BELLAIRE CAPITAL MANAGEMENT, LLC
  • Home
  • About Us
    • Company News
    • Our Team
  • Services
    • Financial Planning >
      • Stage 1: Early Adult Planning
      • Stage 2: Planning as An Adult
      • Stage 3: Pre-Retirement Planning
      • Stage 4: Post-Retirement Planning
    • Small Business Planning >
      • Small Business Continuity Planning
    • Investment Strategies >
      • Saving For Retirement
  • Kevin's Corner
    • Investing Wisely Series...
    • Planning Wisely Series
  • Market Viewpoints Blog
    • ReCalc Blog
    • Register for Updates
  • Contact Us
  • Events

Our clueless Fed...

3/12/2014

 
Kevin Spires, CFA, FRM
hattip to zerohedge.com

In an article on the "so-called" Wealth Effect, Chris Casey of the Mises Institute lays bare the lack of logic behind one of the greatest fallicies in modern Economics.

As Casey quotes, the wealth effect is where:
 
"Higher equity prices will boost consumer wealth and help increase
confidence, which can spur spending.
— Ben Bernanke, 2010[1]

In other words, higher equity market prices lead to greater shorter term economic growth - and hopefully greater longer term economic growth.  Casey persuasively argues that monetary and fiscal policies that induce more spending in the short run (and less savings) do not help but rather harm the economy - especially past the initial boom in equity prices.

Personally, I think the Federal Reserve can't be seen to do nothing during an economic downturn.  If they did nothing and the economy recovered on its own their game would be up - which I think is basically that of the Wizard of Oz - all sound, fury, and action - but no actual magic and which makes the situation worse in the long run.

Rosenberg on chance of recession in next year or two...

3/4/2014

 
Kevin Spires, CFA, FRM

Business Insider has an article by Advisor Perspective's Robert Huebscher giving David Rosenberg's outlook on the odds of a recession over the next year or two.  The best quote is Rosenberg saying that 

The U.S. economy is incredibly resilient, he said, and he agreed with the adage 
that a recovery never “dies of old age.”  It takes a “negative shock” to  start
a recession, he said ­‑- “and those always have the Fed’s thumbprint  on
them.”

This is directly in line with my adage that expansions do not "commit suicide but rather it is always murder."  The slope of the Treasury Yield Curve is a great predictor of recessions and Federal Reserve, with its near total control of the shortest maturities, is the one in control of that slope.

Read more:  http://advisorperspectives.com/newsletters14/David_Rosenberg-No_US_Recession_in_Sight.php#ixzz2v25SJBe3

    Contact Us

    RSS Feed

    Archives

    March 2017
    May 2016
    December 2015
    March 2014
    February 2014
    December 2012
    October 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012

    Categories

    All
    2012 Election
    2016 Election
    Bank Credit
    Consumer Credit
    Corporate Profits
    Economic Outlook
    Employment
    European Debt Crisis
    Fed Balance Sheet
    Fed Watch
    Housing
    Leaders
    Liquidity
    Manufacturing
    Money Supply
    Stock Market Technicals

Contact Us
​All rights reserved by Bellaire Capital Management, LLC
​​LegalPrivacy PolicyDisclaimer
Live Chat Support ×

Connecting

You: ::content::
::agent_name:: ::content::
::content::
::content::