Posts Tagged ‘Bank of Japan’

Notes From Underground: How Many Fed Speakers Does It Take To Make a Greenspan?

February 24, 2019

More than two decades ago, then-Fed Chairman Alan Greenspan said, “I know you think you understand what you thought I said but I’m not sure you realize that what you hear is not what I meant.”

It seems that the cacophony of Fed speakers on Friday accomplished what the so-called Oracle did by his own design .The headlines pulled out the narrative of the FED leaving a larger balance sheet and more reserves thus allowing for more liquidity in the U.S. financial system. Equity markets, bond markets and hard assets all experienced a sigh of relief and rallied in anticipation of removal of what Druckenmiller referred to as the double-barrel approach of FED tightening policy. Fed Vice Chairman Richard Clarida spoke about the FED‘s use of balance sheet and forward guidance dynamics as two exceptional tools the Fed used to combat the Global Financial Crisis. If policy was already at the “effective lower bound” the Fed may invoke a Bank of Japan-type policy of yield curve control (YCC) by capping the rates on longer maturities.

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Notes From Underground: Sovereign Wealth Funds aren’t like you and me (they have OPM-Other Peoples Money)

March 14, 2011

The news for most of the day was about Japan and the continuing despair as a result of Friday’s earthquake and tsunami. Markets were fixated on the problems of the nuclear reactors that were severely damaged by the tsunami and whether or not there was going to be a meltdown of the core. The talking heads were dragging out the experts from central casting. Each had an axe to grind on whether they were pro- or anti-nuclear energy. I am certainly no nuclear expert but the best research that was sent my way focused on the importance of the 72-hour period as being the most critical. Hopefully, those nuclear experts are correct and the most significant danger has passed. Many pundits offered opinions that this was the end of the nuclear energy debate for no citizens would want the reactors built in their areas.

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