Over My Shoulder | Mauldin Economics

Over My Shoulder

Peter Boockvar: “After further analysis…”

September 22, 2016

My friend Peter Boockvar sends out 2 or 3 missives a day on activities in the market, and I read them almost religiously to keep up with what is going on. He is a very astute observer of all things that have to do with economic data.
This is his comment on the Japanese central bank decision yesterday, and he makes the interesting observation that global interest rates may have finally bottomed as central banks are beginning to realize that negative rates are wreaking havoc with commercial banks. I hope our own central bank will take note and save us from the disastrous effects that negative rates would have on the world's reserve currency here in the US. Peter's note is short and sweet, as usual.

Download - 160922_Boockvar.pdf

Ted Carmichael: “The Breakdown of Faith in Unconventional Monetary Policy”

September 21, 2016

This is from Ted Carmichael, the respected former chief economist of J.P. Morgan Canada, summarizing the increasing discomfort with what is being called UMP (unconventional monetary policy) by a growing group of insiders. I read a rather harsh indictment from former Fed economist Jason Cummins this week, which I will probably also send out. The irony is that even as the pushback from credible people (not including your humble analyst, whom the central bankers would ignore) just seems to increase the ardor of the central bank for unconventional monetary policy ... which may eventually give us negative interest rates.

Download - The_Breakdown_of_Faith_in_Unconventional_Monetary_Policy.pdf

Ambrose Evans-Pritchard: “BIS flashes red alert for a banking crisis in China”

September 18, 2016

I have been saying for some time that I am worried about external shocks from either Europe or China causing a recession in the US when our economy is growing at barely stall speed. This column from Ambrose Evans-Pritchard's reflects on the seriously alarming BIS analysis of Chinese debt. This recapitulates the theme that was hammered on by Prof. Michael Pettis in the Sept. 2 edition of Outside the Box.

Download - BIS_flashes_red_alert.pdf