Ben Bernanke was seen driving away from the Federal Reserve's Open Market Committee Meeting this week with his head bouncing to Def Leppard's " Pour Some Sugar On Me" which he has personally picked as the Fed's theme song for 2012. He has also privately predicted the DJIA to hit 20,000 shortly but only if there is world wide economic collapse. If things get much worse the no telling how high the market can go. But just in case, Bernanke believes increasing the value of expressionists paintings may be the boost the job market needs.
Friday, September 14, 2012
Thursday, September 13, 2012
Economic Fuel Gauge
Generational employment as a percentage of the population have been declining since the dot.com bubble in 2000. Then the unprecedented downward momentum caused by the financial crash in 2007 left the chart hanging just over the gains forty years ago. The chart is sort of an economic fuel gauge which illustrates the dilemma the Fed is in. Their accommodations cannot seem to find the economic gas tank for the broad middle class and one can sense Bernanke is nervous. He does not want the current consolidation turning into a ledge for further declines. "Do something" is now the policy impetus. Yet all accommodative QE programs have come from what has been called "the double down on trickle down" method. Feeding the top so they might feed the rest is leaving the chart hanging.
Friday, September 7, 2012
Market Good News Bad News
Conditional unlimited bond buying is the new spin to calm the markets being put forth by ECB President Mario "whatever it takes" Draghi and German President "not so fast" Merkel. So far the EU participants have been in lip sync to show solidarity as they conjure a bond buying program which may ultimately be so conditional as to be worthless. Besides the directional talk to date, nothing has actually ever been implemented by the ECB.
The U.S. has a stagnant work force producing marginal GDP and a Fed policy to promote cheap credit to a financial institutional structure which has proven to be incapable of financing commerce but excellent at blowing up any investments their trading operations pick. The EU has not only a slowing economy but the added stress of solving cross country bailouts without the political ability to craft long term solutions.
Stock markets tend to be in front of good news and behind in bad news. The good news is of coarse the coordinated sensitivity to market direction by world finance leaders. The bad news is the coordinated sensitivity to market direction by world finance leaders.
Economic growth and the resulting race of asset price value to catch future value is a product of expanding participation by a broad base economy. Inflating asset value as a replacement for growth is dangerous in that it is an "all in" strategy based the past performance old growth economic models.
The markets are "all in" in front of the good news but are behind the bad news.
The U.S. has a stagnant work force producing marginal GDP and a Fed policy to promote cheap credit to a financial institutional structure which has proven to be incapable of financing commerce but excellent at blowing up any investments their trading operations pick. The EU has not only a slowing economy but the added stress of solving cross country bailouts without the political ability to craft long term solutions.
Stock markets tend to be in front of good news and behind in bad news. The good news is of coarse the coordinated sensitivity to market direction by world finance leaders. The bad news is the coordinated sensitivity to market direction by world finance leaders.
Economic growth and the resulting race of asset price value to catch future value is a product of expanding participation by a broad base economy. Inflating asset value as a replacement for growth is dangerous in that it is an "all in" strategy based the past performance old growth economic models.
The markets are "all in" in front of the good news but are behind the bad news.
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