Stop the rate increases

In this op-ed submission, I argue that a cessation of growth in the broad money supply, achieved by a reduction in QE combined with a reduction in deficit spending, is adequate in and of itself to bring in

Beware QT

Investors groping for a bottom to the current bear market in stocks are searching in all the wrong places.  Some are obsessing over the Federal Reserve's overnight rate policy.  Some are perusing company results.  Some are worrying over a potential recession.  Still others are watching technical indicators to signal a washout bottom.  But these are not the best tree

Letter to the Editor: The Chip Shortage - An Existential Risk to America

In "The Semiconductor Shortage (WSJ 3/13/21)," your editorial staff understates the problem of the American semiconductor supply chain.  Aside from the Intel microprocessor, which has fallen a generation or more behind Taiwan-sourced AMD, not a single logic chip is made in America any more.  They are designed here but manufactured at TSMC in Taiwan.  This is an exi

T+2 settlement is not a good deal for investors

Executive Summary:   T+2 settlement days serves short sellers well by providing shares for them to borrow, and it serves brokers well by encouraging clients to open margin accounts that enable brokers to lend shares earning high double-digit annual rates of return, but T+2 is not a good deal for consumers, whose shares end up working against them because of a flagrant conflict of inte

MMT:  A Dangerous Theory Indeed

 Responding to an article in the April 1, 2019 edition of the WSJ entitled:  "Theory Behind Democratic Proposals Gets a Public Face"

Time for the Fed to Pause

There are more reasons for the Fed to abide by Neel Kashkari’s advice than he articulates in “Pause Interest-Rate Hikes to Help the Labor Force Grow (October 26, 2018).”  

EBITDA is not foolish

It is unwise for Jason Zweig to disparage additions and subtractions to EDITDA by describing them as "The Fanciful Alphabet Soup Companies Use to Fool You (WSJ, June 2, 2018)"."  GAAP accounting is encountering serious deficiencies in its ability to differentiate repeatable costs from investments in the future which should be capitalized, i.e., charged to the balance sheet n

Returning to the "Old Normal" 

In "Can America Grow Again?" (WSJ May 30, 2018), the four contributors to the debate missed perhaps the most important contributor to the decline in US GDP growth after the Great Recession:  The risk-free interest rate dropped to zero and stayed there for nine years.  Because M3 is $20 trillion, risk-free interest rates of 5% on deposits, checking accounts, and money-market

A Buying Opportunity in the Stock Market

Being an investor requires not just predicting outcomes of future events but also, far more often, predicting when the market will price in events that over time do not occur.  Last week was a classic example.  The market was buffeted by the rise of four major risks to the market, none of which however are likely to occur.  If these risks subside, discounts for them will disappea

The cause of the loan-growth rut

2017 is the worst year for business-loan growth since 2010, according to "Loan Growth is in a Rut” (WSJ, 11/27/17).  2017 also happens to be when the Fed rate hikes started taking hold.  Why would Fed rate hikes reduce loan issuance? 

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