Trump’s Fed position befits a banana republic

By Rob Cox
May 6, 2016

The reality-TV veteran turned White House contender says Janet Yellen is following the right monetary policy, but he’d replace her because she’s not a Republican. That’s not only a break with decorum. It’s a red flag that a President Trump would meddle in central-banking affairs.

Review: Stop blaming the world’s central bankers

April 8, 2016

That’s the message of a new book, “The End of Alchemy”, from the former governor of the Bank of England, Mervyn King. It doesn’t completely wash. Low rates bear much responsibility for seeding the financial crisis - and it was central banks, after all, that set them.

Negative yielding bond world favours the agile

March 1, 2016

German 10-year bond yields are in sight of last year’s record low, 0.05 percent. There’s no reason why they can’t fall lower than this given Japan just auctioned comparable debt at a sub-zero yield. Investors need to be nimble to make money in this world of negatives.

Chancellor: Buffett’s U.S. optimism long-term valid

March 1, 2016

In his annual shareholder missive, the Oracle of Omaha rejects arguments, by Larry Summers and others, that America has entered a period of “secular stagnation.” However, the Berkshire Hathaway chairman’s optimism looks misplaced for now thanks to distortive monetary policies.

Chancellor: Negative rates, negative implications

February 12, 2016

The latest weapon brandished by central banks is supposed to boost economic growth and ward off deflation by punishing cash hoarders. In practice, this radical policy damages credit creation, fuels bubbles, threatens civic freedoms and spooks the living hell out of markets.

Fed stress-tests idea of negative interest rates

February 2, 2016

That’s part of the “severely adverse” scenario that big U.S. banks have to run this year to satisfy regulators. The ECB and now the Bank of Japan are giving it a try. The Fed has started pushing rates upward – but going negative is becoming a very plausible downturn assumption.

Cox: How gun control is like zero interest rates

By Rob Cox
January 5, 2016

A White House order to require more dealers selling their wares at gun shows to conduct background checks has kicked off the third firearms bubble of Obama’s presidency. As in previous booms, bringing forward future demand stores up trouble down the road for the weapons trade.

Managerial competence makes the difference in 2016

By Rob Cox
January 5, 2016

Markets are getting choppier. Capital is becoming more expensive in the world’s largest economy. Globalization is taking big knocks. Economic growth is middling. Good managers will distinguish winners from losers as much as valuable assets do from lousy liabilities.

Fed liftoff will reinvigorate key market gauges

December 15, 2015

Everyone used to watch fed funds futures like hawks (or doves). Seven years of zero rates made them a less important indicator. Along with Eurodollar futures and other traded hints on rates and inflation, though, they are due fresh attention – even if their meaning has morphed.

Jobs and wages mean rate hikes are go!

December 4, 2015

Barring market meltdown at home or abroad, American job creation in November looks strong enough to allow Janet Yellen’s Fed to lift interest rates this month after seven years near zero. The shift in stance is overdue, but unexciting growth will keep the central bank wary.