Tags » QE

Why US Stock And Bond Markets Are High

We’ve been saying for quite some time now that the US equity market’s seemingly inexorable (until this week) tendency to rise to new highs in the absence of the Fed’s guiding hand is almost certainly in large part attributable to the fact that in a world where you are literally guaranteed to lose money if you invest in safe haven assets such as negative-yielding German bunds, corporations can and will take advantage of the situation by issuing debt and using the proceeds to buy back stock, thus underwriting the rally in US equities. 244 more words

The Kelley Monetary Policy Rule

Everybody hates rules but this is a breakthrough policy to free the fearful Fed.

Background

The Federal Reserve Board (Fed) has held the Fed Funds Rate (the interest rate the Fed charges banks) below 1 percent for 7 years.  347 more words

Publications

Central bankers and investors: the deluded leading the cynical and naïve

A selection of my recent observations in client notes, speeches and radio appearances, which have provoked sufficient reaction to merit a further airing.

Fed loses ‘patience’                 … 1,887 more words

Unnatural Acts: When stocks and bonds trade together

We always watch bonds closely. In the beginning of this blog’s history some readers might have called our fixation obsessive, so we diversified but never stopped watching. 482 more words

Stock Market

The Song Remains the Same, from The Economic Cycle Research Institute

From the Economic Cycle Research Institute, at http://www.businesscycle.com:

Eleven trillion dollars: that’s how much of so-called Quantitative Easing the world’s central banks have done since the 2008 crisis.

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Economics

Day 57: Where I think the dollar will go

$20.99 $881.97

Saw a small pop in the dollar today and made majority of profits shorting GBP/USD and buying into USD/JPY. Although we saw a minor bullish move on the dollar, I’m still skeptical. 82 more words

25 Mar 2015 (TheAge) - Central banks' QE fuels 'insanity trading', says US investment expert Ed Yardeni

(25 March 2015, The Age, BusinessDay, p39, Mark Mulligan)

‘Extreme easing of monetary policy has pumped up the supply of goods and services but failed to stimulate the demand to match it, an investment bank veteran and former US Federal Reserve economist says. 44 more words

1.Market Observations