We, along with the BIS and some others understand that market disciplines must be allowed to “discipline,” to operate in free form. Our caution to Bernanke (and Obama) in 2010 to please refrain from further intervention was ignored; that is a shame. We now have a rigged system; for example, Q1 GDP is revised considerably lower and equities erupt. Too much.
The most generous thing that could be said about Bernanke is that he gave us borrowed time, but a time that has been mostly squandered.
The Fed acted appropriately, even splendidly early on. We were one of the first to say so. But this went to their head. That is the problem.
No one individual, no planner can effectively direct resources in a modern economy. Picking winners is a loser’s game. And so, we are now at a point where the end of this particular game may prove to be so corrosive, so disruptive, that we surrender all that we have tucked under our belt, so far this “recovery.”
At this center we generally convert economic insight to FI price change, and reveal a bit of that in this blog. That has gone well past years but went very poorly the past month.
A friend forwarded this statement from Stan Druckenmiller (Stan – one of the best in the business): "It has become harder for me, because the importance of my skills is receding. Part of my advantage is that my strength is economic forecasting, but that only works in free markets, when markets are smarter than people. I watched the stock market, how equities reacted to change in levels of economic activity and I could understand how price signals worked and how to forecast them. Today, all these price signals are compromised and I’m seriously questioning whether I have any competitive advantage left.”
Well Stan, we’ll join you at the sidelines; just for now.
Robert Craven
The most generous thing that could be said about Bernanke is that he gave us borrowed time, but a time that has been mostly squandered.
The Fed acted appropriately, even splendidly early on. We were one of the first to say so. But this went to their head. That is the problem.
No one individual, no planner can effectively direct resources in a modern economy. Picking winners is a loser’s game. And so, we are now at a point where the end of this particular game may prove to be so corrosive, so disruptive, that we surrender all that we have tucked under our belt, so far this “recovery.”
At this center we generally convert economic insight to FI price change, and reveal a bit of that in this blog. That has gone well past years but went very poorly the past month.
A friend forwarded this statement from Stan Druckenmiller (Stan – one of the best in the business): "It has become harder for me, because the importance of my skills is receding. Part of my advantage is that my strength is economic forecasting, but that only works in free markets, when markets are smarter than people. I watched the stock market, how equities reacted to change in levels of economic activity and I could understand how price signals worked and how to forecast them. Today, all these price signals are compromised and I’m seriously questioning whether I have any competitive advantage left.”
Well Stan, we’ll join you at the sidelines; just for now.
Robert Craven
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