Tag Archive for Stock Prices

Don’t Fight the ISM?

I just love correlation charts. Unlike the useless, biased spin fed to us from Wall Street’s market strategoists and egonomists, the charts are just the facts, M’am, just the facts, and you can see them for yourselves. I ran these ISM charts back to 1948 when the ISM, formerly the NAPalM, began this survey. Historically,…

Far Goes Katchadakota

Michael Derby had a piece in the Journal covering Minneapolis Fed Pres Catchadodgedakota saying the new Fed asset buys won’t do much. That’s a misdirection play, because the Fed is already levitating the market with QL 1.5. It is not what or how much the Fed buys that matters. Purchases from Primary Dealers goose the…

Fed Feeds Vicious Spiral – Professional Edition

The Fed’s balance sheet shrank dramatically last week as MBS prepayments, GSE maturities, alphabet soup paydowns, and shrinkage of that murky and mysterious “Other” category outraced the beginning of the Fed’s direct purchases of Treasuries. If the current pace of MBS payoffs continues, and it’s likely to as long as competing rates of return are…

How Durable the Economic Goods

Economists touted today’s manufactured goods gains as the linchpin of the economic recovery. Considering that manufacturing accounts for only 11% of the US economy, and durable goods is about half of that, that’s hanging a lot on this one sector. Is there any reason for bullishness on this?

Much Ado About Reserve Growth

Critics of the Fed have expressed concern about the inflationary implications of the huge expansion of the Fed’s balance sheet, particularly excess reserves. The reserve bulge was created  when the Fed expanded the alphabet soup programs in 2008. At the same time the Fed began paying interest on reserves, paying 1%, which was .75% above…