Watch the latest video at video.foxbusiness.com Comment On Friday Jim Bianco was on Fox Business discussing the economy and the Federal Reserve. To view the video, click on the picture above. To view any of our recent interviews click here.
Business Insider – The Greatest Investing Lesson Of The Past Five Years 999 respondents answered the question, “Which has been the greatest investing lesson for you during the past five year?” Nearly 60 percent of respondents believe that “central banks and governments will continue to bail out troubled creditors.” This is somewhat troubling. There’s an… Continue reading What Have We Learned In The Last Five Years?
CNBC – Jim Cramer Was Right—They Knew Nothing! The summer of 2007 was a time of intense stress in the financial markets. Credit-rating agencies had begun to mark down large amounts of asset-backed securities and collateralized debt obligations linked to subprime mortgages. Quant funds spent about a week in meltdown mode. The subprime market was… Continue reading Cramer Was Correct!
The Washington Post – Neil Irwin: The real surprise in the Fed’s 2007 transcripts: How much they knew, how little they understood In making sense of the newly released transcripts from the Federal Reserve’s 2007 policy meetings, let’s get one thing out of the way first. Prediction is hard, as Yogi Berra said, especially when… Continue reading The Federal Reserve Understood Nothing In 2007
The New York Times – CHRISTINA D. ROMER: The Fed Drives Best at Higher Speeds The pledge to keep rates low, even if inflation edged above 2 percent, is particularly consequential. For the last several years, the Fed has acted as if 2 percent were not just a target but a ceiling that should never… Continue reading The Federal Reserve’s Actions
<Click on chart for larger image> Comment The FOMC transcripts note “laughter” whenever it occurs during a meeting. The chart above counts up the total number of such instances in each meeting. An example from the June 27-28, 2007 FOMC meeting is transcribed below: CHAIRMAN BERNANKE. Thank you. Well, we appear to be in considerable… Continue reading FOMC Funnies
Reuters – Fed official alleges Geithner may have alerted banks to rate cut In the summer of 2007, as storm clouds gathered over the world’s financial system, then-New York Federal Reserve President Timothy Geithner allegedly informed the Bank of America and other banks about the possibility the U.S. central bank would lower one of its… Continue reading Geithner’s Role In 2007
Comment The chart above shows that earnings estimates are almost always too high and come down over time. Keep this in mind when you hear strategists say the market is cheap based on 2013 or 2014 earnings estimates. They are probably correct if those estimates are accurate, but they rarely are. Bloomberg.com – Profits at… Continue reading Earnings
The Wall Street Journal – Money Magic: Bonds Act Like Stocks Pension funds across the U.S. are desperate to overcome low interest rates and churn out returns big enough to pay future retirees. Now some hedge funds and money managers are pitching something they see as a Holy Grail: a strategy that often uses leverage… Continue reading Bonds Get Some Love!
Bloomberg.com – Investors Most Optimistic on Stocks in 3 1/2 Years in Poll International investors are the most bullish on stocks in at least 3 1/2 years, with close to two- thirds planning to raise their holdings of equities during the next six months, according to a Bloomberg survey. As the global financial and business… Continue reading Contrarians Take Note – Stocks Get Some Love!
The Wall Street Journal – GOP Moves to Extend Debt Ceiling Republican Plan Would Offer Three-Month Reprieve; Leaders Vow to Fight for Spending Cuts Elsewhere House Republican leaders Friday proposed extending the federal debt limit by three months, marking a significant shift in GOP strategy that could reduce the market-rattling risk of the U.S. running… Continue reading More On The Debt Ceiling
CNBC – El-Erian: ‘New Normal’ May Be Nearing an End The “new normal” of slow economic growth, high unemployment and government debt problems could be over soon, Pimco’s Mohamed El-Erian told CNBC on Thursday. El-Erian, CEO and co-CIO of the firm, coined the phrase. “We said in 2009: three to five years,” he told “Squawk… Continue reading Is The New Normal Over?