Capital Markets and the Velocity of Buffer Zones: Recent Economic Developments Using QE Lenses
In the summer of 2011 we published some commentaries about the development of financial black holes. The argument of this commentary goes as follows: Central banks and governments around the world adopted the Powell doctrine of overwhelming force to defeat the enemy...
“Collapse, Avoid a Relapse, Don’t Relax”: Prospects, Downside Risks, Central Banks, and Existential Threats
The words quoted in the title above, were pronounced by Christine Lagarde (the head of the IMF) at the Davos annual economic conference. She was referring to the EU experience in 2012. Without a doubt, the Euro zone almost collapsed last year, and her recommendation...
The Prospects for Real Estate: Part II of Assessing the Prospects for 2013
In this week’s commentary we offer our assessment of a positive outlook for the real estate sector in 2013. We believe that real estate will outperform most – if not all – of fixed income investments in this environment of financial repression. We anticipate all real...
The Triumph of Central Banking?
It is an honor to host Chairman Paul Volcker’s speech on Central Banking, as this week’s commentary. The speech was given in 1990 during the Per Jacobsson Foundation Lectures series. During his tenure as Chairman of the Federal Reserve Bank, the US regained its...
Uber Alles, the Intersection of Basle and Chicago: A Conversation with Moses, Solon, William Gladstone and William Jennings Bryan
I boarded the non-stop flight from Basle, Switzerland to Chicago. It was destined to be an exciting flight due to the persons sitting around me and the topics of their discussions. Given that life is short, let’s start with dessert (conclusion) first. As Chairman...
Majoring in the Minors: Economic Realities and Phantom Diversions
In this commentary, we will discuss examples of how misguided policies and debates focus the public’s attention to minor issues, with the result being that the causes are not addressed, and hence the economic pain to be excruciating as years goes by. We will start...
Smoking Mirrors and Angelic Demons: Assessing the Prospects of 2013, Part I
The renewal of the swap lines among the major central banks was a footnote for the financial markets and for the financial publications in the last couple of days. However, and as we have pointed out in the past, it is one of the most crucial lines that has sustained...
Could we Start Experiencing a Normalization of Dislocation? An Assessment of Risks
In the last few days, some reports have been circulated - by prominent Wall Street banks –which tell us that things will return to normal in 2013. With all due respect we disagree with such an assessment for the following four fundamental reasons: First, the total...
A Falsis Principiis Proficisci: Do we Plan for the Future by Setting Forth the Wrong Principles?
We have all faced situations where everything is about politics. Unfortunately, it seems that we have not learned yet that while everything is politics, politics is not everything. The EU this week tried to “solve” the impending crisis. All that it accomplished was to...
The Chastising of the Markets: The Slippery Slope of Declining Confidence
About ten days ago Germany reported its latest deterioration in business climate. German companies expressed significant dissatisfaction with current business conditions. Most probably they have start comprehending that the disintegration of the Euro may have...
