2013

Fama has been doing research on QE for the last six months. And he basically tells Santelli that QE in the Treasury market is an asset swap of short-term government debt for long-term debt. Fama’s depiction of QE is accurate and mirrors…

Apple set another record for revenue in its fourth quarter of 2013 according to its latest earnings. However, margins at Apple have receded such that profit fell for yet another quarter. Overall, Apple’s strategy now seems to be geared…

News links for 28 Oct 2013

The PMI survey shows the first fall in manufacturing output in the US since September 2009. Eurozone PMIs are moving in the other direction.

I believe policy makers at the the Federal Reserve have soured on the marginal effectiveness of quantitative easing as a primary tool for monetary policy. As interest rate policy is still not effective with the policy rate at zero, forward…

Summary: Pippa Malmgren discusses the eurozone with Bloomberg below, calling attention to the diverging interests within the eurozone as a critical factor adding stress despite the relative calm we have witnessed in markets of late. Her…

News links for 25 Oct 2013

So imagine you are a moderate FOMC member. This is the economic situation you face and the trade-offs in terms of policy tools.

Federal Reserve Governor Stein: The traditional, pre-crisis framing of the question went something like this: Should policymakers rely on ex ante measures to lean against potential financial imbalances as they build up, and thereby lower…

It is worth noting that currently both markets are pushing deviation extremes only seen four times previously. The difference has much to do with the "secular market" within which these deviations occurred. The current deviation from the…