By Robert Romano According to the World Federation of Exchanges, a trade association of 58 publicly regulated stock, futures and options exchanges, the value of equities all over the world in March was approximately $57.4 trillion. This is almost $30 trillion of stock market gains globally since the financial crisis, about 97 percent above its Feb. 2009 low of $29.1 [...]
By Robert Romano — Does insurance giant AIG have the standing to sue Bank of America for fraud over some $7 billion of losses on mortgage-backed securities stemming from its acquisition of Countrywide in 2008? Bank of America is saying no, that AIG, when it accepted a bailout from the New York Federal Reserve’s Maiden Lane II program, it transferred [...]
By Bill Wilson and Robert Romano It can be said that the present day financial crisis and the broad and sweeping powers the U.S. Federal Reserve has assumed in its wake all share their origins in the very first debates Congress had over the creation of the national debt, the Fed’s precursor, the Bank of the United States, and over [...]
By Robert Romano The past 3 years the $16.7 trillion national debt has grown at an average rate of 10.5 percent, while nominal Gross Domestic Product (GDP) has averaged just 3.85 percent. This is one of the primary reasons why the debt has soared to 103.8 percent of GDP at the beginning of this year and will continue rising. The [...]
By Robert Romano — All the economic babble cannot hide one simple fact; if inflation hits, the Federal Reserve may be powerless to use interest rates as a device to rein it in. The central bank has sacrificed that policy tool in order to make sure the elite in the financial world did not have to pay the price for [...]
By Bill Wilson – David Kemper, Chairman and CEO of Commerce Bancshares, had to be kidding. He couldn’t have possibly been serious, when in a BloombergBusinessweek opinion piece, “QE Cubed: A Modest Proposal for More Fed Buying. A Lot More,” he suggested that the Federal Reserve expand its balance sheet by $30 trillion. The proposal, if real, would entail monetizing [...]
By Bill Wilson — To hear the White House tell it, the economy shrank in the fourth quarter by 0.1 percent solely because government spending was cut by $40.4 billion, largely in defense. To be fair, there is a degree of truth to that. If you factor out government spending as a component of the Gross Domestic Product (GDP), real [...]
By Bill Wilson – Let the happy talk begin. It did not take long after Barack Obama’s reelection for financial pundits to begin forecasting a miraculous economic recovery in his second term. Take Financial Times U.S. economics editor Robin Harding, who proclaims that “The headwinds that buffeted Mr. Obama’s first term — financial crisis, falling house prices, and consumers paying [...]
By Bill Wilson – Writing for the New York Times on Oct. 23, Stanford law professors Joseph Grundfest, Mark Lemley and George Triantis call for another round of quantitative easing (QE) — i.e. money-printing — by the Federal Reserve. This time however, instead of buying mortgage-backed securities or U.S. treasuries, the Stanford trio wants Fed head Ben Bernanke to begin [...]
By Robert Romano — Since the financial crisis began in Aug. 2007, one of the puzzles surrounding the Federal Reserve’s quantitative easing program — i.e. money-printing — has been why it has not led to high levels of consumer price inflation minus food and energy. In the past five years, the Consumer Price Index (CPI) minus food and energy has [...]
