Monetary Policy

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Texas Housing Market Meets The Fed’s ‘Game of Thrones’ Economy

The latest issue of Tierra Grande is out, and it contains more examples of the Federal Reserve's fingerprints on the Texas housing market. This new batch of evidence is contained in an article titled 'Game of Homes - The Supply-Demand Struggle'. What is thoroughly entertaining is that the two Dallas Fed employees (both recent college graduates apparently) working on this latest missive appear to completely ignore their employer's responsibility for the distortions in the Texas housing market while making a complete mockery of the economics profession. Collaborating with a PhD from TAMU, they lay out [...]

By | 2016-11-20T13:26:48+00:00 October 23rd, 2016|Economy, In the Press, Politics, Real Estate, Spin Cycle|0 Comments

Fed Hikes Rates, Four More Increases Projected In 2016?

As expected the Federal Reserve hiked the benchmark Fed Funds rate to 0.25 percent, putting the target rate between 1/4 to 1/2 percent. This comes after 9 years of driving rates into the basement! Interestingly the Fed forecast rate of 1.375 percent remained unchanged. This implies that the Fed will hike rates 4 more times next year. Will that actually happen? I doubt it! I'll give you another reason why...   The truth of the matter is that the Fed was backed into a corner so they took the best opportunity they had to try [...]

Jobs, Interest Rates, Fed Folly & Housing

It was another interesting week, culminating in a sleeper of a jobs report. The November employment report from the BLS showed that the U.S. gained another 211,000 jobs. Of course the only problem is anyone with a functioning brain knows by now that the headline jobs numbers are a complete farce. The sad reality is that there are still 94.4 million Americans NOT in the labor force, bringing us to a labor force participation rate of 62.4 percent. For most Americans there is no real recovery in the job market as wage growth has remained [...]

Hovnanian Shares Plummet 14 Percent, Homebuilders Standing At The Precipice

"Oh, what a tangled web we weave, when first we practice to deceive." Shares of Hovnanian Enterprises fell out of bed again today, plummeting 14 percent to close at $1.71 per share. Hovnanian Enterprises (HOV) is now down a whopping 50 percent YTD, with no signs of the hemorrhaging ending anytime soon. If anything, the drop in Hovnanian's stock seems to be picking up steam. Other homebuilders were clipped today as well. Beazer Homes (BZH) dropped more than 6 percent today after reporting tepid third quarter results, and several other builders were selling off with Hovnanian's [...]

Dallas Fed – Texas Manufacturing Activity Continues To Weaken

The March readings for manufacturing activity in Texas showed continued weakness in the Lone Star State. Readings from the March report show that the Texas production index posted at -5.2, the first negative reading in two years. Other measures of manufacturing activity were negative in March as well. The general business activity index declined 6 points to -17.4. The hours worked index posted at a -5.3. The finished goods index prices index fell to -9.8. Altogether it was a pretty miserable report for Texas manufacturing activity with numbers posting at post-recession lows. Remember how low [...]

Financial Repression – Interview With Dr Lacy Hunt

This is a thoughtful interview on the subject of financial repression with Dr. Lacy Hunt of Hoisington Investment Management out of Austin Texas. Hunt is a former employee of the Dallas Federal Reserve and a former chief economist with one of the largest global banks (HSBC). Hunt has been following the policy errors of the Federal Reserve for years, and here he discusses the financial repression that is still gripping the global economy. As Hunt explains, monetary policy is not the solution for our global indebtedness. Global central banks have facilitated $35 trillion in new [...]

By | 2015-02-23T21:27:43+00:00 February 22nd, 2015|Economy, Energy & Utilities, Markets, Video|0 Comments

Rig Counts Continue To Plummet – US Loses 90 More Rigs, Texas Drops 58 In Latest Weekly Survey

The U.S. rig counts continue to plummet in the face of falling oil prices. The latest update from Baker Hughes hows that the U.S. lost another 90 rigs in the latest weekly report. The U.S. Rig total is now 242 rigs lower year-over-year. The oil rig count fell by 94 this week to 1223 total oil rigs operating in the U.S. Texas accounted for 58 of the idled rigs in the latest survey, with the Permian Basin shedding 27 rigs in the nation's largest producing oil field. The Texas rig count is now 147 rigs [...]

What The Oil Market Can Tell Us About Fed-Driven Asset Bubbles

For all of the talk about deleveraging in America, it's interesting to see that both the national debt and total credit market instruments tell a rather different story. That's because the Federal Reserve has been goosing the markets to keep them afloat while they exercise their undisclosed and primary mandate which is to keep the market from tanking and keep their friends in a job. If last week's market action wasn't telling enough, Jim Grant offered a bit of perspective on what's really going on. The problem with Fed-driven asset bubbles is that they always [...]

By | 2016-02-02T12:26:08+00:00 December 21st, 2014|Economy, In the Press, Markets, Politics, Real Estate, Spin Cycle, Video|0 Comments

Fisher: Tampering With Fed Is “Dangerous”

You have to love the continuous jawboning and hypocrisy of modern central bankers. In this case it's Dallas Fed chair, Richard Fisher, telling some rather large whoppers as he attempts to justify current Federal Reserve policy. I love the bit about about the Fed focusing on the "real economy", and how the unemployment rate is "the single best" indicator of where our economy is headed. I also find it interesting that Mr. Fisher is proud to talk up the growth in the Texas economy, when he has to know that it's the resurgent energy sector [...]

Was QE Successful? Depends On Who You Ask

With the end of QE3, it's worth asking the question of whether the Federal Reserve's fiat currency experiment was successful? Did all of those bond and treasury purchases lead to sustainable economic growth here in the United States? Who benefited from the Fed's monetary interventions in the markets? With the Bank of Japan now picking up the torch and going all-in at the monetary casino, I think it's worth asking whether the the Fed's experiment really benefited the American economy? Sure, that $4.48 trillion on the Fed's balance sheet helped bail our or largest banks, [...]

By | 2016-09-29T13:39:35+00:00 November 3rd, 2014|Economy, Housing Policy, Markets, Politics, Real Estate, Spin Cycle|0 Comments