Topic: Financial Markets

The Bubble That Never Was: Finance’s Definition Problem

– June 22, 2021

“That is not to say that the Teslas and the GameStops and the Bitcoins of today aren’t bubbles; they may be, due for corrections of bubble-like implosions rivaling those of our financial past. The point is, we won’t know until after – long after.” ~ Joakim Book

Economic Education, Financial Markets, Free Markets

It’s Appropriate to Demand That Intellectuals Put Their Money Where Their Mouths Are

– June 22, 2021

“Whenever I encounter intellectuals who declare that their econometric research or armchair theorizing reveals that workers are underpaid or that consumers are overcharged, I feel fully justified by responding with: ‘Prove it! Put your money where your mouth is.'” ~ Donald J. Boudreaux

Cryptocurrency, Economic Education, Financial Markets

The Decentralization Fetish

– June 21, 2021

“We must not merely assume that decentralization is always good and more-decentralized solutions are always better. Instead, we should recognize that it depends on the unique benefits of decentralization and the costs of realizing those benefits relative to more-centralized alternatives.” ~ William J. Luther

Central Banking, Financial Markets, Monetary Policy

Did the Fed Just Raise Interest Rates?

– June 20, 2021

“In the Fed’s current floor system, the rate of IOR is the key tool of monetary policy. If the Fed raised the rate of IOR, then it raised interest rates.” ~ Thomas L. Hogan

Economic Education, Financial Markets, Free Markets

This Claim of Market Failure Deserves No Credit

– June 15, 2021

“If you who claim to identify a market failure could, but don’t, voluntarily put your own money where your mouth is in an attempt to address that alleged failure, why should anyone listen to your pleas for government to coercively put other people’s money where your mouth is?” ~ Donald J. Boudreaux

Economic Education, Financial Markets, Sound Money

Sound Money Still Matters

– June 7, 2021

“By making precious metals a more integral part of citizens’ lives, state gold depositories are key to a return to sound money.” ~ Peter C. Earle

Central Banking, Financial Markets, Monetary Policy

Is the Fed Paying Banks Not to Lend?

– June 6, 2021

“The evidence shows that banks treated excess reserves as a profitable alternative to loans. High rates of IOER caused them to increase reserve holdings and decrease their loan allocations. The Fed was indeed paying banks not to lend.” ~ Thomas L. Hogan

Books, Financial Markets, History

When Crowds Go Mad

– June 3, 2021

“Much like his role model’s chief literary achievement, all is not well in this otherwise highly enjoyable book. Bernstein often resorts to simplified and unproved evolutionary just-so stories to account for the lunacy he colorfully describes.” ~ Joakim Book

Books, Financial Markets, History

The Backward-Looking Storyteller

– May 27, 2021

“History is slow, with fascinating moments and events scattered among tons and tons of mundane and inconsequential things. When we select some of them and weave them into an iconic story, we often make a mockery of the past – and ourselves a disservice.” ~ Joakim Book

Economic Education, Financial Markets, Fiscal Policy

Pocket Monsters Meet Animal Spirits

– May 24, 2021

“Lockdowns, boredom, and fiscal largesse sparked the incredible rise in Pokémon card values. But the Greater Fool Theory may already be at work.” ~ Peter C. Earle

Economic Education, Financial Markets, Inflation

Lift Your Gaze, Please: the April Inflation Overshoot is Not the Problem

– May 18, 2021

“A betting man, if he wants to remain a betting man, updates his priors. So, I side with Jason Bloom at the asset manager Invesco: ‘There is so much dislocation in the economy from the reopening and base effects from a year ago that it will take at least six to 12 months before we get a clear view of the underlying inflation trend.’ I will make a different sort of prediction, though: no matter what the future holds, the Chickens will be there to squawk about it.” ~ Joakim Book

Central Banking, Crisis, Financial Markets

To Lean, Clean, or Reign Supreme

– May 16, 2021

“After a decade or more of economic and financial events that put central banks under heavy strain – financial collapse, a slow and timid recovery, the pandemic – strange things are again amiss in financial markets. Broda and Druckenmiller are right to say that ‘the Fed seems to be fighting the last battle.’ Ironically, so are they: we’re back in the lean-or-clean debate of twenty years ago.” ~ Joakim Book