zero percent interest rate

The Fed’s Theme Song (Still): “Saved by Zero”

Janet Yellen Playing Ben Bernanke’s Favorite Tune Maybe, someday Saved by zero I’ll be more together Stretched by fewer Thoughts that leave me Chasing after My dreams disown me Loaded with danger Maybe I’ll win Saved by Zero Holding onto Words that teach me I will conquer Space around me Maybe I’ll win Saved by...
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Fed: ‘Hurry to Buy Stocks Before They Crash Again’

Turning Keynes Inside Out “Markets can stay irrational longer than investors can stay solvent.” –John Maynard Keynes In light of The Federal Reserve’s unprecedented, going-on-six-year campaign of monetary stimulus, perhaps the question to ask isn’t, “why are stocks trading at record levels?” Rather, it’s “why aren’t stocks even higher?” My answer:  because at least some...
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The NEW Sub-Prime Loan Market: Bigger Than Ever

“Countrywide” Redux:  The Age of  the Sovereign Sub-Prime Loan Remember sub-prime loans, the ones being handed out like candy to apparently penniless Southern Californians (and Nevadans and Floridians and . . )? With such features as “negative amortization,” whereby the Buyer could opt to re-pay as little per month (or nothing!) as they wished, with the...
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Coming: the Golden Age of Venture Capital?

Wall Street Allocating Capital  . . . to Itself Once upon a time, Wall Street’s reason for being (“raison d’etre,” if you want a fancy term) was to efficiently allocate capital from suppliers of capital (aka “savers”) to those who could most productively use it — typically young, promising companies. At least, that’s how I...
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Predicting Interest Rates — and Stocks!

Actually, the following joke is obsolete:  I can tell you exactly where interest rates are going, because Ben Bernanke told me (and everyone else):  zero, for a long time. So, just substitute “stocks” for “interest rates.” Enjoy . . . Einstein dies and goes to heaven only to be informed that his room is not yet...
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(More) ZIRP Side Effects: Unmotivated Sellers

Paid-Off House as Piggy Bank To the already long list of unintended consequences of zero percent interest rates (“ZIRP”) — squeezed savers, flush investment banks (and bankers), volatile commodity prices, etc., etc. — add one more:  lack of (home) Seller motivation, especially amongst long-time owners with little or no debt. Why the lack of motivation? Because they...
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