The Economic Contrarian Blog

“The number of Americans filing new claims for unemployment benefits unexpectedly fell last week to a near four-year low, suggesting the labor market recovery was gaining steam.” “Other government data on Thursday also pointed to sustained momentum in the economy, with builders breaking more ground on new residential projects in January and little signs of [...]

US STOCKS-Futures gain after Greece approves deal Here is this morning’s headline. It strikes me as odd that it seems not to matter that the original bailout didn’t work, that Greece didn’t meet their obligations, that Germany is attempting a non-military take-over of a sovereign nation, that Athens is burning to the ground at the [...]

There are worries that the end of Operation Twist, scheduled for this summer, could introduce volatility and catch the legions of investors in 30-year bonds off guard. “If the Fed ends the Twist ‘cold turkey’ at the end of June,” asks Ward McCarthy, chief financial economist at Jefferies & Co., “will long-term rates snap higher? [...]

This is another example of the kind of conversation I have with myself. There’s a part of me (Contrarian Me) that can’t help but question the government’s actions in regards to the economy, and doesn’t think the economy is really getting any better. Another part of me (Conformist Self) really wants to believe all the [...]

After reading numerous financial news articles telling me repeatedly how we are experiencing the long awaited recovery of our economy, I entered into one of those typical conversations I have with myself that goes something like this:  Self: What do you think you are doing?  Me: What do you mean? Self: You think you know [...]

Why do I write and talk about liquidity so much?  When I speak of liquidity I am really referring to the creation of new money, particularly as it relates to stimulating financial markets or economic activity. Whether it is liquidity from the Fed’s printing press, or from our government’s growing debt, or from easing interest [...]

Those of you who have read my writings before this blog began know I have been critical of the Federal Reserve for many years — well before the 2008 recession. In particular, I was critical of past chairman Alan Greenspan. Even before our economic calamity besieged us, I opined that Mr. Greenspan would go down [...]

Wall Street jumps after China data By Chuck Mikolajczak NEW YORK (Reuters) – Stocks gained in early trading on Tuesday as Chinese data fueled the belief the government may move to stimulate growth, overshadowing recent credit downgrades in Europe and a mixed bag of big bank earnings. So the DOW was up over 100 points this [...]

Yesterday the maker of Wonder Bread, Twinkies and other bakery products, Hostess Brands, announced that they would be filing for bankruptcy (for a second time). Hostess was a major household name when I was growing up. Although, not so much in my household as my mother did not believe their pastry products were healthy. Many [...]

From last week’s chart of the Federal Reserve’s balance sheet, I would add one quick note. If you want to know how “Operation Twist” would make a new Fed chart appear, you can expect to see the dark blue (traditional or short-term U.S. treasuries) decline, while the light blue (long-term U.S. treasuries/debt) and the red [...]