The Fed is making an even graver mistake now if it thinks the economy can handle a measured reduction in QE.
We have entered a new chapter in the short and checkered history of central banking. This paradigm shift, as yet unaddressed in the textbooks, changes the basic policy tools that have traditionally defined the sphere of macroeconomic decision-making.
Friday's release of disappointing August payroll numbers should have been a jarring wake-up call warning Wall Street that the economy has been treading on thin ice.
On June 30, U.S. authorities announced a stunning $9 billion fine on French bank BNP Paribas for violations of financial sanctions laws that the United States had imposed on Iran, Sudan and Cuba. Although BNP is not technically under the jurisdiction of American regulators, the fine was one of the largest ever issued.
The Fed's traditional "dual mandate" seeks to balance the need for job creation and price stability. But Yellen clearly sees jobs as her top priority. Any hope that she will put these priorities aside and move forcefully to fight inflation when it officially flares up should be abandoned.
While her tenure thus far may feel like a seamless extension of the Greenspan/Bernanke era, investors should understand how much further Yellen is likely to push the stimulus envelope into unexplored territory.
Recently Federal Reserve Governor Jeremy Stein commented on what has become obvious to many investors: the bond market has become too large and too illiquid, exposing the market to crisis and seizure if a large portion of investors decide to sell at the same time.
Thus far 2014 has been a fertile year for really stupid economic ideas. But of all the half-baked doozies that have come down the pike, an idea hatched last week by? CNBC's reliably ridiculous Steve Liesman may in fact take the cake.
It would be a stretch to say that this past winter made a greater impact on the economy than the average of the 10 snowiest winters since 1967.
Piketty's primary achievement lies in conjuring a seductively simple and emotionally satisfying idea: people with money to invest (the wealthy) will always get richer, at a faster pace, than everyone else.
These two months together annualize at 6.6% inflation. So already there is very little wiggle room, if any, before the Fed reaches the point where even its dovish leaders should admit that inflation is a problem.
We can't ignore it anymore - the markets are rigged. The LIBOR scandal broke almost two years ago, and the banks found responsible for manipulating that key index are still dealing with lawsuits.
While there is wide agreement that the cost of college education has risen far faster than the incomes of most Americans, there is some debate as to whether the quality of the product has kept pace with the price.
So far, 2014 has been a paradoxical year for gold. Many investors aren't even aware that it has rallied almost 8%. On the rare occasion that the financial media mentions the yellow metal, it is only in the context of comparing the recent rise to last year's decline.
The red flags contained in the national and global headlines that have come out thus far in 2014 should have spooked investors and economic forecasters. Instead the markets have barely noticed.
The main problem that the Fed has been facing over the past few months is that the official unemployment rate has been drifting downward towards 6.5%, the level at which it had previously determined would trigger a shift toward monetary tightening. But the rate has been falling not because people are getting jobs.
While it's easy to conclude that the Polar Vortex has been responsible for an excess of school shutdowns and ice related traffic snarls, it's much harder to conclude that the it's responsible for the economic vortex that appears to have swallowed the American economy over the past three months.
As the financial crisis took hold, a flood of new and inexperienced buyers entered the market, creating an opportunity for unscrupulous metals dealers to swindle their way to massive profits.
Mark Zuckerberg, the owner of Facebook, is not your typical corporate CEO. Through a combination of technological smarts, timing, luck, and questionable business ethics, he became a billionaire before most of us bought our first cars.
In our current age of spin and counter-spin, there is no contortion too great for a politician to attempt. On occasion, however, the threads of one story become entangled with another in a manner that should deeply embarrass, if the media were sharp enough to catch it.
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for September 22nd, 2014 | John Ransom
In Other News: Bi-Partisan Agreement that Debbie Wasserman Schultz is a Horrible Person | Michael Schaus
In Other News: State Department Covers Up for Hillary – Asks IRS How to Destroy Hard-Drives | Michael Schaus