon, and we cannot expect a complete reversal of all the teachings of history.�
[Read more...]Treasury Secretary Geithner is in Berlin. He’s there hoping to convince Europe to continue runaway deficit spending he believes will somehow rescue the world economy.
The Continent has its own view. Europe is still executing the $1 trillion rescue package in support of its most indebted countries, and it’s trying to dial down any new spending.
[Read more...]The financial crisis that began in housing, and then with banks and insurers, has now moved onto the balance sheets of nations. And, among the fiscally unsound, it’s the euro that is suffering the most. It recently hit a 14-month low in dollar terms, and the ongoing uncertainty facing the EU continues to break records for pessimism.
[Read more...]Despite their bubble-like growth, we’ve recently discussed the investment potential of emerging markets. Similarly, we’ve looked at whether certain bubbles, like housing in China, are real or not so real.
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Inter-Galactic Bailout – The Fed extends the hand of debt beyond borders
The Fed is now bailing out the whole world! But who will bail out the Fed?
After the news came out yesterday, the Dow rose 249 points. Gold was up $2.
Here’s the latest from Bloomberg:
Stocks jumped, sending US benchmark indexes to their biggest gains in three months, while the euro and commodities rallied and Treasuries slid amid improving data on the American and Chinese economies and speculation of a larger effort to end Europe’s debt crisis.
[Read more...]Click for detailed story