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Bernanke Buying Spree: The Good, the Bad, & the Reality
It’s the biggest, one-day economic shot in the arm the Fed has ever prescribed.
Just a few days after his PR tour on 60 Minutes, Chairman Bernanke announced that the Fed is going to be pumping over $1.15 trillion worth of freshly printed dollars into the U.S. economy. The lender of last resort said it will be buying mortgage-backed securities from Fannie Mae and Freddie Mac debt and loaning throwing another $100 billion into the Freddie and Fannie black hole.
The big move though, and what got the markets rolling again, was when the Fed said it will be buying “longer-term”…
19Mar2009 | Q1 Publishing | 0 comments | ContinuedBoiling Point for Keynesian Economics (Part 3 of 3)
In the first two parts of this series, we identified fundamental economic weaknesses that running a Keynesian based economy have brought us. So the next question is figuring out when the critical point will be, and what it will look like. In short, we’re looking at it as we speak.
Let’s start with the ‘when’ of the equation. To put it in its simplest form, the critical point our Keynesian economy will be when the U.S. completely lacks the ability to sell any of its debt, and consumers are unable to take on any more debt.
Using the three farmer analysis in…
20Nov2008 | Oxbury Research | Comments Off | ContinuedWhy trust Paulson and Bernanke to run an insurance company
New York Times 9/17/08
The central bank has also transformed itself almost overnight into the Fed Inc. by essentially taking over American International Group after already taking on hundreds of billions of dollars in mortgage securities to help ailing financial institutions.
Instead of just setting monetary policy in its Ivory Tower-like setting, the Fed now must wear several hats — that of insurance conglomerate, investment banker and even hedge fund manager.
“This is unique, and the Fed has never done something like this before,†said Allan Meltzer, a professor of economics at Carnegie-Mellon University and author of a sweeping history of the…
19Sep2008 | The Real Deal | Comments Off | ContinuedInvesting in Innovators
Looking for the Innovators
While in Vienna last month, I grabbed hold of the international edition of The Wall Street Journal. Over a classic Viennese breakfast of coffee, a boiled egg and pastry, I stumbled across an interview with Ted Forstmann, titled, “The Credit Crisis Is Going to Get Worse.â€
I hadn’t seen Forstmann’s name in years. He once lorded over one of the world’s most famous private equity firms, Forstmann Little. For a time, it was, as the Journal notes, “the most successful private equity firm in the world, renowned for both its outsized returns and its caution.†When things got…
29Aug2008 | Whiskey and Gunpowder | Comments Off | ContinuedThe National Debt: The Biggest Threat to Your Financial Future
I don’t ordinarily watch horror flicks. So I certainly don’t recommend them. But today I’m making an exception.
Take everyone over 15 in your household to see Addison Wiggin’s new movie “I.O.U.S.A.” at your local theater. It’s an eye-opening experience. And a wake-up call.
I saw the film in Asheville, NC on opening night last Thursday. And I was lucky to get in. The movie sold out. More than two dozen people were turned away. (Some ticket holders were auctioning off their tickets to the highest bidders!)
What’s all the fuss about? I.O.U.S.A. is a long overdue documentary that takes a hard look…
27Aug2008 | Investment U | Comments Off | ContinuedTHE HALF AND HALF IN YOUR ECONOMIC COFFEE
Peter Schiff of Euro Pacific Capital writes, “The grim reality is that trillions of dollars were borrowed and spent that will never be repaid. No government program can alter that fact. Someone is going to have to pay the piper for all those granite counter tops and plasma TVs. The price tag is staggering and for all the bailouts and stimulus packages, all the government can do is exacerbate the losses and shift the burden through inflation. Nor can the government resurrect bubble home prices and the fantasy of real estate riches that went along with them. One way or…
5Aug2008 | Daily Reckoning | Comments Off | ContinuedBuried Treasure at the Federal Reserve?
Every market cycle has its genius.
Even a market cycle as wild and volatile as this one has been.
And the latest genius might be just what the U.S. Federal Reserve needs to restore order around here: She might even be able to bring credibility back to the global financial markets.
Elizabeth Duke goes by “Patsy.” And while the nickname may be soft, the person behind the moniker isn’t soft. In fact, we believe that Patsy Duke – a career commercial banker – is the only Federal Reserve insider that understands how the global money markets actually work.
Story continues below…
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The High Cost of Lower Prices
Show us a human being…and we will show you why democracy is a bad idea and why contrarian investing is a good one. From the South Pacific this morning comes news that a tribe in Melanesia believes that Britain’s Prince Philip is immortal.
“As unlikely as it sounds, the people of Yaohnanen and surrounding villages worship 85-year-old Prince Philip as a god,” reports the Daily Telegraph. “They believe him to be the son of an ancient spirit who inhabits a nearby mountain, on the island of Tanna.”
“You must tell King Philip that I’m getting old and I want him to come…
12Jun2008 | Daily Reckoning | Comments Off | ContinuedGood Grief
The world keeps turning and the resources get used up. It’s really quite simple.
Despite that fact, the debates rage over Peak Oil, Peak Food and peak everything else. It’s about as sensible as rearranging deck chairs on the Titanic. So the “experts†continue to debate whether or not resources are running low. But the evidence is pretty clear, at least to this trader.
In the past year, we have seen the oil and agriculture markets explode. And this could be just the beginning of the rally, not the end, as some would have you believe. Personally, I think we are about halfway…
8Jun2008 | Whiskey and Gunpowder | Comments Off | ContinuedU.S. Heading for a Recession? Maybe It’s Time to Get Your Financial House in Order…
A recent study done by CNN Money indicates that only 19 percent of the 1,000 Americans polled believe that the nation will avoid a recession in 2008. What is more telling is how this collective fear is beginning to mold the financial behaviors of people across the nation.
One of the many questions asked in this survey stated the following:
In the past 12 months, have you been spending about as much as you did before on most things, spending more, or cutting back on your spending compared to twelve months ago?
As you can see, 48 percent of those who took the…
21Jan2008 | S. Oakes | Comments Off | Continued
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