Tuesday, 17 November 2015

The U.S. Economy Was Already In Recession The Last Two Times The US Dollar Strengthened This Much

Chart of The Day: Number of Central Government Employees Since Erna Solberg became Prime Minister of Norway

Thursday, 12 November 2015

Chart of The Day: How Norges Bank Defaulted on Key Mandate

* Norges Bank is Norway's central bank.


A short history lesson: After the last remaining link to gold was abandoned in 1971 (and the krone became paper money backed by absolutely nothing, i.e. fiat money), the Norwegian krone's value has collapsed compared to gold due to the tremendous increase in the money supply (the quantity of fiat money) orchestrated by Norges Bank, the government and (absent) regulators ever since.

Wednesday, 11 November 2015

The Madness of Euzone's Chief Monetary Crank

Draghi is speaking again today taking the opportunity as he always does to push his central planning infused political agenda:

Meanwhile, he is also hard at work creating another debt boom which can only make the damage already done by faulty monetary policies and insane government spending and debt accumulation that much worse. You simply cannot solve a debt problem by creating more debt.

Picture by The Telegraph

No amount of "economic and monetary integration", "pooling more sovereignty" and "common governance" can sort out the catastrophic mess the ECB and the commission have created together with governments. In fact, it will only make matters even worse. A good start would therefore be to end ECB's monetary policy making altogether sooner rather than later. 

Tuesday, 10 November 2015

Friday, 6 November 2015

Chart of The Day II: The Improving US Unemployment Rate as a Contrarian Indicator

Chart of The Day: Will Stocks Plummet Too?

"If the rise in the prices of stocks and real estate is considered as a gain, the illusion [of inflation] is no less manifest. What makes people believe that inflation results in general prosperity is precisely such illusory gains. They feel lucky and become openhanded in spending and enjoying life. They embellish their homes, they build new mansions and patronize the entertainment business. In spending apparent gains, the fanciful result of false reckoning, they are consuming capital" - Ludwig von Mises

Wednesday, 4 November 2015

Risk-Free Rate and Market Risk Premium Used by Analysts for 2015

Professor Pablo Fernandez and colleagues from the University of Navarra - IESE Business School have just released the annual survey Risk-Free Rate and Market Risk Premium Used by Analysts for 2015 (access 2014 and 2013 here).

In addition to the survey numbers themselves (personally, I use the money supply growth rate as the minimum "risk-free" rate rather than a government bond yield), I especially liked these two comments from the report,
Most of the analysts use a Risk-Free Rate (RF) higher than the yield of the 10-year Government bonds. A reason for it and for the huge dispersion may be the activity of the European Central Bank (ECB). The risk-free rate (RF) is the required return to Government bonds when nobody (not even the ECB) manipulates the market.
A comment about the Quantitative Easing (QE) implemented by the ECB in 2014, 2015... It is just a strange synonym for “print a lot of money (euros) and buy many, many bonds of the countries in the EU”. By doing so, bond prices increase (and bond yields decrease) dramatically. Some people refer to this “QE” as “market abuse of the ECB”, “market manipulation”, “altering competitive markets”, “expropriation of savings”… We agree with all this definitions: they are clearer than “QE”.

Echo that!

Read the full report here.  

Tuesday, 3 November 2015

And You Thought it was only (expected) Monetary Policy that Drives Stocks Up These Days?

Zero Hedge reports:
Twitter Proves "Innovation" Is Alive And Well By Copying FaceBook's "Like", Replaces "Star" With "Heart"

Monday, 2 November 2015

Chart of The Day: Wooops, this is even worse than September 2008

The PMI for October slumped nearly 13.5% y/y, even worse than the 12.2% collapse in September 2008. Must be good news for stocks....