Market Commentary

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Bernanke!

Author: David Kotok, Post Date: August 24, 2009

NMarkets will like the removal of uncertainty now that President Obama has committed to Fed Chairman Bernanke’s reappointment. Confirmation by the US Senate is expected without much difficulty. History shows that uncertainty is the enemy of markets. Much speculation about Bernanke and a possible Summers succession has swirled in market analysis circles. That is over. […]

Oil. The Price Forecasts Vary. Why?

Author: David Kotok, Post Date: August 23, 2009

Oil flirts with $75 dollars a barrel.  Forecasts range from a low in the $40s to $85-90 before the end of the year.  Inventories on or off the water, futures and ETF-driven trading forces derived from dollar strength or weakness, China’s and other emerging market countries’ demand, mature countries’ economic recoveries, fuel substitutions when natural […]

September! Also, Closing the Lehman Gap

Author: David Kotok, Post Date:

From the Wall Street Journal of August 11: “For investors, the period between Labor Day and Halloween is proving an annual fright show. And no one knows why. It was, of course, in September last year that Lehman collapsed and everything fell apart. But then it was also September-October 2002 that the last bear market […]

Moody’s, Munis and Cousin BABs

Author: David Kotok, Post Date: August 16, 2009

In their August 13  “Special Comment” Moody’s outlined the current condition of the state budgets and of the various revenue sectors like airports, toll roads, higher education facilities, and hospitals.  Nearly two years into a recession, the report is not pleasant reading. Expenditure budgets are being cut.  Tax receipts continue to arrive below projections, which […]

Ricardian Equivalence

Author: David Kotok, Post Date: August 14, 2009

The Obama-Summers-Geithner federal deficit financing plan assumes success because it ignores the principle of "Ricardian equivalence."  And it is based on the assumption of the Alan Blinder-Robert Solow argument that over a longer term the outcome of government borrowing will be an offsetting higher wealth effect.   It will fail.   We could see an […]

Leens Lodge Report

Author: David Kotok, Post Date: August 9, 2009

Back to back in Maine.  First the NBEIC meeting at Samoset.  Then the annual Shadow Fed fishing weekend at Leen’s Lodge.  Rules in both places are Chatham House, which means no direct quotations without permission of the speaker.   We are permitted to offer some summary observations without naming names. Bullets follow. There is very mixed […]

A Modest Proposal for Executive Compensation

Author: Bob Eisenbeis, Post Date: August 7, 2009

Public and Congressional ire has risen up again on the heels of a report from NY Attorney General Andrew Cuomo detailing the payment of bonuses by key Wall Street firms who had received taxpayer TARP money. In several instances those firms made huge losses in 2008 but paid out more than $27 billion in bonuses, […]

When Is a Bubble a Bubble?

Author: Bob Eisenbeis, Post Date: August 4, 2009

For many years the Greenspan orthodoxy at the Fed was that central banks should not attempt to prick asset bubbles but instead stand ready to clean up the mess when markets did their job.  Fed staff and reserve bank presidents dutifully repeated that mantra.  But after Greenspan’s departure, governors (or former governors) such as Rick […]

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