“Central banks were created to be the banks for banks,” said the CIO. “They were structured to influence the economy by increasing or decreasing the attractiveness of lending money.” If central banks wanted to spur banks to lend to the real economy, they reduced the interest rate they could earn from parking their money at the central bank. If they wanted to reduce bank lending, they increased the attractiveness of m

Hope all goes well… “I am the king of debt. I do love debt. I love debt and I love playing with it,” stammered The Donald, lips pursed, sitting in his sandbox, now nearer than ever to toying with mankind’s most prodigious pile of the stuff. “I would borrow, knowing that if the economy crashed, you could make a deal,” he cried, knowing all too well that if you owe someone $1bln it’s your problem, but if you owe them $

“Not a week goes by without someone extolling the virtues of the equity market because there’s no credible investment alternative with interest rates near zero,” said Stanley Druckenmiller, the investing legend. “If one applied the average interest rate settings of Volker and Greenspan using standard Taylor rules, today’s Fed Funds rate would be 3%; this is the least data-dependent Fed in history,” he continued. “Thi

Hope all goes well… “Amazon and Facebook are two of the top GDP destroyers,” said Lithium, hands-free on Highway 1. “They’re run by brilliant guys, obsessed with innovation, creative destruction.” Their earnings were great; frightening for competitors. “Apple was a GDP destroyer, but no longer, they’re too large, they’ve saturated the market.” Apple’s performance sucked tailpipe. “Think deeply about what these earnin

Overall: “We have created new tools to determine whether an economy may be pursuing foreign exchange policies that could give it an unfair competitive advantage against the United States,” announced the Treasury, late Friday. “China, Japan, Germany, and Korea will be closely monitored as a result of a material current account surplus combined with a significant bilateral trade surplus with the United States. Taiwan w

“Best day of my life,” said Jackson, my oldest, fresh off the field, eyes ablaze. I smiled, seeing something new, asked him to explain what happened out there. “It’s hard to describe,” he quickly replied, then went quiet, considering, processing. “Coach Coleman told me to stop waiting for perfect shots, and start taking imperfect ones. Which didn’t make much sense, and made me nervous because I didn’t want to screw u

Here we go again. Iron ore prices surged 15%, extending the rise from December’s low to 70%. Copper jumped 5%, not quite exceeding the March highs. Cement jumped too. As did most things that the Beijing boys need for a building bubble. Even oil exploded higher, climbing 4.8% to new 4mth highs. And remember, just last Sunday the largest conclave of Trustafarians on planet earth failed to limit its production. The Doha

Hope all goes well… “On Thursday this bull market will become the 2nd longest in American history,” bellowed Biggie Too. “2,607 days old,” barked Biggie, not missing a beat. “Gonna surpass the 1949-1956 raging run. The 1990-2000 bubble was the longest.” From 2009 to the end of QE in Oct 2014, a 50/35/10/5 weighted portfolio of equities, bonds, commodities and cash returned 98%. But since then it’s fallen 3%. “First w

“Tell me what price means,” instructed Yoda, high in the Rockies. I sat quietly. “It means both nothing and everything,” he whispered. “Price means nothing if you must sell or buy.” And I considered the rising tide of global capital chasing diminishing returns, the crowding of positions, the scarcity of transactional liquidity. “But price means everything if you want to understand what is real in the world.” The majo

“People work in order to convert their time into a unit of account,” he said. “We call that money, and it’s an invention that allows us to store time.” Most people have stored little or none. So when they receive money, they quickly purchase necessities; food, shelter, health care. “People who are able to save money inevitably purchase real estate, stocks, bonds – all of which are alternative vehicles for storing tim