FR, ECB, BoJ: Central Banking’s Grand Experiment

Central bankers, most of them versed in the history of the Great Depression and deflation, haven’t been exactly reading from the same hymnal for the past few years. There are signs, though, that this might be changing.

Perhaps it is merely a coincidence, but the U.S., with the most activist central bank and after more than five years of quantitative easing and a zero interest rate policy, has the best looking economy in the developed world. Europe, where Germanic austerity and central-bank timidity prevails, looks the worst. Japan is somewhere in the middle, both in terms of its economic recovery and QE.

Preliminary results of these grand monetary experiments are now in and the results are clear: More monetary stimulus equals a strongest economic recovery.

Hey, maybe this isn’t a coincidence after all?

Although the U.S.’s recovery hasn’t been ideal, it is far better than what we see in Europe and Japan. Sure, it has been slow, unevenly distributed, with soft spots and blemishes. But it is a recovery nonetheless, one that is the envy of the developed world . . .


Continues here




Category: Currency, Federal Reserve


Switzerland David R. Kotok January 15, 2015     Switzerland’s abrupt removal of the cap on the Swiss franc’s value against the euro does nothing to alter our outlook for both US interest rates and US stock markets. Subsequent commentaries will discuss the international aspects and those portfolios. Emails this morning from clients and consultants…Read More

Category: Federal Reserve, Think Tank

The Where-To-Be-Born Index

Source: The Economist

Category: Data Analysis, Economy, Psychology, Taxes and Policy

10 Thursday AM Reads

Futures are all over the place this morning. I’ll let you know what they mean arounbd 4pm today. Oh, and my morning train reads: • Passive is Massive (FT) • Why you should buy the most despised company in America (Marketwatch) see also Buy What You Hate (TBP) • Nine Reasons Why Bond Yields Are…Read More

Category: Financial Press

Category: Bailouts, Federal Reserve, Regulation, Think Tank

A Few Words with Trish Reagan

Bill Gross said he was fired from Pimco, the first time he’s publicly confirmed that he was dismissed from the firm he co-founded in 1971

Category: Video

NFIB points to upward pressure on wages

From Torsten Slok, Deutsche Bank: The next ECI will be released on Jan 30 and the NFIB data that just came out points to more upward pressure, see chart below. Also, remember that the wage data used in the Fed’s FRBUS model of the US economy is the employment cost index and not average hourly…Read More

Category: Inflation, Wages & Income

Where Apple’s Money Comes From

Source: Business Insider

Category: Consumer Spending, Digital Media, Technology

10 Wednesday AM Reads

Welcome to hump day, following an ugly inta-day reversal yesterday. Future look soft, as we seem to be taking directions from Europe. Oh, and our morning train reads: • What’s Behind the Drop in Oil Prices? Simple Economics (NYT) • Job Openings Rise Near 14-Year High In November (Real Time Economics) see also Three Signs…Read More

Category: Financial Press

1% on 10-year Note?

1% on 10-year Note? David R. Kotok Cumberland Advisors, January 13, 2015         “What if the Fed doesn’t raise rates at all this year? There’s certainly a good amount of volatility possible with the ECB meeting Jan 22, the Greek election Jan 25, and the FOMC announcement Jan 28.” – Don Rissmiller,…Read More

Category: Federal Reserve, Fixed Income/Interest Rates