The First Time as Tragedy
In the past, our ready predisposition to fear the worst has proven to be well-founded. Indeed, through much of the two years leading up to the Great Crash of 2008, there was all too much evidence to ignore that a kind of collective madness had gripped the whole universe of investment world and had spilled out from thence into every plot of building land and every auction house in the real world.
At the start of the year it has become wearily traditional for us pundits to offer one of two genres of prediction.
The first takes the form of a genuine—if ultimately foredoomed—attempt to lift a ragged corner of those thick shrouds of unknowability which separate today from tomorrow. The second combines such futility with a certain arch attempt to make one’s name in the event one chances upon what can afterwards be trumpeted as the inspired prediction of what the consensus presently regards as a highly unlikely event. Continue reading
Amid the relative torpor of the US holiday, it might be the moment to wax a little philosophical and ask if you, the listener, have ever noticed that so much of what passes for economic wisdom today involves the persistent overuse of the word ‘uncertainty’? Continue reading
Having already touched upon the UK’s shaky fiscal position, all that really needs to be added, now that the Chancellor has actually delivered his Autumn Statement, is a quick, ‘I told you so!’
The gloomy prospect is thus one of more borrowing, more spending, stealth tax tinkering, an ill-advised switch to industrial intervention, cost-overrun concrete pouring, and even the setting up of a special credit facility for exporters in a country hardly noted for being under-populated with banks and other lending institutions! Continue reading
Pride of place for political news outside the US must go to the UK High Court’s decision that the infamous Article 50 clause by which Brexit is to be achieved cannot take place without being subject to Parliamentary approval. Continue reading
The craziness that is Abenomics seems to have one flimsy foundation: viz., that Japan’s fiscal situation seems so dire as not to be susceptible of a rational approach. Not that this is any real excuse for the political cowardice which attempts to disguise the problem through gross financial and monetary manipulation.
Please click the link for a thorough analysis:- 16-09-29-mmm-sep-jpn
In this complimentary extract from last month’s edition of ‘Money, Macro & Markets‘, that’s the issue at which I take a detailed look. Please follow the link to access the PDF:-
In the Q&A which followed the latest Federal Reserve exercise in ostrich imitation, Janet Yellen offered up this giant hostage to fortune, if only in the spirit of she-would-say-that-wouldn’t-she:
‘Overall, I would say that the threats to financial stability I would characterize, at this point, as moderate. In general, I would not say that asset valuations are out of line with historical norms.’
Patently, if she has somehow arrived at the determination that there is no indeterminably constituted asset bubble in operation, then it figures that non-bubble asset prices cannot be out of line with their norms. Chalk one up to answering one’s own question in the affirmative.
But how much truth is there in this claim? Not very much at all as you will discover if you click on the following link to read this extract of the latest monthly ‘Money, Macro & Markets‘:
In light of the breathless anticipation which preceded the Fed Chair’s speech to her peers at Jackson Hole and cognisant of the mild state of befuddlement with which it was received, we felt it would be of interest to readers to have a translation, together with a gloss (each in bold), in order to try to remove some of the obscurities contained therein. Continue reading
As we have laid out in some detail in our professional work, it is clear that Chinese banks have entirely lost their inhibitions about creating money these past twelve months. It is equally clear that once such money is called into existence, someone must be caught in the act of holding it when a balance sheet snapshot is taken, however eager their desire to ‘pass the bad or depreciating half-crown to the other fellow’ may be and thus regardless of what the fate of that money will be an instant after the shutter has closed on the statistical camera. Continue reading