On Malaise, Credit Flows, and Historical Roots: The Watershed Period and the Echoes of Tijuana Moods
As noted from these commentary pages before, I believe that we have entered into a watershed period that will determine if in about two-three years the global economic system collapses, or experiences a rebirth. We live in historical times, and for such a time as this...
Balance Sheet Recession Reconsidered: Rebalancing Acts at a Time of Crisis
Richard Koo has been known as the father of the “balance sheet recession” theory. The essence of his theory states that monetary policy becomes ineffective when interest rates drop to almost zero, and thus government spending (fiscal policy) can only rebalance the...
Assessing the Prospects for 2014, Part III: Market Trends and Rogue Waves
In this third and final commentary regarding market trends and prospects in 2014, I would like us to concentrate on what we assess to be key-elements for equity markets as the New Year unfolds. But first, a word on bonds: Like last year, we anticipate that the...
E Pluribus Unum: A Conversation about the Past and the Future with Joseph, William III of England, Edmund Burk, Thomas Paine, and William McChesney Martin
I boarded the flight from Chicago to London. From the plane’s speakers I could clearly hear Tom Petty’s voice singing his song about “dancing in the zombie zoo”. “How appropriate”, I thought. “It seems that we have a zombie economy which dances around equities’ gains,...
A Prelude to the Historical Inevitability of Price Waves and Rhythms: Part II of Assessing Economic Prospects for 2014 and Handel’s Call for a Rebirth
Numbers reveal conceptual relationships. Price movements become powerful sources of inferential knowledge regarding changing historical conditions. The rhythms of price movements signify an historical inevitability as has been shown over the course of the millennia....
Market Prospects, Montesquieu, and Nirvana: Assessing Expectations in 2014, Part I
All signs – as initially discussed below – point to a good year for equities in 2014. Of course, we are not deaf to the voices that talk about a stock market bubble, however and as we pointed out before we do not believe that we are dealing with a bubble, at least not...
The Volcker Rule and the Safeguarding of the Financial System: Time to Wind-Down International Toxic Risk
Next Tuesday U.S. regulators are expected to approve a stricter version of the Volcker rule. The latter prohibits banks from proprietary trading which was at the heart of the financial crisis not only in 2008 but also last year when J.P.Morgan lost more than $6...
The Post-Bubble Dream and Collateral Holes: Voltaire Reviews the Iranian Deal
Last Saturday night the P5+1 nations (US, UK, France, Germany, Russia, and China) signed a limited agreement with Iran that paves the way for something which potentially would be very significant not only for security reasons but also for economic and financial ones....
Reforms in the Great Wall of Steroids: Assessing the Global Impact
Two days ago the third plenum of the Chinese eighteenth central committee meeting ended and all indications point to an historic event. Third plenums tend to consolidate power for the Chinese leader and produce significant economic and political changes. It was in...
Liquidity, Goethe, and the Magnification Effect: Growing Stronger on a Weaker Ground
Goethe’s insights into the seriousness of the problem of historical epistemology reminds us that in human history some have chosen to reject the notion of historical truth by diverting their poetic enthusiasm to heroic events that like in a legend have transformed the...
