Why did the Fed raise rates? For the opposite of the reason they gave…

Summary: The Fed Governors told us they planned to raise rates, and months ago told us when they would do so. But their explanation of why they raised rates makes little sense. We can see their thinking by looking at the economic projections released at the Open Market Committee meetings. They raised rates not because … Continue reading Why did the Fed raise rates? For the opposite of the reason they gave…

What Will the US Do in a Recession? Look to Japan for Answers…

Summary: In a previous article I listed the powerful tools the US government would deploy during the next recession. Today we discuss something more important: will they work? We can look to Japan for an answer. Their great stagnation began with the 1989 crash, 11 years before the tech bubble burst and began America's new … Continue reading What Will the US Do in a Recession? Look to Japan for Answers…

The Fed will use these power tools during the next big recession

Summary: Six years after the recession ended, we are due for another recession. Many experts say that the government is “out of bullets” to fight the next severe downturn. That’s quite false because 2008 marked the start of a new era in which our leaders manage the business cycles using strange and awesome tools. We’ll … Continue reading The Fed will use these power tools during the next big recession

Updating the recession watch; & what might the government do to fight a slowdown?

Summary: The economic data continues to darken. Let's review the situation -- updating the recession watch -- and guessing what might be the government's response to a recession. It's an era of new normals, so we should expect steps that would have been considered incredible or even mad a decade or two ago.  {1st of … Continue reading Updating the recession watch; & what might the government do to fight a slowdown?

Let’s ignore another warning from the BIS. Do we enjoy paying for burst bubbles?

Summary: As one market after another drifts off into bubble valuations, a few institutions warn of the consequences. As usual (we've done this so many times), we ignore them -- our passivity and ignorance earning our role as the deep pockets paying for the resulting damage. This post looks at a few of the warnings … Continue reading Let’s ignore another warning from the BIS. Do we enjoy paying for burst bubbles?