MMT: The Court Astrologer’s Dream

It’s not Modern; it’s not Monetary; and it’s really not much of a Theory

If ever there was a prime example of a belief in the Fairy Gov-a-Mother being mixed with a bad case of warmed-over monetary crankdom, the suddenly, newly- fashionable doctrine which masquerades under the portentous-sounding name of ‘Modern Monetary Theory’ – ‘MMT’, for short – must surely qualify.

For a shortened version of this as a podcast, go to: Soundcloud Apple Podcasts under ‘Cantillon Effects’ or TuneIn at:- https://bit.ly/2CXfEpy

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Central Banking: It’s alive!!

In his recent posting on Linked In, entitled, ‘The death of macro-prudential’, Stuart Trow of the EBRD delivered a well-aimed broadside at the pitiable conduct of the Bank of England and elaborated on some of the malign consequences of its catalogue of errors. Without wishing to single him out unduly for criticism for a piece with whose broad outlines I concur,  I see it as a prime example of where even those who are not wholly in thrall to the cult of ‘Whatever it Takes’ often miss the critical features of that cult’s essential evil. Continue reading

The Turn of the Tide

Have we finally reached the high-water mark of the current bull run? Is all the good news in – and the last, most shaky, marginal buyer along with it, inveigled in by the bounce from February’s brief Vol-au-Vent? If so, what are the implications? Where are the trigger points? How will any weakness manifest itself?  Continue reading

How the VIX Seller Lost his Shirt (updated)

Previously featured by the good folk at Real Vision, my look at how the narrative we construct around the events of the market is all important in determining how we react to it and, hence, what further ramifications these might involve.

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Pump’n’Dump

One of the prevailing stories which nervous market participants whisper to each other at bedtime involves the timely appearance of the Fairy God-mother, hastening to Earth from Tir Nan Og to launch another multi-trillion round of money-printing the instant that our over-inflated asset prices suffer any meaningful setback. This comforting narrative, however, presupposes three key elements…

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Cryptomania

As the phenomenon which is Bitcoin continues its transition from the geek press, past the financial columns and onto the front-pages of the newspapers, a little sober reflection may be in order. Are its proponents’ claims justified when they tell us that, far from being yet another instance of the Madness of Crowds, it will soon replace all our existing monies and supplant our present ways of doing business? And, if they are right, will that redound either to their benefit or to ours, or to a different set of actors entirely?

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It was THIS big…

A theme which frequently pops up in current financial and economic commentary is that of the burgeoning levels of outstanding debt under which all too many nations are said to groan. Typically, reference will be made to the percentage of GDP which this mountain of obligations entails, usually by way of putting it into a context which is deliberately slanted to be alarming. But how valid is this comparison? Continue reading

Easy Money, Hard Times

Though the connexion is not always explicitly drawn, one obvious corollary of the perceived current shortfall in corporate investment spending is to be found in the lacklustre nature of the gains being recorded in something called ‘productivity’.

This latter deficiency is often said to have ‘puzzled’ the Good and Great who presume to be able to influence such matters for the better, but one can readily identify factors which implicate the policies of those same would-be helmsmen of the economy, themselves, in the discouragement they offer for capital formation and by the incentives they afford for less than ideal practices among businesses, consumers, and governments, alike.

For a downloadable PDF version of this article, please click: 17-10-27 Easy Money

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Shifting Sands

There are signs that not only is money beginning to circulate more rapidly through cash registers everywhere, but that Corporate America is beginning to make good some of its recent, much-cited lack of physical investment and, conversely, is starting to eschew some of its contemporary over-indulgence in financial engineering.

It may be early days to be jumping to overly grand conclusions, but the last few quarters’ trend nonetheless bears watching. Continue reading

A recent miscellany

Does it make sense to plot multi-decade asset prices on a linear scale? How reliable are macro ‘profit’ estimates? Why is the curve flattening and what will a reduction in Central Bank reserve balances mean for assets?

S0me recent short snaps from my LinkedIn & Twitter feeds plus you can watch my latest update ‘China: Unbalanced’  here, on YouTube Continue reading