Global Market Commentary, Analysis and Investments
“In the first quarter of 2012,” read the statement issued before this morning’s open, “Caterpillar dealers added machine inventory of about $875 million, and this year, they reduced machine inventory by about $700 million.”
By all rights, the market should be having — as the annoying receptionist in Office Space said — “a case of the Mondays.” We count at least six items that should be dragging the market down.
[Read more...]The Federal Reserve is, of course, a bank. So after it has a meeting, it issues a statement outlining the discussion — a “bank statement.” Hmm… Now that I think about it, that must be where the acronym “BS” comes from.
I pride myself on explaining complex financial situations in everyday language. However, when it comes to the Federal Reserve, I readily admit that I am sometimes befuddled. I used to watch Alan Greenspan testify before Congress when he was Chairman of the Fed, and I often ended up asking myself, “What did he just say?” The Fed’s code and doublespeak is Greek to me, as it is to most folks.
[Read more...]“I invest in anything that Bernanke can’t destroy,” said David Stockman in 2010, “including gold, canned beans, bottled water and flashlight batteries.”
Mr. Stockman — the boy-genius White House budget director during Reagan’s first term — has refined those thoughts in a new book called The Great Deformation: The Corruption of Capitalism in America. By way of introduction, he penned a think piece in Sunday’s New York Times beneath a provocative piece of graphic art declaring “Sundown in America.”
[Read more...]“Cash is king,” was once the old saw. The saying became passé in boomtime. Nobody wanted to hold on to cash. There were stocks and real estate to buy, not to mention big screen TVs and granite counter tops. Besides, the PhDs at Federal Reserve stay up late at night figuring out how to make money less valuable. Ben Bernanke and his colleagues keep printing the stuff to solve what they fear the most: insufficient aggregate demand and liquidity traps.
[Read more...]Stocks are on the rise. Gold is on the rise. Bitcoin is on the rise. Everything is up…up…and, away!
The Dow has been on a tear this week, up 300+ points since Tuesday’s low. What’s causing the rally? Is the economy fixed? Have Bernanke’s magic money elixirs finally done their job? Or is collective delusion on the march once again?
[Read more...]A few months ago, the insightful and engaging financial market observer, James Grant, drew a comparison between “witchcraft, on the one hand, and modern central banking, on the other.”
Grant presented this novel comparison in an address to the “Investment Decisions and Behavioral Finance” meeting at the Harvard Kennedy School.
[Read more...]The Dow Jones ended the week with a small gain, but this is no big deal as it did so because the Federal Reserve made sure it did. Here is an article which quotes the President of the Dallas Fed admitting that the Fed is manipulating the stock market’s valuation higher.
“I am a macroeconomist rather than an historian. My focus will be on broad economic issues rather than details.”
Professor Ben S. Bernanke, “The Macroeconomics of the Great Depression: A Comparative Approach,” 1995
“These days central banking is my line of work as well. Before that, I was an academic economist and economic historian.”
[Read more...]This morning, Dr. Ron Paul (R-TX) held his first interview since being appointed chair of the House Monetary Policy Subcommittee. From what he says in the video below, he’s going “to think things through and not overdo things too soon,” but ultimately plans to stick to his guns, and “emphasize the oversight of the Federal Reserve.”
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This Car Won’t Move
The latest unemployment data reveal the hope and tragedy of the American economic plight. Cheers went up for a modest increase in hiring, one that:
- barely keeps up with population;
- features mostly temp workers;
- leaves out prime-age males and all young workers;
- and keeps labor participation rate at a low level from 1979.
[Read more...]Click for detailed story