Inconsistently consistent: too much focus on the “taper”

Interest sensitive equities got spanked yesterday as a “good” growth report shook the equity and bond markets again. Another example of good news becoming bad news for investors and renewing an already enlarged focus on what the Fed will do the next time the FOMC meets. Markets have become inconsistent with common sense but in that inconsistency, there are guided by a Fed that is “inconsistently consistent.” Continue reading

Who’s the Fish: the Qwest for Truth

Joseph Nacchio, former CEO of Qwest, recent release from prison evokes memories of the various financial fiascos in the communications industry during the Enron Era.1 While current news seems focused on his remarkable physical condition achieved during his nearly four years in prison, there is also mention of Nacchio’s contention that the SEC’s case against him for securities fraud was motivated by his refusal to grant NSA access to Qwest phone records following the events of 9-11. The exposure of Prism, the NSA’s gigantic communications surveillance program, through revelations by defector Edward Snowden, has re-opened comment on why the SEC went after Nacchio in the first place. Nacchio was charged and convicted of insider trading following disclosure of some $52 million of sales of Qwest stock whose market value suddenly plunged after his sales. His defense at the time was that the government came after him when he refused NSA’s request for phone records.  Continue reading

The 5 year ordeal of the XL Pipeline

Five year anniversaries can be joyful or sad. It all depends upon what one is celebrating. Undoubtedly, “extreme greens” must be dancing as five years have gone by due to their efforts to prevent the creation of the XL pipeline extension. A sober consideration of this dubious achievement reflects well on the Administration’s effort to reward environmental lawyers for their resolute pursuit and personal economic benefit of ‘keeping the world cleaner.” The facts don’t support such a claim, but if you have already made up your mind on what the true goal of the effort might be, ‘don’t confuse the issue with the facts.”
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Slow and Slower: Summers Withdraws

Summers Withdraws as Potential Fed Chairman: “politics” triumphs again

The forced withdrawal of Larry Summers from the short list to succeed outgoing Chairman Bernanke clouds the policy future. It also gives encouragement to the market that whoever is chosen to lead the current cat-herding cavil at the FED will not be able to abruptly turn off the spigot of current monetary ease. Markets that worry about the present but strongly discount the future should be calmed because a continuing rise in the interest rate on 10 year bond has seemingly been moved to the back burner. Continue reading