Maybe Dallas Fed President Fisher will be the next Fed Chairman. Who knows. Below some highlights from his speech. Full version here.
“My colleagues and I are professionally beholden to beware of short-term fixes that might contradict, or place in jeopardy the long-term duty and credibility of the central bank.”
“As I have said repeatedly, we have filled the gas tanks of the economy with affordable liquidity,” he said. “What is needed now is for employers to confidently step on the pedal and engage the transmission that will use that gas to move the great job-creating machine of America forward.”
“If I believe further accommodation or some jujitsu with the yield curve will do the trick and ignite sustainable aggregate demand, I will support it,” he said. “But the bar for such action remains very high for me until the fiscal authorities do their job, just as we have done ours. And if they do, further monetary accommodation may not even be necessary.”
Why didn’t Soc Gen listen to one of the best Strategists earlier this year? Albert Edwards, one of the few realists out there, has been rather bearish in his views especially during 2011. Edwards has been calling the SPX to revisit the lows of March 09, and even break lower to a fair value of around 450. The many problems Europe is facing now, were pointed out by Edwards earlier this year. Why didn’t Soc Gen listen more to him, especially when he is employed by them. Couple of charts by Albert Edwards from Zero Hedge;
With the Stock Markets down heavily in August, even the wealthy are now starting to feel the pain. Gallup reports;
Upper-income Americans’ economic confidence was badly shaken in August, with 80% saying the economy is “getting worse,” up from 66% in July. This is the first month since the financial crisis of late 2008 and early 2009 that upper-income Americans are more pessimistic about the future direction of the U.S. economy than other Americans.
More reading here.
While we try digesting all the press releases coming out of various Eurozone countries today, all trying to tell us Europe is saved, let’s have a recap of some of the aspects regarding the European crisis and the Nationalism. By Stratfor;
Before 1492, Europe was a backwater of small nationalities struggling over a relatively small piece of cold, rainy land. But one technological change made Europe the center of the international system: deep-water navigation.
The ability to engage in long-range shipping safely allowed businesses on the Continent’s various navigable rivers to interact easily with each other, magnifying the rivers’ capital-generation capacity. Deep-water navigation also allowed many of the European nations to conquer vast extra-European empires. And the close proximity of those nations combined with ever more wealth allowed for technological innovation and advancement at a pace theretofore unheard of anywhere on the planet. As a whole, Europe became very rich, became engaged in very far-flung empire-building that redefined the human condition and became very good at making war. In short order, Europe went from being a cultural and economic backwater to being the engine of the world.
At home, Europe’s growing economic development was exceeded only by the growing ferocity of its conflicts. Abroad, Europe had achieved the ability to apply military force to achieve economic aims — and vice versa. The brutal exploitation of wealth from some places (South America in particular) and the thorough subjugation and imposed trading systems in others (East and South Asia in particular) created the foundation of the modern order. Such alternations of traditional systems increased the wealth of Europe dramatically.
But “engine” does not mean “united,” and Europe’s wealth was not spread evenly. Whichever country was benefitting had a decided advantage in that it had greater resources to devote to military power and could incentivize other countries to ally with it. The result ought to have been that the leading global empire would unite Europe under its flag. It never happened, although it was attempted repeatedly. Europe remained divided and at war with itself at the same time it was dominating and reshaping the world.