Archive for June, 2008

The Contour of the Markets: A Prognosis

Monday, June 30th, 2008

An outline of what is in store for the next 6-8 months is starting to take shape.  The major issues are the US presidential election, the end game in the Iranian crisis and what the ultimate harvested crop sizes will be.  For stocks, it seems clear that we are in a bear market.  No not […]

UPDATE: Please Do A Surprise 50bp Rate Hike!

Thursday, June 26th, 2008

There is an additional argument I did not mention in the post below of June 6th for the Fed to keep rates unchanged as they did yesterday.  That argument is that banks, many of which are tottering on the brink of insolvency, need a steep yield curve in order to ‘earn’ their way out of […]

Nancy “Antoinette” Pelosi Says Let Them Eat Cake

Wednesday, June 18th, 2008

W held a press conference today to set up a fight with democrats over energy that will play into the elections this November.  He did this by calling on Congress to eliminate barriers to producing new energy off our coasts and in Alaska, among other things.  The elitist democrat response was predictably to say that […]

Ethanol Madness Continues

Thursday, June 12th, 2008

In early 2007 I wrote this entry about Bush’s State of the Union speech in which he very unwisely staked our nation’s future on corn-based Ethanol (and Congress obliged with the Energy Independence and Security Act of 2007 [loud guffaws and tears rolling down cheeks at the title]).  Well it is no secret that all […]

Dodd Exemplary of Vacuity of Democrat Worldview

Tuesday, June 10th, 2008

You cannot make this stuff up.  When asked about the windfall profits tax being discussed by the geniuses on Capitol Hill Senator Christopher Dodd basicall backed congressional review of the profits of every business in the United States of America. Dodd:  “Anything over 8-10 dollars a barrel profit is very good, everyone knows that.  The […]

To Lower the Price of Oil, Raise Fed Funds Rate

Friday, June 6th, 2008

It is amazing how much nonsense is thrown around by people on CNBC.  Dennis pleading with the president of NYMEX to raise margin requirements so speculators cannot take such big positions.  Congresspeople talking about curbing speculators (see below).  Can we really so stupid as to blame the messenger rather than attacking the causes? It is […]

The Economic Function of Speculators

Friday, June 6th, 2008

I have to address some silliness we have been seeing more of recently, people like Senator Byron Dorgan, saying things like we need to clean up markets to reign in speculators and only have the hedgers have access.  Dorgan isn’t the only one with an alarming lack of understanding of how markets work sitting in […]

Please Do A Surprise 50bp Rate Hike!

Friday, June 6th, 2008

Though it seems counter intuitive, the best thing the Fed can do for the health of the American economy right now would be to announce an immediate inter-meeting 50bp rate hike, perhaps after telegraphing it for a few days first.  The immediate effect would be to inflict massive losses in oil and other commodity speculation […]

Ex-Fed President McTeer Questions Feds Timing

Friday, June 6th, 2008

This morning on CNBC, former Dallas Fed President McTeer made a very important point about the recent history of the Fed.  If you look at the fact that Crude Oil has just jumped by well over $10/bbl since yesterday mornings imprudent comments by ECB Governor Trichet, and that the Euro is now stronger against USD […]

Where are the Adults at the Fed?

Thursday, June 5th, 2008

On Tuesday morning, Chairman Bernanke made a watershed appearance in which he stated that the Fed was aware of the delterious effect of the weak dollar and promised that they were on top of it.  This is the statement everyone was looking for after the April meeting of the Monetary Policy Committee but did not […]