Negative Interest Rates as “Black Hole Experiment” If somebody else thinks what you think, you can’t be crazy, right? Explanation #2: you’re both suffering from exactly the same malady. Either way, it’s reassuring to read famed investor Jeremy Grantham’s latest thoughts on today’s bizarro world of negative interest rates and inflated asset prices, courtesy of...Read More
(Even) Lower Interest Rates vs. Weaker Economy “It’s too soon to tell.” –Chinese leader Mao Tse-tung, when asked — in 1948(!) — about the historical significance of the French Revolution. To accurately assess the potential effect of Brexit on the housing market, one must first identify and analyze the biggest variables. Here’s my take: Positives...Read More
Quick Answer: “It Depends — But Usually Less Than Buyers Think” “At the closing table, the Seller will walk away with a check ” and whether the money comes from the Buyer or the lender doesn’t matter.” –“Do Home Buyers Who Pay Cash Get a Discount?”; The Wall Street Journal (11/4/2010). The answer to the...Read More
Markets Now Testing 3 Hypotheses “Don’t fight the Fed.” –Wall Street mantra “Don’t fight the Fed . . . unless the Fed is out of ammo.” –2015 update(?) I don’t know if the Fed put is kaput, but the Chinese put — if there ever was one — certainly appears to be history. What I’m referring...Read More
“Collateral Damage & Unintended Consequences” Pimco’s Mohamed El-Erian is to today’s financial establishment what Walter Cronkite was to the American mainstream, a generation (or two) ago: an unofficial spokesman whose views distill and encapsulate the broad consensus. So, his dispatches these days — including his latest, ‘Central Banks’ “Responsible Irresponsibility?”‘ — automatically command attention. Half-Time at The Crash of...Read More
The Link Between 0% Interest Rates, Spiking Gold When “risk-free” cash keeps paying a guaranteed loss, then a growing number of people will, in due course, start seeking shelter elsewhere. –“What The Economist Doesn’t Know About Gold”; Seeking Alpha (6/29/2010) The above quote is from the best piece I’ve seen yet explaining why gold is...Read More
