Tag Archives: Ben Bernanke

who cares what christine lagarde thinks about interest rates?

Another week has brought yet another much-publicized call for the Federal Reserve to delay raising interest rates. Yesterday, the International Monetary Fund opined that the Fed should hold off on a rate hike until 2016.

Give me a break.

Continue reading


the wall street-washington complex is alive and well

Apologies for the sporadic blogging of late. I’ve been travelling a fair amount and I also wrote a piece for CNBC.com on the Five Ways to Spot a Dead Company Walking.

Two important and closely connected events took place in the world of finance since my last post. First, former Fed chair Ben Bernanke announced that he was taking a job as an “advisor” at the massive hedge fund Citadel Group. Then the stock of Goldman Sachs hit $200 for the first time since January of 2008. You might not think these things are related, but to me, they’re inextricably linked–and extremely dispiriting.

More than half a century ago, President Eisenhower warned the nation about the burgeoning Military-Industrial Complex. That monstrous public-private hybrid now sucks up more than half of all discretionary spending. But these recent events prove that the Wall Street-Washington Complex might be even more dangerous.

Continue reading


talking about how we talk about the wall street bailouts

Recently, I was subjected to the unpleasant experience of watching the press fawn over a bunch of self-satisfied celebrities who contribute little or nothing to society. No, I’m not talking about the interminable Oscars coverage this past week. I’m talking about the reaction to the Federal Reserve meeting minutes from the 2008 financial crisis, which were released two weeks ago.

In the popular press–even at the reliably liberal New York Times–it has become conventional wisdom that the biggest mistake of that era wasn’t bailing out the most corrupt and incompetent firms on Wall Street with billions of dollars in taxpayer money. The biggest mistake was not making the bailouts big enough.

Continue reading


2014 outlook: safe as houses

Once again, I must apologize for the lack of blog updates recently. I’ve been on the road visiting company managements almost continuously for the past several months–first booming Texas, then booming China, then New Jersey and Long Island, then Texas again, and most recently Phoenix. After meeting with dozens of executives all over the country (and out of it, too) in all sorts of different industries–from retail to manufacturing to tech to finance–I was not at all surprised to see this past Friday’s big revision in third quarter GDP.

Almost to a person, corporate managers seem to be quite upbeat these days. So much so that I’m about to say something I didn’t think I would say for a long, long time: believe it or not, real estate is probably a good investment again.

Continue reading


bondage

There’s been no shortage of criticism of “Helicopter” Ben Bernanke’s aggressive quantitative easing policies. But you have to hand it to the man. He’s nothing if not determined. Against all odds and even the laws of financial physics, he’s accomplished his primary goal—juicing stock prices.

The problem is, as usual, most average investors are behind the curve.

Year-to-date, as the NY Times pointed out Sunday, more than $85 billion has been put into bond mutual funds compared to only $73 billion for stock funds. But buying bonds is not a wise strategy going forward. Thanks to Uncle Ben’s interventions and other factors, stocks are almost surely going to outperform bonds for the next three, five, maybe even ten years.

Continue reading