Posts Tagged ‘Milton Friedman’

Paul Farrell On The One Thing Buffett, Gross, Grantham, Faber, And Stiglitz All Agree On: “Bernanke Plan A Disaster”

Paul Farrell On The One Thing Buffett, Gross, Grantham, Faber, And Stiglitz All Agree On: "Bernanke Plan A Disaster"

Courtesy of Zero Hedge 

Bomb with Lit Fuse

By now it is more than obvious except to a few economists (yes, we realize this is a NC-17 term) that QE2 will be an absolute and unmitigated disaster, which will likely kill the dollar, send risk assets vertical (at least as a knee jerk reaction), and result in a surge in inflation even as deflation on leveraged purchases continues to ravage Bernanke’s feudal fiefdom. So all the rational, and very much powerless, observers can do is sit back and be amused as the kleptogarchy with each passing day brings this country to final economic and social ruin. Oddly enough, as Paul Farrell highlights, the list of objectors has grown from just fringe blogs (which have been on Bernanke’s case for almost two years), to such names as Buffett, Gross, Grantham, Faber and Stiglitz. And that the opinion of all these respected (for the most part) investors is broadly ignored demonstrates just how unwavering is the iron grip on America’s by its economist overlords. Which brings us back to the amusement part. Here are Farrell’s always witty views on the object which very soon 99% of American society will demand be put into exile: the genocidal Ph.D. holders of the Marriner Eccles building.

From Paul Farrell’s latest: Sell bonds now, Fed’s QE2 is doomed to fail.

Warning, Fed Chairman Ben Bernanke’s foolish gamble to stimulate the economy will backfire, triggering a new double-dip recession. Bernanke is “medding” too much in the economy, say Marc Faber, Bill Gross, Jeremy Grantham, Joseph Stiglitz and others. 

The Fed is making the same kind of mistakes Japan made that resulted in its 20-year recession. The Washington Post says Larry Mayer, a former Fed governor, estimates that to work it would take QE2 bond purchases of “more than $5 trillion …10 times what analysts are expecting.”

Bernanke’s plan is designed to fail. And, unfortunately, that will make life far more dangerous for American investors, consumers, taxpayers and voters.

“I’m ultrabearish on everything, but I believe you’ll be better off owning shares than government bonds,” said Hong Kong economist Marc Faber at a recent forum in Seoul. He sees a repeat of dot-com-bubble insanity today. Faber publishes the Gloom, Boom & Doom Report.

And Warren Buffett agrees,


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Bernanke Gets His Pink Slip

Bernanke Gets His Pink Slip

Courtesy of MIKE WHITNEY, originally published at CounterPunch

Question: What is the difference between a full-blown Depression and an excruciatingly "slow recovery"?

Answer--Inventories and a bit of fiscal stimulus.

Message slip

On Friday, The Bureau of Economic Analysis (BEA) reported that 3rd Quarter GDP rose by 2% meeting most analysts expectations. The real story, however, is hidden in the data. Inventories added 1.44 percentage points to the 3Q real GDP, which means that--absent the boost to existing stockpiles-- GDP would be well-below 1%. If it wasn’t for Obama’s fiscal stimulus (ARRA), the economy would be sliding back into recession.

Improvements in consumer spending were too meager to indicate a "rebound", and residential investment dropped off sharply following the expiration of the firsttime homebuyer credit. The economy is in a coma and desperately needs more government support. But if Tuesday’s midterm elections turn out according to predictions--and the GOP retakes the House of Representatives--there won’t be any more stimulus. Instead, the economy will sputter along at a snail’s pace until festering bank woes (this time, the foreclosure crisis) trigger another contraction.

There’s no doubt now, that the Fed’s efforts to engineer a sustained recovery have failed. The fact that Fed chairman Ben Bernanke is planning to resume his dubious Quantitative Easing (QE) program is an admission of failure. That said, I expect the Fed to “go large” on November 3, and purchase another $1.2 trillion of long-term Treasuries adding roughly $100 billion per month to the money supply. That should placate Wall Street and keep stock markets sufficiently “bubbly” for the foreseeable future. After 12 months of QE, unemployment will still be stuck at 10%, the output gap will have narrowed only slightly, and confidence in the Fed will have plunged to historic lows. Monetarism alone cannot fix the economy.

The fiscal remedies for recession are well known and have effectively implemented with great success for over a half century. QE is a pointless detour into uncharted waters. It is like treating a hangover with brain surgery when the bottle of aspirin sets idle on the bedstand. Why bother?

Bernanke is convinced that pouring money into the system will produce the results he wants. This is how the Fed chair pays homage to the great monetarist icon, Milton Friedman. Friedman had unwavering faith in the power of money. Here’s what he…
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The Last Chapter

The Last Chapter 

Courtesy of John Mauldin at Thoughts From The Frontline 

Two people climbing rope to birdcage containing goose and golden egg

The Last Chapter 
Let’s Look at the Rules 
Six Impossible Things 
Killing the Goose 
Home and Then Europe

This week you will get a kind of preview as this week’s letter. I am desperately trying to finish the first draft of my book and am one chapter away from having that draft. I have promised my editor (Debra Englander) that she would see a rough draft next week, and the final version will be delivered on the last day of September. More on that process for those interested at the end of the letter. But this week’s letter will be part of what will probably be the 4th or 5th chapter, where we look at the rules of economics.

There is just so little writing time left that I have to focus on that book for a little bit. I am writing this book with co-author Jonathan Tepper of Variant Perception (who is based in London), a young and very gifted Rhodes scholar with a talent for economic analysis and writing. We each write the first draft of a chapter and then go back and forth until the chapter has been much improved. Alas, gentle reader, you will only get my first draft. You will have to wait for the book to get the new, improved version. But this is the last one I have to write. And Jonathan has done all his initial chapters. We are on the home stretch.

But first, my partners at Altegris Investments have written a White Paper entitled "The New Normal: Implications for Hedge Fund Investing." It is a very instructive read. If you are in the US and have already signed up for my Accredited Investor letter, you should already have been sent a link or a copy. If not, and you are an accredited investor (basically net worth of $1.5 million or more) and would like to see the paper, or are interested in learning more about how hedge funds, commodity funds, and other absolute-return strategies might fit into your investment portfolio, I suggest you click on www.accreditedinvestor.ws and fill out the form, and a professional will get back to you. And if you live outside the US and are interested, I have partners around the world who can work with…
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DEEP THOUGHTS FROM ALBERT EDWARDS

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MUST READ: DEEP THOUGHTS FROM ALBERT EDWARDS

MUST READ: DEEP THOUGHTS FROM ALBERT EDWARDS

Deep Courtesy of The Pragmatic Capitalist

Deep thoughts here from SocGen’s Albert Edwards:

It’s almost as if the biggest credit bubble in history never occurred. Investors are increasingly convinced that a sustainable global recovery is emerging out of the wreckage. All praise to the central bankers (and Gordon Brown) for saving the world! I’m waiting till someone writes about the return of The Great Moderation and suggests Ben Bernanke is the new Maestro. Then I’ll know the lunatics have taken over the madhouse…..yet again!

When you look at the ever shrinking rate of bank lending to the private sector around the world it is clear as the nose on my face that the global economy is still very, very sick. As we have repeatedly highlighted, one key lesson from Japanese boom and bust is that banks are not the problem. Bankers bonuses are not even the problem. The pigmies that populate the political and monetary elites prefer to genuflect to the court of public opinion in a pathetic attempt to deflect blame from their own gross and unforgivable incompetence. It is the monetary and regulatory authorities that are responsible for this mess. It is not obvious in retrospect. It was obvious from the very start.

The problem is that after the boom there will be a bust. The issue now is one of deleveraging and the deflation that is starting to unfold. The problem is that Bernanke is a slave to Milton Friedman’s view of the Great Depression (at Friedman’s 90th birthday Bernanke promised that the Fed would never allow another Great Depression to occur). The Australian economist Steve Keen’s observation that “Bernanke’s dilemma is that he is living in a Minskian world while perceiving it though Friedmanite eyes explains his actions to date. It also explains why he will fail.

Source: FT & SocGen

 


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Zero Hedge

Amazon Sells $10 Billion In Bonds At Record Low Yields

Courtesy of ZeroHedge View original post here.

Yesterday morning we reported that the news of Amazon's massive, 6-part bond issuance - which came just as Morgan Stanley upgraded the company's price target to $2,800 - was enough to push Treasury yields to session high following a flurry of rate locks. Little did we know that just a few hours later demand for the offering would overflow dealer books, and the result as announced late on Monday, was the sale of $10 billion in a more than 3x-oversubscribed offering (led by DB, GS, HSBC, JPM) that included three-year notes carrying an interest rate of just 0.4%.

This means that just days af...



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Kimble Charting Solutions

Aussie Dollar Suggesting Much Higher Commodities And Yields On The Way???

Courtesy of Chris Kimble

Is the Aussie Dollar about to jump higher and signal that Commodities and interest rates are about to do the same? Possible!

This chart looks at the Aussie Dollar on a monthly basis over the past 16-years.

The AU$ created a bottoming pattern over several months in late 2008/early 2009 at (1). While creating the bottom, a couple of monthly bullish reversal patterns formed. What did commodities and yields do following the bottoming process in the AU$? Both were creating bottoms as well!

The 9-year decline in the AU$ has it testing triple support a...



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The Technical Traders

Comparing Bitcoin and Ether During the Coronavirus Pandemic

Courtesy of Technical Traders

You don’t need a crystal ball — or an economics degree — to notice the pandemic is having a historic impact on the stock market and commodities.

Gold initially went down (like all assets) in the mid-March meltdown, but is up 14% YTD. Oil bid negative, for the first time ever, as May futures traders dumped contracts to avoid taking delivery amid a lack of storage. It has since rebounded partially due to production cuts and the lifting of lockdowns. Orange juice is up over 26% YTD on adverse weather than impacted Brazil’s crop and increased consumer demand.

The most surpris...



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Phil's Favorites

Police officers accused of brutal violence often have a history of complaints by citizens

 

Police officers accused of brutal violence often have a history of complaints by citizens

Police work to keep demonstrators back during a protest in Lafayette Square Park on May 30, 2020 in Washington, D.C. Tasos Katopodis/Getty Images

Courtesy of Jill McCorkel, Villanova University

As protests against police violence and racism continue in cities throughout the U.S., the public is learning that several of the officer...



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ValueWalk

Strategy Chain Interviews ValueWalk CEO And Founder Jacob Wolinsky

By Jacob Wolinsky. Originally published at ValueWalk.

Thank you to Michael Robertson of The Strategy Chain podcast for interviewing me. See below for the episode timestamps and the full audio. TX – Jacob Wolinsky

Jacob Wolinsky worked in investing and financial journalism before founding ValueWalk, a site that curates information about investing, hedge funds, asset management, and the broader world of finance. We explore Jacob’s journey as an investor and an entrepreneur. This episode was a real treat for me because our guest was (and continues to be) instrumental to my growth as a value investor. Jacob gave us a ton ...



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Biotech/COVID-19

Antibody injections could fight COVID-19 infections - an infectious disease expert explains the prospects

 

Antibody injections could fight COVID-19 infections – an infectious disease expert explains the prospects

Antibodies (pink) attacking a virus particle (blue). STEVEN MCDOWELL/SCIENCE PHOTO LIBRARY

Courtesy of Dimiter Stanchev Dimitrov, University of Pittsburgh

Antibodies are part of us – literally.

We have billions of them in our bodies with a combined weight of about 100 grams, or about the weight of a bar of soap. If there are so many antibodies inside our b...



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Chart School

Silver volume says something is near boiling point

Courtesy of Read the Ticker

Fundamentals are important, but they must show up in the chart. And when they do and if they may matter, it is a good sign if price and volume waves show a change of character.

The Point and Figure chart below is readtheticker.com version of PnF chart format, it is designed to highlight price and volume waves clearly (notice the Volume Hills chart).

Silver ETF volume is screaming at us! The price volatility along with volume tells us those who have not cared, are starting to, those who are wrong are adjusting, and those who are correct are loading up. Soon the kettle will blow and the price of silver will be over $20. 

Normally silver suffers in a recession, maybe this time with trillions of paper money being creat...

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Lee's Free Thinking

US Southern States COVID19 Cases - Let's Give Credit Where Due

 

US Southern States COVID19 Cases – Let’s Give Credit Where Due

Courtesy of  

The number of new COVID 19 cases has been falling in the Northeast, but the South is not having the same experience. The number of new cases per day in each Southern state has been rangebound for the past month.

And that’s assuming that the numbers haven’t been manipulated. We know that in Georgia’s case at least, they have been. And there are suspicions about Florida as well, as the State now engages in a smear campaign against the fired employee who built its much praised COVID19 database and dashboar...



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Digital Currencies

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

 

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

App-etising? LDprod

Courtesy of Michael Rogerson, University of Bath and Glenn Parry, University of Surrey

Food supply chains were vulnerable long before the coronavirus pandemic. Recent scandals have ranged from modern slavery ...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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