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2012/09/19: Quick Post: US solutions after election? NOT Likely!!

September 19, 2012 Leave a comment

 © 2012 ROHR International, Inc. All International rights reserved.

Very Quick Post indeed after the notice of our Summary Perspective being available earlier today. Yet, it seemed important to share our perspective on some US political matters that impact the potential Fiscal Cliff. Substantially that is the degree to which there is much talk of, Nothing will happen until after the election.”

As we have noted previous, that carries with it the implication (or at least encourages people to draw the inference) that somehow after the election the highly partisan US Congress and Executive branch will find a way to heal their differences, and it will all be put in order. That’s quite a hostage to fortune.

And especially so in the context of one aspect that highlights the warped US political zeitgeist. The Financial Times was kind enough to publish my opinion on that today in the Letters section…

 

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2012/09/19: Quick Post: Weekly Perspective now available… Critical Horizon Thursday AGAIN!!

September 19, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

Very short and sweet today, because a good deal of the perspective is still the same as our assessment in last Thursday’s post Fed Head Extends Anti-Dread Meds. QE3 may be quite a tonic for assets, but whether it encourages any real improvement in the US and global economy is another matter altogether.

Mr. Bernanke seems to have taken the bait from Senator Schumer that he needs to “get to work.” And along with his natural instincts (and possibly a bit of self-serving additional prominence for the Fed), he seems to have caved-in mightily to the sense that the Fed ‘do something’… whether or not it actually accomplishes anything in the real economy.

In fact, there was already an article on the front page of Monday’s Financial Times articulating the degree to which the backlog in mortgage processing by banks may mean there will not be any benefit to prospective home purchasers. And along with that there are not likely to be enough mortgage-backed securities (MBS) created to satisfy the QE3 buying program if it lasts for any length of time. And it is already creating market distortions.

That is also very consistent with the observation by Newedge Senior Director Larry McDonald, “There’s a new hedge fund… and it’s the Fed.” For quite a bit more on that and McDonald’s views on Spain and the dysfunction in the mortgage securitization market, and much else…

 

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