Estimating the impact of monetary policy normalisation on assets
A New Age of Policy Transparency The Federal Reserve, beginning in 2011, began a new era of transparency that began with the publishing of economic and monetary policy projections from Open Market...
View ArticleDear Ms Yellen: Raise the inflation target
Dear Ms Yellen: Congratulations on both your appointment as well as becoming the first woman to head the Federal Reserve. This will potentially make you, at times, the most powerful and important...
View ArticleWhy do stock markets crash?
With the S&P 500 off 5% from all-time highs, and the 10-day volatility in the 87th percentile, some observers are anticipating a 1987-style market correction. In this piece, we analyze the...
View ArticleWhy do the Japanese want growth?
It seems to be a universal truth that growth is good. There almost can be no bad growth. But what exactly is the purpose of growth, and why do we want it? Instead of viewing economic growth as the...
View ArticleOnly Bernanke knew Oil is not inflation
In April of 2011, Ben Bernanke was universally lambasted and lampooned for claiming that inflation, which was accelerating and running above 3%, was “transitory”. He used this view to justify loosening...
View ArticleSay ‘Good-bye!’ to the “New Normal”
“Secular Stagnation.” “The New Normal.”. “The New Neutral.” “Lower for Longer.” These are the phrases which have been used to characterize the U.S. economic situation, and by proxy, interest rates. The...
View ArticleBreaking the real rho even
The only rational way to value capital is by estimating your required risk premium against a safer benchmark expected return. This is why the correlation between investment grade bonds, Treasury yields...
View ArticleThe Time For a Hike is September
Back in December of last year, in the midst of the downdraft of oil, I wrote that the deflation in headline prices we were about to see was symmetrically opposite to what we saw in the energy-driven...
View ArticleUS Recession Callers Are Embarrassing Themselves
Through a combination of quackery, charlatanism, and inadequate utilisation of mathematics, callers for US recession in 2016 are embarrassing themselves. Again. The most prominent reason for recession...
View ArticleCentral Banking’s Fundamental Misunderstanding of Inflation
Central banks operate under the premise that real growth is exogenous, except for policy mistakes in moderating inflation and the business cycle. The assumption is that they have dominating influence...
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