Tag: government

Ben Bernanke interviews from 2005-2007………

This goes to a post I did back in May,

Notice every metric they are now forecasting is worse than their expectations in January? This goes back to Bernanke saying in 2007 he thought the housing crisis would “be contained” and “would not effect overall economy”. The Bernake Fed has been consistently overly optimistic in its forecasts only to then have to lower them.

Now, the reason for being optimistic is obvious, to instill confidence in a fear ridden environment. But, after a while that strategy begins to backfire as folks begin to discount everything the Fed says as they begin to expect actual results to come in worse than expected. Then it becomes a “how much worse” guessing game.

I get the whole transparency effort vs Greenspan’s ramblings, but if we are going to do it this way, then the transparency has to be 100% honest and not an attempt to steer investor sentiment in a particular direction. In that case, the transparency is simply “transparent manipulation”.

Now, I also understand that no estimates are perfect, BUT, when over the course of a few years they almost to a 100% rate err in the same direction, then it is either intentional, OR the methodology to make them is flawed. Either scenario from the Fed is bad.

Just give it to us straight Ben, we can handle it far better than you think we can…

Disclosure (“none” means no position):

Ben Bernanke interviews from 2005-2007………

This goes to a post I did back in May,

Notice every metric they are now forecasting is worse than their expectations in January? This goes back to Bernanke saying in 2007 he thought the housing crisis would “be contained” and “would not effect overall economy”. The Bernake Fed has been consistently overly optimistic in its forecasts only to then have to lower them.

Now, the reason for being optimistic is obvious, to instill confidence in a fear ridden environment. But, after a while that strategy begins to backfire as folks begin to discount everything the Fed says as they begin to expect actual results to come in worse than expected. Then it becomes a “how much worse” guessing game.

I get the whole transparency effort vs Greenspan’s ramblings, but if we are going to do it this way, then the transparency has to be 100% honest and not an attempt to steer investor sentiment in a particular direction. In that case, the transparency is simply “transparent manipulation”.

Now, I also understand that no estimates are perfect, BUT, when over the course of a few years they almost to a 100% rate err in the same direction, then it is either intentional, OR the methodology to make them is flawed. Either scenario from the Fed is bad.

Just give it to us straight Ben, we can handle it far better than you think we can…

Disclosure (“none” means no position):

Alan Blinder, a Professor of Economics and Public Affairs at the Woodrow Wilson School and co-director of Princeton`s Center for Economic Policy Studies, discusses the financial crisis.

Disclosure (“none” means no position):

So we know the Fed missed the housing bubble and then underestimated its severity. Remember Greenspan’s (in)famous remark that “housing bubbles were local phenomena and present no risk to the greater economy”? We also know they underestimated the severity of job losses and the economic decline.

I guess the only question left after reading this is…..how can Bernanke be so sure of anything he is saying, especially when their recent track record at predicting future events has been stunningly more wrong than right? Shouldn’t he have a “Plan B”?

WSJ Op-

Disclosure (“none” means no position):

So we know the Fed missed the housing bubble and then underestimated its severity. Remember Greenspan’s (in)famous remark that “housing bubbles were local phenomena and present no risk to the greater economy”? We also know they underestimated the severity of job losses and the economic decline.

I guess the only question left after reading this is…..how can Bernanke be so sure of anything he is saying, especially when their recent track record at predicting future events has been stunningly more wrong than right? Shouldn’t he have a “Plan B”?

WSJ Op-

Disclosure (“none” means no position):

From 6/30/09

Intro:
“Amid the deepest recession of the postwar era, the Federal Reserve faces one of the gravest challenges of its 96-year history.

Janet Yellen, President and CEO of the Federal Reserve Bank of San Francisco, assesses the state of the economy while explaining the thinking and the actions behind some of the Fed’s precedent-shattering initiatives to rescue a financial system in crisis and help jump-start economic growth.”

Disclosure (“none” means no position):

For those who do not wish to read, here are the crib notes:

• 2009 GDP -1% to -1.5%
• 2010 GDP 2.1% to 3.3%
• 2011 GDP 3.8% to 4.6% (if you buy that, I got a bridge to sell you)
• Unemployment 9.8% to 10.1%
• Only a modest decline in unemployment in 2010 to 9.5% to 9.8%
• 2011 unemployment 8.4% to 8.8%
• 2010 & 2011 inflationrates 1.5% to 1.7% (dilusional)
• Longer run inflation 1.7% to 2% (still dilusional)

FOMC 6.24.2009

Disclosure (“none” means no position):

Didn’t we learn a thing or two last year when the SEC banned sort selling and the market continued to tank?

From the WSJ:

Oil-market analysts question the idea that speculative investments have pushed up prices. They attribute the current volatility to uncertain prospects for economic recovery, and the long-term rise to an oil industry that has struggled to boost supply in response to the surge in demand from China, India and other developing economies.

“The spread of daily oil-price movements around the monthly average is because no one has a clear expectation of what the future price is going to be,” said David Kirsch, an oil-market analyst at PFC Energy. “Putting limits on financial investment is only going to have a limited effect on overall volatility.”

In Congress, though, there is growing consensus that investors could be distorting prices. A recent report from the Senate Permanent Subcommittee on Investigations blamed speculators for driving up wheat prices in recent years, and recommended the CFTC enforce position limits on index traders in the wheat market.

In a statement, CFTC Chairman Gary Gensler said the agency will hold a public hearing to gather views from consumers, businesses and market participants on proposals to impose limits on trading in energy future contracts. The CFTC’s proposed rules would also require hedge funds and swap dealers to report holdings — including those traded over-the-counter and at overseas exchanges — in a separate and routine way.

Energy traders say they are concerned that the regulations could stunt trade, increase costs in the marketplace and potentially scare away some players. “Speculators play a crucial role in the futures market by providing liquidity to hedgers,” such as oil producers and airlines, said Addison Armstrong, director of exchange-traded markets at TFS Energy Futures, a Stamford, Conn., broker. “Traders don’t want rules that are going to change the game.”

The interventionism represents a significant shift for both the CFTC and the U.K. government, both of which have previously taken a more free-market approach and stopped short of calling for action on speculators. “Where there has been unfair speculation or abuse of the market then we would be prepared to act,” Mr. Brown said in a briefing with journalists.

Mr. Brown and his French counterpart called on the International Organization of Securities Regulators to look at improving transparency and the supervision of oil-futures markets. An umbrella organization for global securities regulators, IOSCO helps to set international standards and advises national bodies on regulation. In March, it set out guidelines on how regulators can beef up their supervision and enforcement of commodities.

The French and British leaders hope to get backing for their drive at the summit of the Group of Eight leading industrial countries that begins in Italy on Wednesday.

Politicians around the world are worried about the effect of rising oil prices on the recovery potential of their recession-hit economies. In recent weeks, companies in various industries have complained that the rise in oil prices has, or will, hurt their profits.

Can anyone define “speculators” for me? Can anyone tell me what the price of oil “should” be based on fundamentals? Can anyone tell me what variables go into that fundamental analysis?

I ask because I have no idea. Why?

The price of oil takes into account (among others):

Didn’t we learn a thing or two last year when the SEC banned sort selling and the market continued to tank?

From the WSJ:

Oil-market analysts question the idea that speculative investments have pushed up prices. They attribute the current volatility to uncertain prospects for economic recovery, and the long-term rise to an oil industry that has struggled to boost supply in response to the surge in demand from China, India and other developing economies.

“The spread of daily oil-price movements around the monthly average is because no one has a clear expectation of what the future price is going to be,” said David Kirsch, an oil-market analyst at PFC Energy. “Putting limits on financial investment is only going to have a limited effect on overall volatility.”

In Congress, though, there is growing consensus that investors could be distorting prices. A recent report from the Senate Permanent Subcommittee on Investigations blamed speculators for driving up wheat prices in recent years, and recommended the CFTC enforce position limits on index traders in the wheat market.

In a statement, CFTC Chairman Gary Gensler said the agency will hold a public hearing to gather views from consumers, businesses and market participants on proposals to impose limits on trading in energy future contracts. The CFTC’s proposed rules would also require hedge funds and swap dealers to report holdings — including those traded over-the-counter and at overseas exchanges — in a separate and routine way.

Energy traders say they are concerned that the regulations could stunt trade, increase costs in the marketplace and potentially scare away some players. “Speculators play a crucial role in the futures market by providing liquidity to hedgers,” such as oil producers and airlines, said Addison Armstrong, director of exchange-traded markets at TFS Energy Futures, a Stamford, Conn., broker. “Traders don’t want rules that are going to change the game.”

The interventionism represents a significant shift for both the CFTC and the U.K. government, both of which have previously taken a more free-market approach and stopped short of calling for action on speculators. “Where there has been unfair speculation or abuse of the market then we would be prepared to act,” Mr. Brown said in a briefing with journalists.

Mr. Brown and his French counterpart called on the International Organization of Securities Regulators to look at improving transparency and the supervision of oil-futures markets. An umbrella organization for global securities regulators, IOSCO helps to set international standards and advises national bodies on regulation. In March, it set out guidelines on how regulators can beef up their supervision and enforcement of commodities.

The French and British leaders hope to get backing for their drive at the summit of the Group of Eight leading industrial countries that begins in Italy on Wednesday.

Politicians around the world are worried about the effect of rising oil prices on the recovery potential of their recession-hit economies. In recent weeks, companies in various industries have complained that the rise in oil prices has, or will, hurt their profits.

Can anyone define “speculators” for me? Can anyone tell me what the price of oil “should” be based on fundamentals? Can anyone tell me what variables go into that fundamental analysis?

I ask because I have no idea. Why?

The price of oil takes into account (among others):

Meet Cap ‘n Trade from Marketplace on Vimeo.

Disclosure (“none” means no position):

Meet Cap ‘n Trade from Marketplace on Vimeo.

Disclosure (“none” means no position):