Wednesday, December 25, 2013

Merry Christmas

It is a beautiful sunny day here, and the family gathering has been relatively peaceful (I have been prohibited from talking politics).

Best wishes for whatever solstice-based holiday you're celebrating!

Wednesday, December 11, 2013

Taper -- not... Competitive bubble blowing at the Fed

What do you wanna bet Janet doesn't have the cojones to taper (much)?

Wall Street will undoubtedly exert its control over the West Coaster, to get her trained.

But more importantly as John Hussman points out it is the relationship between the stock of assets on the Fed's balance sheet and GDP that matters, and a mere slowing of asset purchases won't much change that.











This confirms my view that rates will stay low for years to come, that we are following in broad outline the Thirties, and that a return to "normal" rates will not occur until a resolution of the Crisis is within sight (ZIRP persisted in the Great Depression until about 1942).